RETIREMENT REALITIES
  • Home
  • Topics
    • All Posts
    • Submit
  • About
  • Contact

Managing Investments Can Be easy

3/23/2025

0 Comments

 
Note:  This post was create in an attempt to internalize what I've recently learned about investing. 
Picture
"Mad Dogs" print by Jack Vattriano - bouquiniste stall in Paris
Step-by-Step Suggestions
If you're reading this post, chances are high that you're capable of managing your own investments and increasing your long-term results. You may even enjoy the process. For help getting started, consider the monthly step-by-step suggestions provided below. "Managing your own investments" is a loose description that will probably mean different things to different people. The suggestions listed in Months 1-8 do not involve any buying, selling or trading; they're more about understanding, learning and analyzing. Just by following those suggestions, I can almost promise that you'll make better decisions about your finances in the future, even if you stop there. (Note: This info is valuable for anyone who is at least 18 years old.)

There are multiple advantages to managing your own investment portfolio; one is that you'll save the annual fees many financial advisors charge; they usually vary from 0.5-2% of your portfolio value. These fees may not sound like much, but if you run the numbers, you'll see that these seemingly "small" figures add up to a lot of money over time.

Many people believe that financial advisors who charge fees based on portfolio value enable them to "beat the market", and the fees paid to these advisors are recouped through higher returns. But studies show that beating the market is not the norm. In fact, over the last three years (as of Mar 2025), only 15% of Large-Cap* mutual funds "beat the market". So, if you're invested in a Large-Cap stock mutual fund, and it's not an S&P 500 Index Fund, there is an 85% chance that your investment underperformed the market. i.e. You paid someone to help you underperform the market in the long-term.
*Large-Cap: A large-cap stock represents a publicly traded company with a market capitalization (total value of outstanding shares) of $10B or more (often considered a stable and established investment). 
Performance of
​Large-Cap Funds vs S&P 500

1 Year | 3 Years | 5 Years | 10 Years
Picture
Interactive Chart
Years ago, a co-worker told me, "You're probably smarter than your financial planner." That was a real thinker. Over time, we learned enough to realize that investing didn't need to be complicated, nobody cares more about the outcome of our investments than we do, and self-management guarantees that we can save 0.5-2% of our portfolio value each year (because we avoid yearly AUM fees). So we started down the path of managing our own investments and have never looked back. The following suggestions may enable you to increase the likelihood of improving your long-term investment returns too.

Step-by-Step Suggestions for
​Managing Your Investments
Disclaimer: I'm learning as I go; not a financial advisor. Please challenge these ideas by posting comments below so that we can all learn more and/or understand another perspective. 
Compare these ideas with advice you collect from the Internet, friends, relatives, co-workers and financial advisors. The goal is to help you understand that you can do this and to spark your enthusiasm.
TAXES:  Don't sell any assets based on this advice until you've reviewed the Month 8: Tax Considerations section.
IF YOU'RE YOUNG (or any age) and think the info below is too vague, you can read More About Investing and Saving for a little more explanation.
Hopefully the suggestions below will enable you to save a lot of money by taking control of your investment portfolio within a year or less.
You can:
  • Work the steps faster (or slower) than the suggested monthly pacing
  • Research topics that confuse you
  • Ignore ideas that don't meet your needs
  • Work the steps in a different order
  • Pose questions and/or offer suggestions via the comments below

Picture
Create a Simple List
  • Make a list of all of your financial asset accounts (it's OK to start with an incomplete list)
  • Include this info:
    -- Account Name/Description
    -- Institution holding the asset(s)
    -- Account Numbers
  • Using a spreadsheet isn't necessary, but will be helpful later 
Example List of Financial Asset Accounts
Picture

Picture
Add More Info to Your List
Following the example below:
  • Describe the financial asset(s) within each account on your list
  • Categorize the funds as Cash, Stock, or Bonds
    Cash = Checking & Savings accounts, CDs, Money Market accounts, T-Bills, etc.
    Stock = Individual Stocks, Mutual Funds, ETFs, Index Funds, etc.
    Bonds = Individual Bonds, Bond Funds, etc.
  • Describe each category, description and fund within a given account
    -- Asset accounts are listed in a row on the left
    -- Asset categories, descriptions, and fund names are listed in columns along the top.
Picture

