Fidelity Life Direct Debit: Fill & Download for Free

Here is what I do, fine tuned over many years:* Direct debit from Checking Account on payday twice a month. Monies invested in equity index fund. Increase amount anytime received a pay raise. When times are doom & gloom, keep investing. When times are optimistic like now, keep investing. This is my #1 lesson.* If in the USA, max out on 401(k) to at least earn company matching. Never turn down free money. I started at age 30, and glad I started young.* No-surprise Budgeting Big Expenses: Sum up big annual expenses such as property taxes, car and house insurance, life insurance. Take sum, divide by number of pay periods, and deposit that amount in a Vanguard or Fidelity money market fund every pay period. When a big budgeted expense comes due, withdraw monies from Money Market.* Car Payments. When car is paid off, deposit same amount each month in a Money Market. Helps save up for the next car purchase. In recent years, we hold on to our cars 8–10 years, maintain them well, and replace with used cars 1–2 years old.While not possible when we were young, we eventually were able to live on one salary and saved the second salary. Not possible for everyone.

Do you want to be rich when you're older? Have you ever considered investing in the stock market?Lads, this post is all about investing. Not the most interesting topic, but one that everyone should know at least a little about. It is a bit of a long read so here’s a summary:If you want to be wealthy when you are older, buying and holding shares over the long term is the easiest and most reliable way to do it. To ensure you maximise your wealth you should start investing as soon as possible: making money through stocks is not about timing the market, it’s about time IN the market.Why you should invest in stocks ?Investing is one of the only ways to make money other than working for it. Through purchasing and holding shares you become a part owner in that business. To reward you for your trust, this business will likely pay you a dividend each year. Through reinvesting these dividends you can easily compound your wealth. In short, the longer you have your money earning interest on itself the richer you will be at the end, which is why the younger you start, the better. Furthermore, Investing in stocks also protects you from inflation, which is the biggest threat to wealth.But why invest in the stock market?As everyone in this group is young, we all have time before we need access to savings, therefore we should all be looking at long-term investments. While volatile in the short term, the stock market has been the greatest long-term wealth creation tool in existence. Over the last 30 years, an Australian Index fund has had an average annual return of 10.8%. This has not been linear growth however as some of those years showed negative returns. But Hypothetically, if you had put $10,000 in 1970 into an Australian index fund, then today it would be worth over $805,000 today. On top of that each year you would also be receiving a dividend of $35,605 every year. Reinvesting dividends is crucial to compound interest and in combination with capital gains (stock price increase) is the driving force behind the stock markets outperformance of other investments.If you have no specific idea of what you would like to invest in then starting off with investing in an index fund is where most experts recommend. These funds passively track the value of a market. For example, the ASX 500 is an index fund comprised of the 500 largest Australian companies. Index funds are one of the greatest investments at our age for 3 reasons:1. They automatically act as a broadly diversified investment as they have exposure to a variety of businesses and industries. This means that if the oil stocks are having a bad year, you can still potentially rely on companies like Woolworths and Telstra to mitigate this loss.2. They have very low management fees as they are passively managed. This then gives them a distinct advantage over mutual funds. In fact, the high fees of mutual funds means that almost all of them underperform the market in the long term. Research shows that over a 5 year period only 10% of Australian fund managers beat the market. Furthermore, a study by Vanguard found that over a 20 year period (ending 2013) mutual funds underperformed the market by an average of 0.86% every year.3. Index funds also have a much better chance of beating an investor who invests in individual shares. Research shows that an average US investor who focuses solely on individual shares has had an average annual return of only 3.8% over a period in which a basic index fund had returned an annual average of 11.1%.Simply put: index investing is smart investing.Don't believe me? let's use an example:Let’s say that hypothetically, you were to invest $5,000 into an index fund today and set up a direct debit for $50 a month. And let’s say you didn’t touch it until you retired in 50 years. If we assume a return rate of 10% what do think it would be worth when it comes time to cash in? … All told, you would have invested only $30,000, however, this investment would have compounded to be worth in excess of $1,300,000 (Refer to attached picture). That is the power of the stock market. With nothing but dedication and time, anyone can become wealthy.Now here's the catch:One significant aspect of investing that must be discussed, which will ultimately determine how much money you will make, is your behaviour towards market fluctuations: specifically your risk tolerance. When investing you must be prepared to take losses and must maintain a firm resolve to not sell out when you see red. The only way that compounding successfully works is through the long term. Selling out when your shares take a loss halts this process. Not only does it deny you the opportunity to see any short-term gains but it also subjects you to capital gains tax.The other picture that I have attached is one which represents investor mentality during market fluctuations. If you bring emotion into how you invest you will never achieve your financial goals. This doubly important for teenagers, as research by the Australian Securities Exchange (ASX), shows that most young people are more risk averse than they ought