While it's nice to watch our favourite investments earn us a tidy return, the key to long-term investing is the magic of compounding.
By investing in a diversified ASX portfolio and consistently increasing our portfolio size with our own hard-earned cash, Fools should see a long-term upwards trend in their overall wealth.
But it can be hard to find the extra money to put aside for investing in the likes of Afterpay Touch Group Ltd (ASX: APT) after all the bills and expenses are paid.
So, here's 3 simple saving tips to help you find that little bit extra to invest in your ASX portfolio in 2019.
1. Keep your expenses as long as possible
While it can be tempting to splash out on that luxury item or expensive meal to treat yourself at the end of the week, the longer you can keep your expenses below your earnings, the better.
By making items yourself or cooking that nice meal at home, you can still treat yourself without the hefty price tag and set aside that extra cash to invest in a hot ASX stock like Magellan Financial Group Ltd (ASX: MFG) and see compounding returns work its magic.
2. Set your financial goals early
Most of us have set goals in some part of our lives, be it in our studies, in our careers or in our personal lives.
But, for many Australians, financial goals fail to make it to the top of the list as we often just put finances in the "t00 hard" basket.
The key to consistently growing your investment portfolio is to make long-term, buy-and-hold investments, which is difficult to do if you don't have the cash to spend.
I find it's easiest to break my financial goals down into short-term (up to 12 months), medium-term (1 to 3 years) and long-term (3 years plus).
By doing this, you can instantly get back in control and also develop a system with tip #1 to reward yourself when you meet a goal on your timeline!
3. Keep your bad debts low
Many of us have credit cards in Australia, and many of us enjoy spending on our credit cards.
While that's fine, and I'm a big believer that credit cards can provide great benefits when used carefully and effectively, it's also easy to fall into a debt trap.
Australia has some of the highest debt-to-income levels in the world, and the key to freeing up that cash flow for investing in your favourite WAAAX stock is to keep your debts low and manageable.
With these three tips, hopefully, you'll be well on your way to building your own system that works for you and get back to doing what you do best – investing!
