Dollar Cost Averaging

I cannot tell you how to get rich quick. I can tell you how to become wealthy over time. The first is to get out of debt, which means reducing your liabilities not increasing them after you have purchased a home. The second is dollar cost averaging.

Dollar cost averaging is investing consistently over a long period of time. Sounds easy, it really is due to today’s technology with apps like Acorns or Stash. Both apps allow for you to buy ETFs (Exchange Traded Funds) which will force your portfolio into diversification by an ETF’s nature. Then set it up to invest weekly if possible for as much or as little as you can.

When you participate in dollar cost averaging you actually benefit from when the market goes down because you get to buy in for a cheaper rate. By doing this weekly you are not exposed to the risk of a sudden market swing, but instead receive the average of your fund over time.

My 8 year old daughter receives a weekly allowance of $5 that goes into her ETF portfolio. She already has gains which I love to show her how her money is making money and she loves to see it too. It will be a nice nest egg when she graduates from college, but hopefully she won’t use it and instead will continue to invest into the portfolio and grow it even further.

In investing, time is the most valuable commodity so please take advantage. Time goes by fast and by using an weekly auto invest option you will benefit more and more as time goes on. Dollar Cost Averaging will greatly reduce your risk in the stock market and elevate your opportunity for positive gains.