to be, therefore they are more likely to panic when they see a sharp decline in their earnings. If, however, you shut down your fear of losing money in the short term and acknowledge that you will be able to ride out these temporary declines, research shows that periods following crashes have significant growth potential (due to many stocks being undervalued). In fact, the greatest gains in markets have been in years following massive global crashes (see attached pictures).A few facts about investing:Almost all millionaires are long-term investors and 95% of them are invested in the stock market.Millionaires are also extremely diligent investors. On average they invest 15 - 20% of their household income in shares each year regardless of how the market is performing. They are also passive investors meaning that they do not actively try to trade their stocks, even during market downturns.More young people are investing; Over the last 5 years, the number of 18-24-year-olds who hold some form of investment has doubled from 10% to 20%.About one in every 4 years, the share market will have a negative return.FAQ:So how do I buy stocks?You can buy individual stocks with an online broker like Comsec. Alternatively, if you want to buy an index fund, look into Vanguard: they have a variety of index funds and relatively low fees. Link:Investment ProductsNOTE: If you are under 18 then to buy shares you will have to do it with your parents as legally kids can’t own shares. Your parents will have to purchase the shares in their name but can specify that you will be the legal owner once you turn 18.How much should I initially invest?$2000 is recommended. This is because trading fees cut into a portion of any profits you might make. For example, a trading fee of $20 (average cost) on a $2000 buy would mean the stock value needs to increase more than 1% to make you money. However, if you invest only $200, then the stock will have to make over 10% before you see any real profit.Isn't the stock market super risky? what if it crashes?The high returns of the stock market can be achieved only through the higher risk of investing. All share markets must eventually have a crash, and since we haven’t had one in a decade there is the possibility that one will occur in the near future. If you would prefer to not risk a big loss within your first few years of investing that is understandable. However, as everyone should be looking at a long-term investment timeframe a short-term crash could be considered inconsequential as a reason to avoid the greatest wealth creation machine in the world.If it’s this easy to become rich why doesn’t everybody do it?Its usually because it’s the most boring way to become wealthy. This is because it involves little direct participation and a very long time frame. Most people look at their portfolio after a few years and decide they would be better off spending the money on tangible goods such as a new car. They very rarely stay invested until the seventh year which is when compound interest starts to snowball.Why don’t I just sell when I see my shares are decreasing and buy when they are on the rise?If you do this it is most likely that you will sell low and buy high, which is exactly the opposite of what you want to be doing. Warren Buffet - the greatest investor of all time and one of the richest men in the world - has a simple and effective way of viewing the stock market. He says that you should treat it like it’s a supermarket: when you see an item on sale you should stock up on more. Basically, just invest when everyone else is panicking. Everything is cheap and you can rake in the bargains.So should I invest now or wait for a market crash?This is a choice that only you can make as everyone has different financial circumstances and risk tolerance. However, you may like to look into dollar cost averaging as a compromise.IMPORTANT NOTE:Shares and index funds are not the only investment vehicles that you should consider. You may also like to look at mutual funds, bonds, term deposits etc. Each investment vehicle has its own pros and cons and should be considered based on individual circumstances.If any of boys would like to know more about investing or setting yourself up for life, which, if you have made this far: you probably are. Then I highly recommend reading the barefoot investor (link below). I've also got a spare copy if anyone wants to borrow. Thanks for your time lads ✌️ hope you're enjoying the holidays.Few helpful links:The Barefoot Investor: (a lot of this post was inspired by this book).The Barefoot InvestorLearn more about investing and finance online for free:Investopedia - Sharper Insight. Smarter Investing.http://www.asx.com.au/education/shares-course.htmFinance and capital marketsSome other good websites to convince you to invest in stocks:Reasons to invest in stocks - Fidelityhttps://advisor.mp.morningstar.com/resourceDownload?type=publicForms&id=3f9dff3c-f085-47a1-98ba-0bc008df9f25How Would Historical Stock Market Returns Have Impacted You?AMP Capital Resource & Education : 6 reasons to consider investing in sharesAnother really good book that is a great overview of the stock market. Also goes a bit more in-depth on why index investing produces superior returns.Burton G. Malkiel : 9780393352245That's all for now lads.

Two pronged attack.First, lower your “liabilities” eg trade down to a 10-year-old car and rent. Use the Walmart App & Map to go right to your precalculated items. No Amazon. Cut up your credit cards for a Fidelity debit card. Download the “Nerdwallet” app.Next, raise your “assets” by picking up skills eg cheap but good online degree eg CFA or follow an RV repair guy around a few years. You'd be on your own making $150/hr with no debt.Once in the black “direct deposit” to your Fidelity Roth IRA in FZROX at $10 a share. Use their checking to pull your bills “just in time” keeping your “float” making the market rate your whole life. Easily over a million and you didn't save anything. You can pull your Roth till 4/15 the following year. Or keep it in if anything left over.Course once you're making $150/hr you form an LLC ($200) and open a 401 solo and stack it away (up to 56k a year) in your FZROX and immediately roll to your Roth and retire in 25 years with ZERO fees and tax-free money.