Picture
Record the Value of Your Accounts and Funds
As shown in the example below:
  • Enter the value of each fund on your list 
  • Calculate the percentage of total assets held as Cash, Stock and Bonds in a spreadsheet (as shown below) or you can use an online tool like the Morningstar® Instant X-Ray™.
  • Save a copy of this file at least once a year, so that you can track your progress for self-encouragement!
Picture

Picture
Analyze Your Allocations
  • What percent of your portfolio should be in cash vs stock vs bonds?
    ​Advice is easy to find based your age and goals. Example advice: Asset Allocation
  • Many believe that money you’ll need within 5 years should not be invested in the stock market because the market can be volatile in the short-term. Some think it's OK to invest that money as long as some of it is also invested in bonds to balance the risk.
  • ​You may want to set short term goals to balance your portfolio. i.e. Maybe you need to build up cash reserves, invest more in stocks and/or bonds, or just continue investing at your current rate and ratios.
Sample Asset Allocation Recommendations for Retirement by Age
Picture

Picture
Analyze Your Stock Holdings
  • Few Large-Cap mutual funds "beat the market" over the long term (i.e. produce larger returns than the market in general). This is why many investors simply invest in market-based “Index Funds”.
    ​You can learn more about them here: What is an Index Fund?
  • Many US investors think it's also smart to invest in one or more International Mutual Funds. 
    ​This is a form of diversification.
  • Investing in individual stocks is risky, but there are a few reasons to consider it under certain circumstances. 
    e.g. If your employer offers an attractive stock purchase plan that enables you to purchase company shares at a discounted rate, it could be smart to exercise this valuable benefit because most investment experts advise against walking away from "free money"!
  • Investing in an S&P Index Fund or a Total Stock Market Index fund and an International Index Fund is all most people need in terms of stock holdings.
    ​Example S&P 500 Index Funds: 
    Fidelity, Vanguard, Schwab
  • You can compare your current fund's/funds' long-term performance to an S&P Index Fund here: Compare
The stock market is a device for transferring money from the impatient to the patient. 
-- Warren Buffet

Picture
Analyze Your Bond Holdings
  • Bonds soften the volatility of an investment portfolio because they don't move as dramatically as stocks do, and they tend to move in the opposite direction of stocks.
    e.g. When the stock market goes down, the bond market tends to go up and vice versa. 
  • Just like a market-based Index Fund provides solid value, a "Total Bond Index Fund" can round out your portfolio and is all most people need in terms of bond holdings.

    ​Example US Bond Funds: 
    Fidelity, Schwab, Vanguard

Picture
Analyze Your Cash Holdings
  • Cash you'll need within the next 6-12 months is often stored in a checking or savings account for easy access
  • Cash you'll need in 6 months to 3-5 years may earn more interest in a CD, Money Market Account or T-Bill
  • Do you have enough cash to meet your needs or more or less than you need?
  • Do you have an Emergency Fund set aside?

Picture
Tax Considerations
  • When you sell financial assets, it's smart to consider the tax implications.
    e.g. Moving assets within a single retirement account shouldn’t affect your short-term taxes, but selling assets outside a retirement account or from one retirement account to another could have big tax implications at the end of the year. 
  • This topic can get complicated. You can learn a lot about it on the Internet, via YouTube, from books and from people. If you have questions or concerns it might be worth paying a tax expert to look at your situation and provide you with advice. You'd want to pay by the hour, not a recurring fee based on the value of your assets.

Picture
Simplify 
  • Needless complexity is a waste of time. Is there a way to simplify your list?
    e.g. Combine accounts? Transfer money from one fund to another? Are multiple funds and/or accounts serving the same purpose but costing you needless time?
  • Simplify your list, if needed, by consolidating your assets into fewer accounts always remembering to keep tax implications in mind. Remember:
Don't sell any assets 
based on this advice 
until you've reviewed the
​Month 8: Tax Considerations
 section.

