NerdWallet's Smart Money Podcast
How You Could Grow $26K to $44K in 7 Years: Smart Strategies to Try
Thu, 05 Dec 2024
Learn how to diversify investments, leverage tax-advantaged accounts, and set realistic goals for long-term financial growth. How can you diversify your investment portfolio and reduce risk? What are the best ways to save and grow $44,000 in seven years? Hosts Sean Pyles and Sara Rathner discuss investment strategies and realistic goal setting to help you make smarter financial decisions. They begin by sharing a discussion of tax-advantaged accounts featuring Investing Nerd Alana Benson, with tips and tricks on understanding Roth IRAs and 401(k)s, leveraging employer matching, and choosing the right accounts for your needs. Alana also discusses how you can diversify investments for stability, why index funds can reduce risk, and the importance of knowing your timeline for financial goals. Then, Sean and Sara are joined by their co-host Elizabeth Ayoola to answer a listener’s question about how they can grow their investment portfolio to save $44,000 in seven years. The hosts explore strategies for diversifying investments, managing risk, and setting realistic financial goals, providing actionable advice on using tools like index funds, robo-advisors, and high-yield savings accounts. They also discuss the risks of undiversified portfolios and how to align investments with specific timelines and goals. Use NerdWallet’s free investment calculator to estimate how much your investments or savings will compound over time, based on factors like how much you plan to save or invest, your initial deposit and your expected rate of return: https://www.nerdwallet.com/calculator/investment-calculator In their conversation, the Nerds discuss: how to diversify investments, investment risk management, Roth IRA vs traditional IRA, compound interest, index funds vs ETFs, tax-advantaged accounts, high-yield savings accounts, how to start investing, passive vs active investing, portfolio diversification, stock market basics, understanding 401(k) matching, investment calculators, robo-advisors, benefits of ETFs, how to manage investment risks, tax benefits of retirement accounts, how to set financial goals, saving for retirement tips, investment timeline strategies, benefits of index funds, investing in the S&P 500, how to balance risk in investments, savings account vs investment, building an emergency fund, how to invest with a 7-year timeline, tips for financial planning, saving vs investing, maximizing returns in a short timeframe, avoiding familiarity bias in investing, pros and cons of day trading, why passive investing works, realistic investment goals, investment options for beginners, risk of single-stock investments, and compound interest benefits for young investors. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend. Learn more about your ad choices. Visit megaphone.fm/adchoices
What are the basics of investing?
So I have actually not done that. I don't have experience in that. But one thing I will say is I invest mostly in index funds and ETFs.
And let's quickly just state what index funds and ETFs are for people who may not know.
They're essentially like a basket of stock, right? You get a little bit of this, a little bit of that. There are different kind of ETFs and index funds that you can get, but it exposes you to different industries, different type of companies, so that if one is underperforming, hopefully the other one is doing pretty well.
And they can mirror the performance of the market on the whole, depending on what type of index fund or ETF you're investing in.
Exactly. Did y'all know that Sean was studying for his CFP exam? See, the knowledge is poking through.
Just sprinkling it throughout the conversation.
This is how he reviews course material.
Truly it is. Yes. Anyway, go ahead, Elizabeth.
So I do have some stock, though, that I am hoarding. And to be honest, I do need to sell it and would like to put it in an index fund because I have quite a bit of it. What the listener could do if they're savvy with investing is do some research and analysis to see which stocks have consistently performed over the past few years and invest in those companies.
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