The markets are dropping and the pessimists are out in full force. What is the average person supposed to do? Well, if you’re a getting rich simply person, you start to invest. What!! You say start to put money in the market? Yes. Are you nuts? Here is why.

Why now

The reason you should start now is because the market is becoming cheaper. How much cheaper? Nobody knows. One the thing about the investment world is this. Everyone has an opinion; nobody has a crystal ball. In other words, we’re all giving educated guesses. However, an educated guess is usually based on “common sense”. So if, you have:
                     A long term vision
                     Time on your hands (25 to 40 years to retirement)
                     Don’t get distracted from the noise (media negativity, nay-                                 sayers)
                     Little cash
This could be a blessing in disguise for you.

Why slowly

The reason I say slowly is that our parents always told us never to dive in unknown waters. The market is no different. Who knows how far down it will go or for how long. Remember, I said no one knows for sure! So, like my pool analogy, how do you go into the pool? One step at a time. Why? Because you don’t want to sink all your money at the top of the market and watch it go down.

The numbers

So let’s take an example. Let’s say you buy an ETF (Exchanged traded Fund) that represents the 500 largest companies on the Standards & Poors (https://www.marketwatch.com/investing/fund/spy ). You buy one at $265.00. The market goes down. The ETF is now at, let’s $200.00. You buy another one. The market continues to drop. The price of the ETF at $175 .00. You buy another one at $150.00. The strategy is what we call Cost Averaging. It’s been around for ages! The simplicity behind this is what getting rich simply all is about.
Let’s summarize:
1 ETF (SPY) bought @ 265.00
1 ETF (SPY) bought @ 200.00
1 ETF (SPY) bought @175.00
1 ETF (SPY) bought @150.00
Total: 790.00/4 = 197.50

For simplicity sake, I used 1 ETF but you could buy as many as you could afford. The idea is ensure you have cash to continue to buy.
Now somewhere in the future the market will turnaround. Let’s say at some future date the ETF goes to 325. How much will you have made?
325 x 4 = $ 1300.00
197.5 x 4 = 790.00
Increase in value: $510.00

Why does it make sense?

The reason this makes so much sense is gettingrichsimply is to “buy low, and eventually sell high”. However, this is fine while reading a blog but I must tell you putting this in practice is quite a different story. Remember, as the markets drop the media outlets will have a field day with the bad news and predicting Armageddon. Therefore, having a long term vision and being logical instead of emotional.

Why you should invest

The reason why you should to do it is simple. Buying regularly (ie. Every month or every quarter) is a strategy of mechanics and not emotions. Imagine saving every month taken off your paycheque and not when you felt like it. Do you think it would be more effective than just buying when it felt good? Which brings me to another point. Timing the market is never a good idea. There are numerous studies that have been done on the subject and all come to the same conclusion. By being on the sidelines, risking just a few days over a long period of time is detrimental to your portfolio.