Picture
Adjust Your Allocations, if needed​
  • If your investment allocations (cash vs. stock vs. bonds) don't align with your goals (see Month 4: Analyze Your Allocations), you may want to adjust your allocations and/or invest in a way that balances your portfolio over time.
  • REMEMBER to consider the tax implications described in Month 8: Tax Considerations. 
Don't sell any assets 
based on this advice 
until you've reviewed the
​Month 8: Tax Considerations
 section.

Picture
Think About Your Goals for the Future
  • Manage your investments in a way that enables you to live your best life!
  • Think about how your investments will help you live the life of your dreams. e.g. Preparing for retirement, educating yourself and/or others, traveling, purchasing a home, starting a business, and/or being a generous human.
  • Start playing with investment calculators and tools to better understand what it will take to achieve your goals.

Picture
You're Managing Your Own Investments
  • Review your portfolio on a regular basis to be sure your funds are continuing to meet your financial goals. (Quarterly? Annually?) 
  • Does this advice make sense? Can you think of ways to improve it? Maybe you've concluded that you're willing to give 0.5-2.0% of your portfolio's value each year to a financial advisor who can manage things for you. If you enable them to manage your assets for 10 years, there's a (small) chance they'll be able to "beat the market" enough to cover the costs of their fees.
  • Here are links to help you learn more (not in any order):
    -- Why You're Likely Better Off Investing On Your Own
    -​- Jill on Money (interesting/entertaining podcasts, videos and more)
    -- Investing Rules of Thumb
    -- Investing for Beginners
    -- Expense Ratio
    -- Bogleheads
    -- Don't Panic When the Markets Are Down​
    -- Die with Zero (I haven't read, but find the concept intriguing)

On a more personal note ...
​
Jim's been managing our investments for about 35 years, while I managed our budget. Since retiring, I've been learning more about our investments. This post is a result of my high-level learnings and desire to share the information in easy-to-understand and actionable bites. You may be relieved to hear that Jim has reviewed (and improved) the information.

And while we don't pay a regular fee to have someone else manage our portfolio, that doesn't mean we don't seek advice regularly and/or pay for advice on occasion; we do both. Most recently, we paid to talk with Mark Zoril and we regularly talk with our Fidelity advisor (who doesn't charge a fee), as well as friends and family.

As I stated at the beginning of this post, we're not professionals and don't claim that this is the only or best way to manage investments. Instead, we offer this up as food for thought and an invitation for you to share what you know. We hope to learn from you.

-- Kathy
Frequently Asked Questions
Q:  Why did you document this info?
A:  I've been learning more about investing, and this info reflects what I've internalized so far. If you have ideas that will help us increase our returns, I want to hear them. This is my way of testing what I think I know.
0 Comments

Unbelievably Great Healthcare Insurance

1/15/2025

12 Comments

 
Picture
Could the ACA be right for you too?
The ACA (Affordable Care Act, also known as "Obamacare"), provides us with great health insurance at an unbelievably low rate. We're sharing what we've learned about it, in case you find the info helpful.
Remember: We're just a couple of yahoos stumbling through this. We're not experts or advisors :)

HOW IT WORKS (as far as we can tell):
  • Each state has an ACA marketplace (or "exchange"). In Colorado it's called "Connect for Health Colorado".
  • Go to the ACA marketplace website for your state and
    -- Set up an account
    -- Fill out the application including your projected income and other info
    -- 
    Select a health insurance plan from the listed options (there are lots in Colorado)
  • Your projected income determines the value of the "Advanced Premium Tax Credits" you will receive.
    These "tax credits" are paid directly to the insurance company to cover a portion of your premium each month; you pay the remaining balance of your premium.
    ​(e.g. We qualify for $2,028.46/month in "Advanced Premium Tax Credits", and pay the remaining $111.76/month.)
  • Your projected income also determines your "Cost-sharing Reduction" benefits. 
    These benefits lower what you pay when you receive healthcare by reducing deductibles and out-of-pocket costs.
    (The reductions can be drastic. e.g. Our individual deductibles are reduced from $5,000/year to $100/year.) 

