The stock market drops EVERY year, so expect it as a part of investing. The average stock market drop per year since 1980 is 12%! But even though this can expected, each drop can feel pretty scary.
Despite all of this, consistently investing your money in the stock market will make you very rich. In this example, we’re using the returns of the S&P 500, including dividends, since 1980. Only about $260,000 of the $3.4 million is from your contributions, meaning your money grew by 13X! That is compounding working its magic!
Is the S&P 500’s 5% drop from its recent high at the end of July the start of something worse?? We have no clue. And anyone who pretends to know the answer to that is full of it.
But here’s what we do know. Buying and holding index funds guarantees you your fair share of all market growth. Buying assets that provide dividends and go up in value results in wealth building. So, stay the course and keep buying no matter what the market is doing. That is what will buy your financial independence!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Vivi & Shane
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