You have to actually invest the cash in your brokerage account

You might have read the title and said to yourself, "WELL DUH"

Well, it isn't "duh" to everyone, and if this post saves just ONE person from making this mistake, it's worth it to me. Here's why:

I had a guest on the podcast who told me a story (I forget who it was - whoever it was, you get credit. I think it might've been @dougnotsofunny) about an individual who contributed to their retirement account for 20-30 years, as she should. Then, when she got to retirement, she excitedly opened her brokerage statement and realized she didn't have much more than she had contributed. She expected to have a lot more than that.

Why didn't she? Well, she didn't ACTUALLY invest the money. It was sitting in cash in her retirement account, earning practically nothing for the last 20-30 years, when it could've been compounding.

Everyone told her she needed to invest, so she listened and invested - or so she thought. No one told her she actually had to do something once the money was in the retirement account.

It's pretty obvious to see the devastating impact this could have on one's financial future. So, for anyone who may not know already, a retirement account is just that - an account. It's a bucket of money, it's a place to store money, it's a holding place. It isn't an investment by itself. Once the money is transferred into your retirement account, you have to then login to your online account and choose which investments you want to buy with the cash you just transferred into your retirement account.

The process: earn cash -> transfer to retirement account (nothing is happening yet) -> buy investments (start earning, compounding).

Please don't make this mistake, and if you know anyone who might, please share this newsletter with them.

All the best,

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