Our Experience
We've found the sign-up process and "system" to be complicated, and hope that the info provided here might make it easier for you. The first year we used the ACA (2020), Jim spent ~40 hours on the phone* getting it all to work. This year we dug into the details and feel like we have a much better understanding of the hows and whys. Also, this year our rates are 25% lower than last year and lower than they've ever been. We wonder if maybe the "Infrastructure Act" has something to do with this, but don't really know. 
* In hindsight, this was the result of us asking too many questions. We should have just filled out the online forms and shut up.

INCOME Determines Monthly Premium and Some Benefits
  • "Income" is defined as MAGI (Modified Adjusted Gross Income )
  • The more MAGI you report on your taxes (& in the ACA tool), the lower your Adv Premium Tax Credits become (so the more you will pay toward your premium each month)
  • Medicaid: A projected income below ~$29K/yr automatically applies us for Medicaid (called "Health First Colorado" in CO) instead of the ACA. Note that income thresholds vary by state and maybe even by county.
    Medicaid is not our desired outcome, and even entering "projected income" numbers that low into the online tool created huge headaches that took many hours to resolve. Note: Some people report satisfaction with Medicaid.
  • We've found the joint MAGI "sweet spot" to be ~$30-35K/year to qualify for great "Advanced Premium Tax Credits" so we pay almost nothing toward our premiums each month

Non-Retirement and/or Roth IRA SAVINGS Enable You to Increase ACA Benefits
A layoff and start-up experiences led us to border on financial paranoia during our working years, so we stashed savings in non-retirement investment accounts. This enables us to postpone use of our retirement accounts and receive great ACA benefits. However ...
  • It's possible that the savings we're realizing now may be more than lost in future taxes because our IRA RMDs (Required Minimum Distributions) will be higher in the future.
  • Two financial experts have advised "it's hard to know" if we're hurting ourselves long-term, so they think our plan seems reasonable

Our Healthcare Insurance for 2025
Healthcare Plan: Anthem Silver Pathway 5000 $0 Select Drugs (an HMO)
Premium cost to cover both of us: $2,140.22/month
Amount we pay to be on the plan: $111.76/month
NOTE: The published individual deductible for this plan is $5,000/person, but because of our low income status, our deductible is $100/person. Max out-of-pocket expenses are also greatly reduced for us.

INCOME and BENEFITS: Another data point
We pay little because our income is low. We know of a person who is single (in Colorado) who will also be using the ACA in 2025. This person pays ~$700/month for an Anthem Gold plan comparable to a plan that would have cost ~$2,400/month via the previous employer's retirement offering. This friend's MAGI is higher than ours. Obviously, you'll need to run your numbers to figure out what value you may (or may not) be able to get from the ACA given your MAGI.

You may be wondering:
  • How do we  control our income so precisely?
    We lower our income by spending non-retirement assets and raise it with Roth conversions.
  • What happens if actual income doesn't match income projections?
    When this happens, you have to "true up" at tax time (and re-pay at least some "Advanced Premium Tax Credits"). One year we did have to pay back a fair amount. Thankfully, we'd set the savings aside.
  • What if I have a catastrophic health event? Will the insurance hold up?
    For us, the answer has been yes. In fact, the benefits have greatly exceeded our expectations.

The benefits we receive via the ACA still feel too good to be true and the system causes us varied amounts of angst each year during the open enrollment period. Some years this angst is even significant, but the savings seem worth it. If you want more info, see the comments below, and/or feel free to contact us. We're happy to share what we've learned.

Update added Jun 9, 2025: There is talk that the "One Big Beautiful Bill" could change these benefits in the future.

-- Kathy

P.S.  THANK YOU to the friend who casually asked, "Have you looked into the ACA?" back in 2019 when I was lamenting the high cost of healthcare insurance which we were purchasing through our previous employers' retirement offerings. The story she shared seemed unbelievable, but she was credible so we followed up, and now that we've been using it for five years, we're convinced it's real :) 
12 Comments

More Financially Capable Than You Think?

