If you want sexy, watch porn

Building wealth should be bor­ing. It’s cer­tain­ly hard to under­stand that atti­tude giv­en the finan­cial news sports-like style — with play-by-play report­ing from the “front lines”.

The Elephant’s Paycheck blue­print involves reg­u­lar small con­tri­bu­tions towards your wealth build­ing efforts rather than try­ing to time the mar­ket. For indi­vid­u­als, it’s start­ing young fol­lowed by slow and steady that wins the game.

There’s a bit of an inside obser­va­tion about invest­ing that indi­vid­u­als usu­al­ly do the oppo­site of ide­al; indi­vid­u­als usu­al­ly end up buy­ing high and sell­ing low. Partly because the pro­fes­sion­als know stuff before the finan­cial news and indi­vid­u­als respond to news, and part­ly because indi­vid­u­als are more sus­cep­ti­ble to emo­tion­al invest­ing.

Investing over a long peri­od of time lever­ages “com­pound­ing” to make the most of your mon­ey. Similarly, invest­ing con­sis­tent­ly lever­ages “dol­lar cost aver­ag­ing” to max­i­mize your invest­ment tim­ing.

Dollar cost aver­ag­ing can get into math very quick­ly, and so is hard to pen­e­trate for many. That’s why many peo­ple don’t know what it is. Though Business Insider also thinks peo­ple don’t know about it because it’s not sexy:

Unfortunately, dol­lar-cost aver­ag­ing isn’t sexy. It’s much sex­i­er to sell at the top and buy at the bot­tom.

Obviously, your returns would be much high­er if you win the stock mar­ket lot­tery by per­fect­ly tim­ing the tops and bot­toms of the mar­ket. However, almost every­one who tries to do this will find them­selves los­ing mon­ey and lots of it.

The Business Insider is help­ful to under­stand dol­lar cost aver­ag­ing and why you should stick to your invest­ing plan even in down­turns like the one we’re cur­rent­ly expe­ri­enc­ing.