In earlier posts in my time and money series I talk about investing in the stock market for the long-term, ideally for over 10 years but certainly for over 5 years so that you can ride out gyrations in the markets and allow the magic of compounding to work.
Stick your investment away, select automatic reinvestment of all dividends to supercharge the compounding effect, and forget about it. This is known as the Robinson Crusoe approach. Invest money in anticipation of being marooned for years on a desert island with no electronic devices. Whilst you’re stranded your investment can do its own thing and grow, unimpeded, for you. And, if you invest in the UK via an ISA, gains and dividend reinvestments are tax-free. You don’t even need to trouble your island idyll by worrying about the taxman.
You can read about this and other investing strategies in my book, 10 Things Everyone Needs to Know About Money.