12/27/2020

1 Comment

 
Picture
Nobody understands our goals better than we do
When I was in my early 30s, I commented to a co-worker that my husband and I were planning to meet with a financial planner. The co-worker was a little younger than we were and said something like, "Just remember that you're smarter than the financial planner." My intelligence isn't something people comment about much, so the comment caught me off-guard. I went home and repeated it to my husband. 

Since then (25 years ago) I've met some pretty smart financial planners, but my co-worker's comment launched a string of events that resulted in my husband and I continuing to manage our own finances and investments. Nothing we do is terribly sophisticated, but nobody understands our goals better than we do, and nobody understands our finances and investment choices better than we do. And, at least so far, it seems to be working well for us.

-- Kathy

Related reading:
  • Easier Than You May Think
  • Gather Input Then Decide for Yourself
  • Benefits of Low Cost Investing
1 Comment

Benefits of Low Cost Investing

12/19/2020

0 Comments

 
Picture
They add up
Disclaimer: I am not a financial advisor. The purpose of this post is simply to encourage others who want to learn more about managing their own investments.

Previously, I suggested that more people should consider managing their own investments because it is Easier Than You May Think, and it's like having a very part-time job with a very high compensation rate. If you're considering doing this, you'll want to find an investment approach that aligns with your financial goals. My goal is to be sure that my wife and I have enough money to support our comfortable lifestyle now that we're retired. 

This post compares two investing approaches. Some might consider these summaries over-simplified, and they probably are, but they'll provide a good foundation for readers who want to get started. The info isn't meant for people who've been managing their own investments for years, although I'd love to hear their input.

Vocabulary
  • Stock: Ownership of a fraction of a corporation
  • Mutual Fund: Collection of stocks from many companies; often focused on a specific market segment or industry. e.g. Emerging software, specialized biotech, or telecommunications. 
    Note: For simplicity, I use the term "mutual funds" below to refer to both mutual funds and Exchange Traded Funds (ETFs). You'll learn the distinction between the two as your knowledge grows.

Approach 1: Traditional Investing
Traditional investing involves purchasing individual stocks and/or mutual funds based on various quantitative and qualitative considereations. Typical quantitative considerations include revenue growth, earnings, and current stock price. Qualitative considerations can include things like industry trends, market dynamics, and even cultural shifts. You'll want to ask yourself questions like, "Are people drinking fewer soft drinks as they become more health conscious?", "Are brick-and-mortar stores disappearing as people do more online shopping?" and "Are others likely to copy the Uber model and apply it to different consumer services?" Then you'll want to identify companies that are likely to succeed. "Success" will probably be defined differently by each company. It could involve profitability, growth, innovation as well as other things. In the end, you'll want to purchase stocks that the market thinks will do "well" (since the market determines the price of the stock).

The benefit of this approach is that there is potential for large gains ... if you buy the right stocks and/or mutual funds.

The risk associated with this approach is that there is potential for large losses if you pick the wrong stocks and/or mutual funds. 

Some people don't like the potential volatility and risks associated with owning individual stocks because the possibility of large gains is coupled with the risk of large losses. To reduce the possibility of extreme outcomes, some invest, at least partially, in mutual funds. Just like stock, you'll want to do some research before selecting mutual funds. You'll want to ask yourself (and research answers to) questions like: "Do I think software is poised for a big gain?" and "Since electric vehicles seem hot, should I find a mutual fund that focuses on those?" You'll also want to ask yourself: "Is this particular fund being managed by someone with a good track record?" and "Is the fund efficiently managed?"

In Summary
Traditional investing delivers the possibility of large gains (e.g. Tesla has risen 7,000% in 2020 as of today). It also requires:
  1. Considerable research (i.e. your time)
  2. Good luck (i.e. many factors that cause a company to succeed or fail are difficult to accurately predict; think COVID-19 and 9/11)
  3. An ability to handle large losses (e.g. SolarWinds, the company at the center of a recent US Government computer breach, has seen their stock drop 40% in just one week)

Approach 2: Low Cost Investing
Low cost investors focus on purchasing mutual funds instead of individual stocks, and they specifically look for mutual funds with low fees and operating expenses. (Since mutual funds require specialists to create and manage them, there are management/operating costs and fees associated with them.) Low cost funds are set up to run with very little management by humans. This is achieved by creating funds whose components mirror common market indices such as the S&P 500 and Nasdaq (thus the term "Index Funds").

