Investing Archives - Monthly Money

Time in the Market, Not Timing the Market

Monthly Money Man on April 17, 2026

One of the biggest mistakes I saw people make wasn’t about what they invested in. It was about when they started.

They’d wait for the “right time.” Wait for the market to drop. Wait until they understood everything. Wait until they had more money saved up.

And while they waited, years passed. And those years cost them more than any market timing strategy ever could have made them.

The Math That Changes Everything

Let me show you two people. Same income. Same investing goals. Different start dates.

Person A starts investing at age 22. Puts away $300 a month for 10 years, then stops completely at age 32. Never adds another dollar.

Person B waits until age 32 to start. Invests $300 a month for 30 years straight until retirement at 62.

Who ends up with more money at 62?

Person A: $1,072,000
Person B: $678,000

Person A invested for 10 years. Person B invested for 30 years. Person A put in $36,000 total. Person B put in $108,000 total.

Person A still wins. By nearly $400,000.

That’s the power of time in the market. (Assuming 10% average annual returns, which is the historical average for the S&P 500.)

Why This Happens: Compound Interest

Albert Einstein supposedly called compound interest “the eighth wonder of the world.” Whether he actually said it or not, the principle is real.

Your money doesn’t just grow. It grows on the growth. And then it grows on that growth. And then it grows on that growth.

The longer your money sits in the market, the more times it compounds. Early years are worth more than later years because they have more time to multiply.

That $300 Person A invested at age 22? It had 40 years to compound. The $300 Person B invested at age 32? Only 30 years.

Ten years doesn’t sound like much. But over decades, it’s the difference between over a million dollars and $678,000.

Time In the Market vs Timing the Market

Here’s what people try to do: wait for the market to drop, then invest when it’s “cheap.”

The problem? Nobody knows when that’s going to be.

I watched people sit on cash in 2013 waiting for a correction. The market kept climbing. They finally bought in 2015 after missing two years of gains.

I watched people panic-sell in March 2020 when COVID hit. The market recovered in months. They missed it.

I watched people wait for the “right moment” for years. The right moment never came. Or it came and they didn’t recognize it.

The data backs this up: A study by Charles Schwab compared different investing strategies over time. They looked at someone who invested at the absolute perfect time every year (the market bottom), someone who invested at the worst time every year (the market peak), and someone who just invested consistently regardless of timing.

The difference in returns after 20 years? Almost nothing.

The person who timed it perfectly beat the person who just invested consistently by less than 1% annually. But the person who waited on the sidelines trying to time it? They lost decades of growth.

Completion Not Perfection

I used to tell clients: completion not perfection. You don’t need to understand everything before you begin. You don’t need a PhD in finance. You don’t need to read every investing book ever written.

You need to understand enough to not make catastrophic mistakes, then start.

Here’s “enough”:

Know which account to use (we covered this last week)
Know what to buy (we’re covering this in two weeks – spoiler: index funds)
Know you’re investing for decades, not days
Know you’ll keep adding money regularly

That’s it. Start with that. You’ll learn the rest as you go.

The “But What If…” Questions

“What if the market crashes right after I invest?”

It might. It probably will at some point. Doesn’t matter. You’re not pulling the money out for 30 years. It’ll recover. It always has.

“What if I’m buying at the peak?”

Maybe you are. Or maybe this “peak” will look like a valley ten years from now. Nobody knows. That’s why you invest consistently over time instead of trying to nail the perfect entry point.

“What if I wait and invest more later?”

You just saw the math. Person B invested 3 times more than Person A and still ended up with almost $400,000 less. Waiting costs you more than you think.

The Best Time Was Yesterday

There’s an old saying: “The best time to plant a tree was 20 years ago. The second best time is today.”

Same goes for investing.

If you’re in your early 20s and reading this, you have the most valuable asset in investing: time. Use it.

If you’re 35, 45, or 55 and reading this, you’ve lost some time. You can’t get it back. But you still have years ahead of you. Don’t waste those too.

Here’s what I learned over the years: completion not perfection. Starting with good enough beats waiting for perfect every single time.

The biggest mistake isn’t starting at 32 instead of 22. The biggest mistake is being 42 and wishing you’d started at 32.

Your Action Step This Week

If you already have your investment accounts open: Make your first contribution this week. Even if it’s just $50. Get the account funded and pick what to invest in (we’ll cover what to buy in a couple weeks).

If you don’t have accounts yet: Go back and read last week’s article. Open a Roth IRA. It takes 15 minutes.

Don’t wait for perfect. Perfect doesn’t exist. Start now. Let time do the heavy lifting.

See you at the top.

