Investing when you do not think you are rich

I don’t think anyone really thinks they are rich, well, maybe Elon Musk and Bill Gates, but the rest of us feel pretty much like we fall somewhere in the middle. Not poor, but not rich either. You are just working hard to provide for you and your family and trying to enjoy your life the best you can. But, if you think you have to strive and wait for the right amount of money before you begin investing, you don’t have to. It is a complete myth that you need a lot of money before you begin investing in stocks and Exchange Traded Funds (ETFs). Keeping this mindset might be why so many of you are not investing. However, you will never get rich by keeping money in a bank account. The Bible reminds us of what it means to be a good steward in the parable of the three servants in Matthew 25:14-29.

parable of the three servants (New Living Translation)

14 “Again, the Kingdom of Heaven can be illustrated by the story of a man going on a long trip. He called together his servants and entrusted his money to them while he was gone. 15 He gave five bags of silver to one, two bags of silver to another, and one bag of silver to the last—dividing it in proportion to their abilities. He then left on his trip.

16 “The servant who received the five bags of silver began to invest the money and earned five more. 17 The servant with two bags of silver also went to work and earned two more. 18 But the servant who received the one bag of silver dug a hole in the ground and hid the master’s money.

19 “After a long time their master returned from his trip and called them to give an account of how they had used his money. 20 The servant to whom he had entrusted the five bags of silver came forward with five more and said, ‘Master, you gave me five bags of silver to invest, and I have earned five more.’

21 “The master was full of praise. ‘Well done, my good and faithful servant. You have been faithful in handling this small amount, so now I will give you many more responsibilities. Let’s celebrate together!’

22 “The servant who had received the two bags of silver came forward and said, ‘Master, you gave me two bags of silver to invest, and I have earned two more.’

23 “The master said, ‘Well done, my good and faithful servant. You have been faithful in handling this small amount, so now I will give you many more responsibilities. Let’s celebrate together!’

24 “Then the servant with the one bag of silver came and said, ‘Master, I knew you were a harsh man, harvesting crops you didn’t plant and gathering crops you didn’t cultivate. 25 I was afraid I would lose your money, so I hid it in the earth. Look, here is your money back.’

26 “But the master replied, ‘You wicked and lazy servant! If you knew I harvested crops I didn’t plant and gathered crops I didn’t cultivate, 27 why didn’t you deposit my money in the bank? At least I could have gotten some interest on it.’

28 “Then he ordered, ‘Take the money from this servant, and give it to the one with the ten bags of silver. 29 To those who use well what they are given, even more will be given, and they will have an abundance. But from those who do nothing, even what little they have will be taken away.

This parable reminds us to be good stewards of what we have been given and not just to  store it under a mattress or put it in a bank account that is not gaining much for you. In order to build wealth, you need to invest your money. It’s okay to start small and invest more as you have more money available. The servant in the parable that was given the least amount of money was the one who was more fearful of losing it, but that servant didn’t use what he had been given to grow his wealth. How can you start investing now? The best thing you can do is to just begin. Start creating healthy habits now, the sooner you start, the better. Even if you begin with $30 per month (that’s only $1 per day) to put into a Roth IRA–having this money automatically withdrawn is an easy way to continually build wealth. You can adjust this amount over time as your financial situation changes. Go to www.fidelity.com or another custodian and open up an investment account today!

steps to invest your money now:

1. Use employer match in 401(k)
2. Make contributions in 401(k) all Roth if available
3. Open a Roth IRA(if you can contribute based on income level)
4. Take advantage of an HSA, if your health insurance plan allows
5. Let compound interest work its magic

There comes a point in your journey to wealth in which it becomes advantageous to hire a professional to manage your investments. We generally find that we add the most value working with families who have accumulated at least $250,000 in investable assets.  Check out our recent blog titled, “Does having a financial advisor add value?”