Just 10 years after the Great Recession in 2008, U.S. stocks are headed toward the longest-bull market ever -- yet little more than half of Americans have stock investments.
In order to get involved in the markets, financial expert Chris Hogan said people first need to be cognizant of where their money is going by getting on a budget and getting out of debt.
That process of becoming financially solvent, he warned, could take at least five years. He suggested people need to make a list of their debt, smallest to biggest, and start by paying off the smallest amount of debt first in increments. Psychologically, it lets the person know that escaping debt is possible.
“It turns out getting out of debt [is] about momentum,” he said during an interview with FOX Business’ Neil Cavuto on Tuesday. “You change your mindset because you see you’re doing it.”
Paying off your debts, Hogan said, is “20 percent head knowledge, and 80 percent behavior.” It’s not easy -- it takes courage and sacrifice to start saving and spending properly, he said -- but people need to recognize the difference between a want and a need.
“Instead of eating out five nights a week, maybe you go one,” he said. “Or if you’re going to get super intense, maybe you try to cut some things back. So we need to redirect our effort, as well as our money.”
Once people get a handle on their money and debt, then they can begin to explore investment opportunities, Hogan said. But first they need to understand that money invested is for “five years and longer,” before they decide their time allotment and expected financial goal.
“I want people to understand where they are,” he said. “Single stocks are like going to Vegas. Everyone on the plane out to Vegas is excited. I’ve been on those plane rides back, where people aren’t as excited, where they’ve gotten stung.”