Your Investment Accounts Explained: Which One to Use and When

Monthly Money Man on April 10, 2026

There are only a handful of investment accounts you need to know about. Once you understand what each one does, the decision of where to invest gets a lot simpler.

Let me break down the ones that matter.

Roth IRA vs Traditional IRA

An IRA is an Individual Retirement Account. You open it yourself—it’s not through your employer. The contribution limit for 2026 is $7,500 per year (or $8,500 if you’re 50 or older).

The difference between Roth and Traditional comes down to when you pay taxes:

Traditional IRA: You get a tax deduction now. The money grows tax-deferred. You pay taxes when you withdraw it in retirement.

Roth IRA: No tax deduction now. The money grows tax-free. You pay zero taxes when you withdraw it in retirement.

Which One Should You Use?

Here’s my general rule: Most people should use a Roth IRA.

Why? Because tax-free growth for the rest of your life is incredibly powerful. You contribute after-tax dollars now, and everything it grows into—decades of compound growth—comes out tax-free in retirement.

The Traditional IRA makes sense if you’re in a very high tax bracket now and expect to be in a much lower bracket in retirement. But for most people building wealth, the Roth is the better bet.

The Magic Window: January 1 to April 15

Here’s something that confuses almost everyone: between January 1 and April 15, you can contribute to an IRA for EITHER the previous year OR the current year.

Right now, between January 1, 2026 and April 15, 2026, you have a choice:

Contribute toward your 2025 limit ($7,000 – deadline April 15, 2026)
Contribute toward your 2026 limit ($7,500 – deadline April 15, 2027)

This is critical: When you make a contribution during this window, you need to tell your brokerage which year you’re contributing for. They’ll ask you. Don’t just assume.

Here’s why this matters: If you contribute $7,000 in March 2026 and declare it as a 2025 contribution, you still have your full $7,500 available to contribute for 2026 (deadline April 15, 2027). But if you accidentally declare it as a 2026 contribution, you’ve already used up your 2026 limit.

The strategy: If you’re reading this before April 15, 2026, and you didn’t max out your IRA for 2025, do that first. Get that 2025 contribution in before the deadline. Then start working on your 2026 contributions.

The window closes April 15. After that, any contributions automatically count toward the current year.

The 401k (or 403b)

This is the retirement account through your employer. Some employers call it a 403b—same concept, different name depending on whether you work for a for-profit or non-profit.

Key things to know:

The contribution limit is much higher than an IRA: $23,500 for 2026 (or $31,000 if you’re 50+). This is separate from your IRA limit—you can max out both if you want.

Many employers offer a match. If they match 50% of your contributions up to 6% of your salary, that’s free money. We’ve talked about this before: get the match first, before almost anything else.

Most 401ks are Traditional (pre-tax contributions), but some employers offer a Roth 401k option. Same tax treatment as a Roth IRA—you pay taxes now, it grows tax-free.

The strategy: Contribute at least enough to get your full employer match. Then max your Roth IRA ($7,500 for 2026). Then come back and increase your 401k contribution toward 15% of your income total.

When You Need a Brokerage Account

A brokerage account is just a regular investment account. No tax advantages. No contribution limits. No retirement rules.

You pay taxes on dividends and capital gains as you go, and you can withdraw money anytime without penalties.

When to use it:

If you’ve maxed out your IRA and 401k and still want to invest more, a brokerage account is next.

If you’re saving for something before retirement—a house down payment in 10 years, for example—and you want to invest that money, a brokerage account works.

If you’re self-employed or your employer doesn’t offer a 401k, you might use a brokerage account alongside your IRA.

It’s the most flexible option, but you lose the tax advantages.

The 529 Plan (Brief Preview)

This is a college savings account with tax advantages. We’re covering this in detail next week, but the short version: if you have kids and college expenses coming up, a 529 can save you money on state taxes and let the money grow tax-free for education expenses.

If you have college bills hitting in August and you’re sitting on cash, next week’s article will show you why it might make sense to run that money through a 529 first.

Where Do You Actually Open These?

For IRAs and brokerage accounts: Vanguard, Fidelity, or Schwab. All three are solid, low-cost options. I’m not paid to recommend any of them—they’re just the ones I’ve seen work well for decades.

For 401ks: You don’t get to choose—your employer picks the provider. But you do get to choose what you invest in within that 401k. We’ll talk about that in a few weeks.

For 529s: Your state might offer tax benefits for using your state’s plan. We’ll cover this next week.

