Money Management

Even if you need to start small, don’t wait around to start investing. 

One of the most popular pieces of investing advice is to do it right away. Even if you’re in the early stages of your career and not making much money yet, set aside at least a portion of your income to invest.

Unfortunately, many people don’t heed that advice. About 150 million Americans own stock, which sounds like a lot. But it’s fewer than 60% of American adults, so there’s still a sizable portion who don’t invest in the stock market.

It’s normal to think that you’ll have plenty of time to invest later, especially if you’re in your 20s or 30s. While many young adults feel this way, it’s a huge mistake, because you’re sacrificing your most valuable asset as an investor — time. Financial influencer Graham Stephan recently provided a simple example of why time matters so much for investors.

How time affects your investment returns

Stephan shared a comparison of how much money you’d have at retirement (age 65) if you invested $100 per month and earned 8% per year. Here’s the difference between how much you’d have depending on when you started:

If you start at 20, you’ll have $502,111.If you start at 25, you’ll have $336,937.

You’re only investing for five more years and contributing another $6,000 of your own money. Regardless, you end up with over $165,000 more.

Why do those last few years make such a big difference? This is normal with investing, and it’s all because of compound interest. Compound interest is a term for earning interest on top of interest.

Let’s say you invest $1,000 and earn 8% per year. After the first year, you earn $80, growing your portfolio to $1,080. In year two, you earn $86.40, for a new total of $1,166.40. That’s $6.40 of compound interest.

Now, an extra $6.40 isn’t much. In the early stages of investing, returns are usually solid, but unspectacular. But the longer you invest, the more compound interest you accumulate. That’s why your portfolio can eventually grow by $30,000 per year or more, even if you’re only putting in $100 per month. You’re earning your 8% yearly return on a much larger amount of money than you had in the beginning.

Where should you invest your money?

There was a frequent question people had for Stephan after he shared that comparison of investing returns. Where can you get 8% per year on your money?

One of the best ways to possibly get that kind of return is by investing in stocks. If you do that, 8% per year is definitely doable. In fact, over the last 50 years, the average stock market return is about 10% per year.

To be clear, this doesn’t mean you’ll get 8% on the dot per year, or that you’re guaranteed that amount. The stock market goes through plenty of ups and downs. But if you stick to long-term investing where you buy and hold for five years or more, the ups and downs should average out to a strong yearly return.

There are many ways you can invest in the stock market. One option is to open a brokerage account and pick a few dozen companies to invest in. However, this can be time consuming. A simpler approach is to choose investment funds, which invest your money into a basket of stocks for you. Most online stock brokers have plenty of these available. Options include:

Index funds: These track a market index, such as the S&P 500, and keep fees to a minimum.Mutual funds: These are professionally managed investment funds. They tend to have higher fees than index funds, but there are low-cost mutual funds, too.Target-date funds: These funds are set up with a specific retirement year in mind. Portfolios are rebalanced as they get closer to the desired retirement date.

For example, you could pick an S&P 500 fund. That index tracks 500 large stocks traded on the U.S. market. Or, you could put your money in a total stock market fund. Either of these options would get you a diversified portfolio that largely follows the performance of the market.

Time is one of the key factors in how much you earn through investing. Many investors wish they had started when they were younger, and while there’s no way to go back in time, the next best option is to start immediately. If you invest regularly, your portfolio will grow more and more as the years go on.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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It’s possible to see an incredible Broadway performance without draining your bank account. 

Whether you live in the Big Apple or are planning a visit from out of town, seeing a Broadway show is a must. With today’s high prices, many families may struggle to afford entertainment. Luckily, Kids’ Night on Broadway is happening in March, and kids and teens can attend a Broadway show for free when they accompany an adult paying full price for a ticket. Find out more about this exciting deal so you can stick to your budget as you plan your next family outing.

Introducing Kids’ Night on Broadway

Kids’ Night on Broadway, a program by The Broadway League, is the perfect way for families to save on entertainment costs. Kids and teens aged 18 and under can attend a participating Broadway show for free when accompanied by a full-paying adult.

This year’s New York City event will take place on Tuesday, March 21, 2023 — and tickets are on sale now. The offer is applied as 50% off each ticket. You can get a discount by using the promo code KBWAY23.

The following Broadway shows are eligible for this deal:

& JulietA Beautiful Noise, The Neil Diamond MusicalAladdinBad CinderellaBob Fosse’s Dancin’CamelotChicagoHadestownHamiltonHarry Potter and the Cursed ChildKimberly AkimboLeopoldstadtLife of PiThe Lion KingMJ The MusicalMoulin Rouge! The MusicalPeter Pan Goes WrongShuckedSixSome Like It HotWicked

Parents can review details on the Kids’ Night on Broadway website and learn more about the recommended viewing age for eligible performances. Those with event tickets can also take advantage of parking and restaurant discounts, making the evening more affordable.

While the March 21, 2023 event applies to New York City Broadway shows, additional Kids’ Night on Broadway events will be held in other cities around the United States later this year. If you live in another part of the country, check to see when your local event is happening.

