This is part of our Open Book series, you can start here if you did not read our first post.
Winter is coming and it has been a while since our last Open Book series. We try to be as accurate and transparent as possible to give you a proper idea of our finances. We attribute most of our success our high savings rate and constant tracking of our progression with tools such as Mint or Personal Capital.
Consumerism is a norm in America and most people go to the mall because… why not? The Motley Fool reported that the typical woman makes 301 trips to the store annually, spending close to 400 hours a year buying clothes, books, food, and toiletries. This is a LOT of hours! But does shopping actually make you happier?
Simply by looking at the increasing average credit card debt, one can quickly see how this is not sustainable.
If you are invested in the stock market, you might cringe when you see your portfolio drop 10%, or even show a little tear when it drops 40% but you shouldn’t go through all of this. I have already talked about why you should be glad to invest in a Bear market and today I will expand a bit on the topic with a few tactics to ease the ride.
To clarify before we start, dollar-cost averaging (or DCA) refers to periodic investments regardless of the share price, whereas lump sum investing refers to investing in one single purchase. In other terms, DCA is when you have a sum to invest but wait a certain time frame to invest in multiple smaller purchases rather than investing as soon as you can.