The Priority Order (Again)

Since we’re talking about multiple accounts, here’s the order that makes sense for most people:

Get your employer match in your 401k
Max your Roth IRA ($7,500/year for 2026)
Go back to your 401k and increase contributions toward 15% total
If you have kids and college coming, consider a 529
If you’ve maxed everything and still want to invest, open a brokerage account

This isn’t rigid. Your situation might be different. But this order works for most people building wealth.

Your Action Step This Week

If you don’t have a Roth IRA yet, open one this week. It takes about 15 minutes at Vanguard, Fidelity, or Schwab. You don’t have to fund it immediately—just get it open.

If you already have accounts, write down your contribution amounts:

How much are you putting in your 401k? (What percentage?)
Are you maxing your Roth IRA? ($7,500/year for 2026)
Are you getting your full employer match?

Know your numbers. That’s how you know if you’re on track.

Next week: the 529 decision and why timing matters if you have college expenses coming up.

See you at the top.

Are You Ready to Start Investing?

Monthly Money Man on April 3, 2026

One of the most common questions I got as a financial advisor: “Should I start investing?”

My answer was always the same: “Show me your foundation first.”

I’d sit across from people who’d read about tax-free growth and compound interest. They were fired up and ready to open a Roth IRA or start buying index funds. But when I asked about their foundation—emergency fund, employer match, high-interest debt—the pattern was almost always the same.

No emergency fund. Leaving employer match on the table. Carrying credit card debt at 20%+.

They weren’t ready to invest yet. Not because they were doing something wrong, but because the foundation wasn’t there. And without the foundation, investing is just building on sand.

The Foundation Comes First

Before you put a single dollar into the market, you need three things in place:

First: Safety Net #1
One month of expenses sitting in a savings account. Not invested. Cash.

This is your buffer against life. Car breaks down? Water heater dies? Unexpected medical bill? You handle it without going into debt or selling investments at the worst possible time.

Without this, the first emergency forces you to either take on high-interest debt or liquidate your investments—probably when the market is down.

Second: Employer match (if you have one)
If your employer offers a 401k match of 50% or more, contribute enough to get the full match. That’s free money with an immediate guaranteed return you can’t get anywhere else.

This is the only exception to “build your cash reserve first.” Get the match, then finish building your emergency fund.

Third: High-interest debt under control
Anything above 10% gets paid down before you start investing beyond the employer match.

Here’s why: if you’re paying 20% on credit card debt while trying to earn 8% in the market, you’re going backwards. You can’t invest your way out of high-interest debt. The math doesn’t work.

Why the Order Matters

I’ve seen people do this backwards. They start investing while sitting on $15,000 in credit card debt at 22% interest.

They feel like they’re “getting ahead” because they’re investing. But they’re actually losing ground every single month. The interest on their debt is growing faster than their investments.

Or they invest without an emergency fund, then something breaks, and they have to sell their investments to cover it. Now they’ve locked in losses and reset their investment timeline.

The foundation isn’t optional. It’s what makes investing actually work.

When You’re Actually Ready

You’re ready to start investing when you can check all three boxes:

✓ One month of expenses in cash
✓ Getting your full employer match (if available)
✓ No debt above 10% interest

If you can’t check all three, you’re not ready yet. And that’s okay.

Build the foundation first. It’s not as exciting as watching your investment account grow, but it’s what makes the growth sustainable.

What “Not Ready” Looks Like

If you’re not ready to invest yet, here’s what you should be doing instead:

Focus on Safety Net #1. Every dollar you were thinking about investing goes into your savings account until you hit one month of expenses. Use the pay yourself first system we talked about in March.

Get your employer match. Even if you’re still building your emergency fund, contribute enough to get that free money. Don’t leave it on the table.

Attack high-interest debt. If you’re carrying balances above 10%, that’s your investment right now. Paying down 20% debt is a guaranteed 20% return.

This isn’t glamorous. It doesn’t have the appeal of “I’m an investor now.” But it’s what actually works.

The Reality Check

Most people want to skip straight to investing because that’s where the exciting stuff happens. Compound interest, tax-free growth, building wealth—I get it.

But investing without the foundation is like trying to summit a mountain without the right gear. You might make it partway up. But the first storm hits and you’re in trouble.

The foundation is your gear. Build it first. Then climb.

Your Action Step This Week

Pull out a piece of paper and write down:

Do I have one month of expenses in savings? Yes or no.
Am I getting my full employer match? Yes, no, or N/A.
Is all my debt below 10% interest? Yes or no.

If you got three yeses (or two yeses and an N/A), you’re ready. Next week, we start talking about where to actually invest and why time in the market beats timing.

If you got any nos, you’re not ready yet. And that’s fine. You know what to work on first.

See you at the top.