The stock market is a great way to earn money. Who hasn’t heard the story about how Warren Buffet began to grow his fortune by buying shares at only age 11? But for every Warren Buffet, there’s hundreds of far less savvy people, who may need some help to learn what to do with their shares.
Weirdly enough, people who have passed might be excellent teachers of good stock market habits. That’s according to Mike Brassfield of The Penny Hoarder, who believes in turning to the bank accounts of these people to learn best practices for your stock holdings. While there are plenty of important rules of advice to learn from experts who are alive and well, you could also learn something from them
What do people who have passed haveto do with stocks?
According to a popular urban legend, the stock accounts with the most successful (meaning highest returns on their investments) accounts are the ones that belong to either people who have forgotten about their shares or are not alive. This is because they don’t have any emotional responses to the economy, which can serve as a great teacher for anyone looking to invest right now.
1: Buy and hold investments
People who are no longer living cannot sell their shares. This means that although a stock may plummet and some people might panic-sell, the account of a person who has passed will stay consistent and will earn money once the stock improves again. It’s counterintuitive to our emotions, but once you buy a share, just hold onto it. Most shares will increase in value with some time and patience.
2: Timing the market will fail you
The stock market goes up and down in value all the time, often unpredictably. It makes more sense to focus on the long term, rather than trying to buy at a stocks lowest point and sell when you think it’s reached it’s peak.
According to Robin Hartill, a financial advisor, “The timing of your investment matters much less than how much time you have to invest. The cost of waiting for the perfect time to invest is high. You’re missing out on long-term growth.”
3: Getting life insurance can help your family too
Life insurance is the type of investment that won’t benefit you immediately, but it does give you the comfort of knowing that your family will be taken care of financially once you die. Funerals are expensive, and you never know what other expenses might pop up for your loved ones once you are gone. A life insurance policy can help you protect them from all sorts of unforeseen circumstances.
Some good life insurance policies to consider are: Prudential, State Farm, and USAA. You should do some research of your own to make sure you are choosing the best policy for you and your family.
4: Don’t overthink and overcomplicate your investments
Investing should not be used for short term investment, or as some get rich quick scheme. It’s much better to buy shares early and hold on to them. The stock market will fluctuate, but if you hold on to your shares, you will make money over time. Brassfield says people who have passedcan show you how to do this:
“[People who have passed] investors are great at not overthinking things. They just plug right along and do their thing without any fuss. That’s why their investment portfolios perform so well.”
It’s best to buy shares in a stock and almost not think about them for years. Then, you will see that without panicking or overthinking it, you have made some money over time.
The takeaway:
The stock market can be a tricky and scary thing to understand. While it is best to do some research and invest in companies you believe in, and companies that generally perform well financially, you should also take some tips from those who have passed and buy those shares early and then practically forget about them.
Check out The Penny Hoarder article to learn more!
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