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The amount of financial terminology is enough to send anyone into a panic when you enter the world of investing. So today, we will cover Dollar-Cost Averaging.

Long-term investors often use the term, especially when the markets begin to pull back or fall entirely on its face.

Readers keep asking about it, and the question often goes something like this:

“Dear Joey,

I keep hearing about dollar-cost averaging on my investments, but I’m new to investing and don’t understand it. So how does it help me in the long run?”

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What Is Dollar-Cost Averaging?

Simply put, it means that you set an amount of your paycheck to invest itself automatically, or you can do it manually as well. In addition, the strategy takes advantage of the stock market fluctuations. Every time you buy shares, the overall cost will average out between all your shares while the price goes up and down.

Let’s analyze the picture below:

This person set a monthly amount of $100 (Set amount column) to invest at the beginning of every month (Date column). The stock they invested in fluctuated between $20 and $25 during the year (Stock price column). And the last column shows how many shares this person was able to buy each month.

At the end of the year, the person bought a total of 54.41 shares (Total column) while investing $1,200. When you have the two numbers, you can divide the total amount ($1,200) by the total amount of shares (54.41), and you get the number $22.06.

That means that the average cost of all your shares is $22.06. So you effectively average up and down throughout the year to not buy at the top or the bottom.

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Advantages of Dollar-Cost Averaging

When you buy with a set amount throughout the year, you ensure to not overpay for your shares. The market mainly moves upward, but it also has down moves. Therefore, they provide excellent opportunities for you to buy more shares at lower prices. In contrast, you buy fewer shares when the prices are high.

Things to Consider

Dollar-Cost Averaging is an excellent strategy if you are a long-term investor. You are not trying to time the market. Instead, you want to have time in the market while accumulating shares and taking advantage of the famous “the average return over the last 100 years is 10%”.

That doesn’t mean that the market goes straight up each month to end at 10%. Instead, the market fluctuates up and down but, in the end, finishes on average with a 10% increase.

Overall, it is a powerful strategy when you don’t want your money to sit on a bank account with a bit of interest of less than 1%. Instead, you will grow your account and net worth slowly but surely. If you are new to investing or don’t have much time to analyze the markets, consider this a great strategy.

Now, begin your Road to Wealth!

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The New Year is fast approaching. It will be here in less than 48 hours, and it’s that time of the year where everyone starts thinking about New Year’s resolutions. Are you there yet?

At the end of the article, go ahead and tell me in the comments below what you plan on improving in the new year. Are you looking forward to a better you in 2022? I am and will be sharing some of my resolutions with you all.

The most common goals are working out more and eating healthier. A percentage of you are also looking to start investing. Improving your finances is an excellent goal for a new and improved you in 2022.

Are you looking forward to focusing on your investing goals and improving your life and your family’s life? It’s possible, and you know it. And you see, many other average people do it all the time.

So, I ask you again, are you prepared to do the work to BECOME an investor? You know it doesn’t happen by itself.

Pepsico (PEP) moving up and steady in 2021.

I have mentioned this before, but as a reminder, all investors begin precisely at the same place, with no knowledge and no experience. Some are lucky to be born in a family with financial expertise, which is passed down at an early age. However, that doesn’t change that they still have to learn and put skin in the game to gain that experience. Others, like us, have to grind out that knowledge. As a result, we sacrifice countless hours, family time, fun times, and many other things. However, once we find our new knowledge, the most important thing is there is nothing to worry about once you teach family and friends what to do and when to do it. There is a strategy to the madness.

Some years become a dividing line in our lives—the life before and after a specific event. You often hear the negative, but there are positive events and years. You can make 2022 your year!

For me, Covid in 2020 was that year. What!? Joey, covid is still messing with all of my plans, and it’s 2021. Sure, mine too. But it was during that lockdown in 2020, I was able to analyze all of my trading systems and figure out which ones worked and the ones that didn’t. With a few tweaks, I headed to 2021 with full force. I have to say; it has been the best and most profitable year for me, my family, and friends have ever had. Yes, they copy my trades at their own risk, and you will be able to soon enough. Keep reading; you will understand.

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I want to share a few important things I learned in conjunction with my resolutions for 2022.

1. Patience – as the world goes through rough patches and keeps constantly changing, we need more patience than we have ever needed before. Things will never be the same, and we have to adapt and improve ourselves. That will also take patience; we won’t adapt and change in the blink of an eye.

2. Just shut off – as the world was shutting down, I took that time away from everyone and read books, analyzed my strategies, and most importantly, got closer with my family. It doesn’t matter what your job is and how important you think you are; once you are gone, they will replace you. You are an asset to them, but they can find another asset. Your family won’t. They can’t; there is only one of you. So be present and pay attention to what is important. Learn to shut off for them.

3. Life, Investing and Luck – you can put in the work, reading, studying, training, working, preparing in general. However, a positive outcome is not guaranteed. Ever! You will win some, and you will lose some. Understand that, and your life will be less stressful.

4. Be a Crane – no one can be a champion unless they play a one-person sport like golf, boxing, or tennis. And they still have coaches and a team behind them. You don’t have to do it by yourself in life and investing, but improving yourself is only 50% of the process. Once you are where you want to be, or at least close to it, ensure to be a Crane and lift others. You can’t scan the whole market by yourself or cover all the strategies, but you can have a team that works together. It doesn’t matter if they are family, friends, or people you meet on the internet. If we all row in the same direction, we will get where we want to be. That’s a Champion mentality.

5. Quality time – although it goes in hand with point 2 to shut off, just because you shut off doesn’t mean you are creating or having quality time with your loved ones. Sitting there staring at them with a pale face doesn’t count as quality time. Instead, have “dates” with your kids and spouse. Take days to go to their favorite places, as well as take days to go to yours. Remember to have a balance. That way, everyone is happy while you create life memories; together.

Facebook (FB), newly known as Meta has seen gains of nearly 200% in the last 5 years.

My new year’s resolutions are:

– I’m going to get back in great physical shape. Yes, I know! One of the most common ones, but I have neglected myself a little bit for far too long. I don’t do diets, strictly exercise. I may do some social media appearances. No promises, though.

– I will be a Crane and lift others. I plan on doing that by starting a YouTube channel. As a matter of fact, two channels. English and Spanish-speaking individuals are all invited. It has been brought up to me a million times before that most of my readers prefer short videos rather than reading articles. Well, your wish is my command. The new year will serve you well, and I’m working on the ins and outs of it. I will write about it once the channel is up and running.

– I will add 3 passive income sources. Also, encourage you to do the same. It could be with dividends, affiliate marketing, e-commerce, or any other way you prefer. It doesn’t matter. You choose what you are interested in doing because remember that it will take time and work initially, and you need to stick through thick and thin.

– I will make my life more fun by traveling more, creating new things that I never saw myself doing, helping others, and paying it forward.

I want you to be dreaming BIG, just like I’m doing right now. Twelve months seems like such a long time and no time at all. Either way, 2022 will come and go. So make this your year and take ACTION!

From my family to yours, Happy New Year!

Now, begin your Road to Wealth!

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