Four other ways to score Broadway ticket discounts

Unable to attend this event? You’re still in luck. Here are a few ways to get a deal on tickets, so you don’t have to skip a must-see performance:

Buy discounted tickets from a TKTS booth: If you’re in New York City and want to score cheap same-day tickets, head to a TKTS booth. You can find them in Times Square and Lincoln Center. You can save up to 50% on the cost of admission with last-minute ticket deals offered.Try your luck in a ticket lottery: Some Broadway performances run ticket lotteries, and you can get a big ticket discount if you’re chosen. For example, The Lion King is currently running a ticket lottery with tickets available for $35 per person.Become a TDF member: By joining the Theatre Development Fund (TDF) and paying $40 per year, you can access deeply discounted Broadway performance tickets. Membership is available to select groups, including artists, teachers, clergy members, union members, students, individuals 30 and under, retirees, U.S. military members, and freelancers.Purchase tickets through TodayTix: The TodayTix mobile app and website helps consumers find the best prices on Broadway tickets. You could save a significant amount of money this way.

Don’t miss out on the chance to support the arts with discounted ticket opportunities like the ones mentioned above. A fun evening out doesn’t have to drain your checking account balance. For more money-saving tips, check out our personal finance resources.

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If that’s something you’ve done, it may be time to try to boost your income. 

Inflation has been battering consumers for well over a year now. And unfortunately, the problem seems far from over.

January’s Consumer Price Index report was recently published, and it showed a 0.5% increase in inflation from December. That’s a pretty big month-to-month jump — and a sign that inflation is not about to slow down.

It’s not surprising, then, to learn that many Americans have been raiding their savings accounts to cope with inflation. According to the most recent Country Financial Security Index Report, 27% have taken a withdrawal to account for higher living costs.

On the one hand, the fact that consumers have savings to fall back on is a good thing. Without savings, those same people would potentially be sitting on piles of credit card debt.

On the other hand, it’s generally not a good thing to be continuously dipping into savings to cover monthly bills. That money should really be reserved for emergencies or big goals. And chances are, you don’t want to completely whittle your savings down in the course of covering your cable bill or paying for groceries.

If you’ve been consistently raiding your savings as inflation surges, it may be time to pick up a second job. That income boost could be your ticket to not only managing your bills, but replenishing the recent withdrawals you’ve taken.

It pays to give your income a boost

While rampant inflation is not a good thing for many consumers, one positive thing about today’s economy is that the labor market is quite solid. And that extends to the gig economy. So if you’ve been struggling to pay your bills on your regular paycheck alone, now’s a pretty good time to pick up a side hustle, whether it’s working evening shifts at a nearby restaurant or driving for a ride-hailing service on weekends.

Carving out time for a side hustle may be an adjustment. But on the flipside, it might alleviate a world of financial stress and help you preserve your savings.

Let’s say you’ve been taking $250 monthly withdrawals from savings for the past six months to cope with inflation. That would mean you’re down a whopping $1,500 in total.

That’s a pattern you probably want to break. And since it could be a while until inflation cools off, boosting your income might be your next best bet.

If you can manage to earn $250 a month from a side gig, you’ll be able to leave your savings alone for a while. And if you earn more than that, you can start to put back some of the money you’ve recently taken out.

Take a close look at your spending, too

A second job could be your ticket to managing your bills while living costs are higher for everyone. But it might also help to examine your spending and figure out if there are bills you can cancel or trim.

You might enjoy having access to cable. But if you’re dipping into your savings every month to the tune of $250 and you’re currently spending $100 a month on cable, that’s an expense that may be worth cutting — especially if you can replace it with a $20 streaming service instead.

Unfortunately, rampant inflation could end up being with us for most, or all, of 2023. So it’s best to do what you can to minimize the financial blow it deals you.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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It’s not just about the convenience factor. 

We live in a world that’s growing increasingly digital. These days, a lot of people do their work online, hold meetings online, and do the bulk of their shopping online. And a lot of people have shifted from physical banks to keeping their money in an online bank.

Banking online can be a huge time-saver. Think about it — instead of having to get in your car and drive over to a bank, you can simply point and click your way through a given task. Plus, online banking can be super convenient. Out of stamps? You can pay your bills electronically online rather than having to mail a check.

But while banking online can be ultra convenient, that’s not even the main reason to consider a switch to an online bank. Rather, the main reason has to do with earning interest — more of it.

Don’t sell yourself short

The money you have in your savings account may not grow at the same pace as the money you have in your brokerage account. But it still pays to score as high an interest rate as possible on that cash. And chances are, moving over to an online bank will be your ticket to doing just that.

Online banks don’t tend to have the same operating expenses as physical banks. After all, they don’t have to pay for rent and other overhead that comes with maintaining a physical branch. Because of this, you’ll commonly be able to snag a higher interest rate on your money with an online bank, whether you have your cash in a savings account or a certificate of deposit.

If you’re wondering how much of a difference moving over to an online bank will make, consider this. Many online banks today offer an annual interest rate of 4% or more for savings accounts. Let’s say you have $10,000 in your savings, and you’re currently earning 3% interest. That means you’re earning $300 a year. But with a 4% interest rate, you’re looking at $400 a year. That’s a pretty notable difference.

It may be time to make a switch

If you’ve been using the same bank for many years, then moving over to an online bank may be an adjustment. But if that adjustment makes you richer by allowing you to earn more interest on your money, then it’s worth going through the motions.

A 2022 survey by Forbes Advisor found that 78% of Americans prefer to do their banking online than in person. Now, it’s possible to keep your money at a physical bank and still conduct transactions online. But if you’re going to be banking digitally anyway, then you might as well snag a higher interest rate on your money in the process.

Moving to an online bank could put extra money in your pocket at a time when living costs are stubbornly high. And if you really want to score the best interest rate on your savings, shop around with different online banks and see what sort of return on your money they’re offering.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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