The benefit of low cost investing is that it usually delivers consistent, moderate returns over long periods of time. And those returns add up.

The downside of this approach is that big increases in value in specific companies or even market sectors rarely result in dramatic gains to an indexed fund.

In summary
Low cost investing is most likely to produce steady, moderate gains instead of rapid value fluctuations. It's less exciting when the market rises quickly and less scary when the market drops quickly.

Which Style Is Right For You?
Some people prefer traditional investing because it's easy to understand and/or they enjoy the "thrill" associated with it. Personally, I'm not a fan for the following reasons:
  1. High cost mutual funds require higher returns before they become a good investment. i.e. The fund needs to return enough to provide you with a profit and cover the fund's expenses.  Many believe that active (i.e. expensive) management is required in order for a fund perform better than the market average, but research and history show that actively managed funds rarely outperform the market consistently.
  2. There is more stress watching a portfolio of stocks and high cost mutual funds because it's likely to experience larger swings in value than a portfolio comprised of index mutual funds.
  3. Good luck is often required for success. Good decisions are easy to make in hindsight, but a lot harder to make in the moment. People who purchase stocks and funds that increase drastically do a lot more talking than people whose decisions don't pay off or even end up costing them.  For example: Solar energy is pretty hot. It's growing quickly and seems like a slam dunk ... unless you invested in First Solar, which has lost 60% in the last 11 years.

The "father" of low cost investing is the late John ("Jack") Bogle, the founder of Vanguard.  Bogle's philosophy for investing and building wealth includes investing in low cost funds, investing early and often, and keeping investments simple, among other behaviors.  Information about the Bogleheads® investment philosophy makes for interesting and valuable reading.

Low cost investing methodologies are unlikely to enable you to tell dramatic financial stories at cocktail parties. (e.g. You won't be able to talk about buying Tesla at $14/share now that it's at $695/share.) But Low cost Investing may mean you no longer need to work when you're 70. (And it may prevent you from needing to lament, "I was absolutely positive Enron was my ticket to early retirement.")

-- Jim

Related reading: 
  •  Easier Than You May Think
0 Comments

Gather Input Then Decide For Yourself

12/16/2020

1 Comment

 
Picture
If you're managing your own investments, seek input from others, but don't necessarily follow it
My wife and I manage our own investments. As mentioned previously, It's Easier Than You May Think. There is a wealth of information online, and while we don't think it's worth it to pay someone else to manage our money, that doesn't mean we never ask for advice.

Finding valuable financial advice isn't hard. Big investment houses (like Fidelity and Vanguard) have knoweldgeable employees who are willing to talk with you and provide advice that aligns with your goals. In fact, this can be a key benefit of consolidating your investments in one place: The larger the value of your assets with them, the more services they provide (and usually at no additional charge). You can also hire fee-only investment advisors; people you pay for their time and expertise, just like you'd pay any other professional such as an attorney or doctor. Fee-only advisors provide guidance based on your age, goals, assets, risk tolerance, and other factors. Online resources, books, podcasts, and friends can also provide useful advice, or at the very least, ideas.

It's critical that you take all the information you gather and then decide if it's right for you. Just because a professional suggests a plan, it doesn't necessarily mean it will help you accomplish your goals. Over the years, my wife and I have received some great advice, and we've also received advice that left us wondering if the advisor had heard anything we'd said or maybe our communication skills were lacking. For example ...

When our kids were very young (and before we'd decided to manage our own investments) we visited a traditional investment advisor who was highly recommended by a friend. We had some savings and we were participating in our employer's retirement plans. The advisor asked us about our current financial situation and then said, "You're saving too much. Lighten up. Find some ways to spend more money." As we were driving home, my wife reflected, "He gave us that advice without asking about our goals and concerns. He didn't even ask if we were satisfied with our lives right now." Our first meeting with this advisor was also our last.

