Chase Bank performed a survey and found that many of their customers want to manage their money themselves. That’s great news except for the other data the survey showed: Most of the people that said they wanted to manage their money themselves, weren’t.
The promise of “I’ll get to it next week” gets broken, the investment vehicles that get set up don’t get funded, or the money that was invested goes stale when the market shifts. Time is on our side when the money is working for us, not when it’s in our pockets or left unattended.
Do-it-yourself finances are great…
… if you do the work. If you don’t do the work and default to the position of an inactive investor: Money sits in your checking account allowing inflation to eat away at the value – or worse: IT GETS SPENT!
If you have investments set up then congratulate yourself: You’ve already done the hard part! The rest is easy: Put money into the accounts on a regular basis and occasionally review the statements to make sure you are in investments that will take you where you want to go.
Simple retirement savings accounts
One of the most important things you can do for your financial future is set up a retirement account. A good majority of the working class has access to 401(k) and 403(b) accounts. But those are not the only options. Even if you have access to a retirement account through your work you have some other options available to you.
Take for instance a ROTH IRA through Vanguard. This is an account that you can easily start with just a few dollars and have money withdrawn from your paycheck every payday – automatically!
Simple retirement investment options
I don’t like telling people what to invest in, just like I don’t tell people what their budgets should be, but if you want to get started I would recommend looking at an index fund. An mutual fund like the S&P 500 has a broad variety of stocks and moves with the market. It will have its good days and it will have its bad days, but it will get you on the investing locomotive with relative ease.
I recently opened an account with Betterment and I have to say I am impressed. I can’t tell you how good the investments are, I started the account only 2 months ago, but I can tell you that it only took 10 minutes to set up and there is only one decision: How much to have invested in stocks or bonds. As an added bonus, if you sign up using my affiliate link they will give you a $25 bonus when you make an initial deposit of $500. That’s a 5% rate of return before you even leave your chair!
Build wealth, then get yourself a professional
Once you have amassed some wealth and have complete control over your finances, it would make sense to see a professional adviser to make sure that you’re on track to reach your goals. I like the idea of a fee-only or fee-based adviser. They make money by helping you with your choices and your goals, not by selling you their investments.
That is not to say that commission-based FPs aren’t valuable, my wife and I have one. But if you are a “do-it-yourselfer” then you need to realize that there is a vast amount of information out there that you don’t know.
Getting expert advice on investing is like going to a barber or salon: You can cut your own hair but it might be better to have a professional’s help
The key to doing it yourself is getting started. Get started today and pay attention so you can earn interest!