Successful Investing

Saving is the Key to Successful Investing

Here is an example from my own recent personal budget. Last month, as I sat down to write a check for the cable bill, I stopped short. I hadn't watched cable TV in months, so how much did I really need it? I called my cable company and cancelled the service and then subscribed to netflix, the online movie rental service. Savings: $100 a month ($120 for cable minus 20 for netflix ). Month in and month out.

I'm sure you can find similar savings annuities in your life. I'm always looking at ways to save time( less bills, less filing and less check writing equals more time ) and cut some expenses, I am Changing my health insurance policy, and my brokerage services (where I've just consolidated and moved all my accounts to save monthly service fees and reduce all the incoming mail).

Of course, that $100 isn't saved yet. If it just gets commingled with the rest of the money in my checking account, I'm pretty sure I'll wind up spending it without even noticing it.

So, the next step is to make sure it goes automatically into an investment account. My company, has set up its payroll system for electronic direct deposit and I can allocate my paycheck among several accounts. To make sure the $100 really does get saved, I set up my electronic direct deposit to put the entire amount straight into an investing account. (If your employer doesn't offer you this alternative, you can set up an account with ShareBuilder.com that will take the money automatically out of your checking account each month.)

Putting that money into an investment account as quickly as possible is a key step. It's the start of the kind of positive feedback loop you need to build if you're to become a successful saver in a Spend! Spend! Spend! culture.

My method has a built-in positive re-enforcement mechanism: By setting up a dedicated investment vehicle, I can watch the savings increase every pay period. That activity, in turn, helps me feel that i will have a secure future and that puts a smile on my face.

I only invest in what I know and with the companies I do business with everyday. My current favorites are Ebay, IAC/InterActiveCorp, Yahoo, Google, Starbucks, Citibank, Coke, Microsoft, American Express.

Here are some useful links:

www.aaii.com/basics
www.sharebuilder.com
www.finance.yahoo.com
www.brownco3.com
www.morningstar.com