On the other side of the coin, a Fidelity advisor was looking over our portfolio and said, "You've chosen some bond funds that aren't going to behave very well if interest rates change."  He walked me through the steps to find an important piece of information about each fund. Then he described what this information meant and why it was important. I ended up making a number of changes to our portfolio based on that input. He helped us eliminate thousands of dollars of risk I'd unwittingly baked into our portfolio. It was very valuable input!

This past summer, with COVID-19 in full swing and a Presidential election on the horizon, my wife and I had been discussing the state of the economy and how much money we wanted to have in cash in case the market took a big dive. Although we both had concerns about the market, my wife was advocating for a larger cash position than I was and larger than what was recommended in most scenario recommendations.  After speaking with an advisor at a major investment firm, I confidently announced, "We have nothing to worry about. We have a bit more cash than the advisor recommends. We don't need to change anything." As I finished the thought, she was already saying "Whoa whoa, whoa!  We need to talk about this." And talk we did. For hours and hours; about six as I recall.

We discussed goals, a recognition that we both place a high priority on being able to sleep at night, and that our first objective was security, not maximizing returns. This led to a bit more online research and a conversation with respected neighbors (who stood > 6 feet away). In the end we increased our cash position ... by quite a bit. From the investment advisor's perspective, this was the wrong thing to do. But there was no question in our minds It absolutely was the right thing to do ... for us.

If you're managing your own investments, seek input from others, but don't necessarily follow it until you're sure it's right for you. When you combine what you know, what you learn, and what makes sense for you, it's an unbeatable combination, and you're most likely to achieve your goals.

-- Jim

Related reading:
  • Easier Than You May Think
1 Comment

Easier Than You May Think

12/9/2020

0 Comments

 
Picture
​Managing your own investments pays off for many
When something needs to get done do you tend to do it yourself or pay a professional to do it for you?  House needs a new roof?  I'm calling a roofer.  A room needs painting?  I'm off to research local painters.  And although changing the oil in my car is not very difficult, I take it to the local shop.  Other things, however, I refuse to hire out.  I enjoy cutting the grass.  And last summer I replaced the (regular sized) door that goes from our garage to the back yard.

What about your investments? Do you manage your investments  yourself or do you have someone do it for you? Many people we know hire someone to manage their long term investments.  It doesn't sound all that expensive.  Management and trading fees generally run about 1.65% of total assets being managed.  That sure doesn't sound like very much ... until you do the math to calculate the costs.  Wouldn't it be nice if you could eliminate that annual expense?  You probably can.  

Managing your own investments is easier than many people think. Yes, it requires some "startup" time. Yes, some basic knowledge needs to be acquired. You may even have investments spread across multiple institutions which may be easier to manage from a single institution.  (Consolidating at one financial institution can provide benefits not available when assets are in different places.) Getting things set up also doesn't always mean doing everything by yourself. Talking to a fee-based investment advisor can be very helpful. In this scenario you're paying a professional for advice based on your goals but implementation is done by you. (It's like hiring an architect for design but construction is done by the homeowner.) Investing companies such as Fidelity offer services like this as well. Once some foundational concepts are understood and established, ongoing management takes surprisingly little effort.  

Where can you get started?
  • Vanguard
  • Fidelity
  • Charles Schwab
  • TD Ameritrade
  • bogleheads.org

Managing your own investments isn't for everyone ... just like painting a room isn't for everyone and changing the oil isn't for everyone.  However, if you are currently paying someone to manage your money, I encourage you to be sure you know exactly what it is costing you.  You might discover you just uncovered a simple part-time job that pays really well.

​-- Jim
0 Comments

    INFO

    we've gathered

    Archives

    March 2025
    February 2025
    January 2025
    May 2021
    December 2020

    Categories

    All
    Activities
    Contributing
    Finances
    Investments
    Travel

    RSS Feed

Retirement Realities

Copyright © 2025  |  Colorado, USA  


Photos from ell brown, mikecohen1872, Got Credit, joncutrer, perzonseo, EpicTop10.com, scootergenius02
  • Home
  • Topics
    • All Posts
    • Submit
  • About
  • Contact