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Are You Investing Enough?

I bet you made a few New Year's resolutions at the start of 2015. In fact, I'll do you one better -- I bet your resolution was to either eat better or exercise more. I'm no psychic, but studies show those are the two most common New Year's resolutions.

Aside from health and fitness though, the Journal of Clinical Psychology notes that financial resolutions rank No. 3 on the list of the most popular promises people make to themselves each year. Sadly though, the journal also notes that only 8% of people are successful in achieving them.

Most fail fairly quickly.

I bring this up to ask an important question -- one that I've never asked my readers before...

Are you investing enough?

It's an honest question. And you needn't undergo some sort of financial crash diet to figure it out. All you really need is a basic household budget and a little time around the kitchen table with the people in your life who spend your money.

Budgets, I've noticed, are like balance sheets in one regard: they scare people silly. See it's not the list of expenses that makes people uncomfortable; it's the "other" number that makes them weak in the knees -- their income.

People just hate to stare that number in the face.

Chances are you think you're underpaid. Believe me, I've dealt with the same thing before... but here's my advice: don't focus so much on what you make .

Take out a sheet of paper and add up what you spend (be complete and accurate, or it doesn't count).

If you're blowing $12 at Starbucks every morning, put it down. I know it's only twelve bucks, which most of us can regard as nothing. But it adds up to more than $3,000 over the course of a year, and that's something -- in fact that really starts to grow over time when the miracle of compound interest kicks in. (For a look at how Americans spend their money, check out this chart from the Statistical Abstract of the United States .)

Now, I don't talk much about personal finance in my premium newsletter, Game-Changing Stocks . My readers and I normally spend our time looking for what I call "The Next Big Thing" -- companies and trends that will change the baseline assumptions in their industry, and deliver triple-digit-plus gains to smart, early investors.

But getting the most out of your personal budget is important and something I felt I had to touch on, if only briefly, today.

What you ultimately need to find with your budget is your total non-discretionary spending. This is what you must spend to keep your household running, and it should be subtracted from your monthly take-home pay.

The rest is "discretionary" income -- funds you can do whatever you want with. Maybe that's new clothes... maybe it's an annual vacation... it doesn't matter. But after you make out a budget, ask yourself this:

"Have I (really) included sufficient funds for investment?"

Some people (me, to name one) go so far as to put investing in the non-discretionary category. Others leave it in the discretionary column. It really doesn't matter where it gets listed so long as you've thoroughly considered whether you're socking enough away.

Fact: I have never seen an individual or family go through budgeting and NOT find they could spend less and invest more. It boils down to priorities. I'm not above the occasional splurge. But my top financial priority is ensuring I spend as little money as possible that I could invest. That's how I live.

I am not saying you should do the same. I'm just saying it's worth thinking about.

My advice: If you haven't already, make a household budget based on three months of spending data. Write down your spending priorities, and seek to right-size your monthly allocation to your investments. You may be surprised by what you see.

I'll take it a step further. Longtime Game-Changing Stocks readers know that I recommend an 80/20 solution to your portfolio. Put 80% of your money in to safe, conservative investments that track the market (like an index fund).

Then take the other 20% and put it into the kinds of investments we cover in Game-Changing Stocks.

One of these companies, for example, is a little-known Apple partner whose products are found in 99% of the world's smartphones and tablets.

Naturally the stock is delivering some pretty impressive gains for my Game-Changing Stocks subscribers.

As I mentioned earlier, our primary goal is to find stocks with triple-digit gain potential. Sure, we'll miss the mark now and then, but all it takes is a few blow-out winners to make up for the occasional stinker. Do that, and you'll be head-and-shoulders above the crowd.

By the way, if you're interested in learning more about game-changers that could deliver outsized returns to your portfolio, I've put together a new report detailing Apple's latest revolutionary innovation (it's not the Apple Watch) and the little-known companies that could profit the most .

If you want the name and ticker symbol of the company I mentioned above -- and several other Apple partners poised to see huge returns in the coming months -- you can get them by accessing my new report here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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