We haven’t had a Tales from the Wallet in too long — today, let’s talk about what kind of investments you prefer, how you research and buy them, and general investing theory and resources. Specific questions for today: How comfortable are you investing your money (beginner, expert, or somewhere in the middle)? Do you invest your own money, or leave it to your partner or a trusted family member (like a parent) or a financial planner? If you invest it yourself, do you invest in stocks or index funds — or something else like roboinvestors like Betterment or Ellevest? Another fun question: When and how did you start investing?
For my $.02, I consider myself pretty comfortable with investing, and I do all of it for my family. (Every so often I give my husband a “state of the union” to discuss how everything is going.) I find Schwab and Vanguard both pretty easy to use as far as interface goes for buying and selling, and for ease of use I’ve mostly consolidated all our accounts to those two brokers. (This also makes it easier to see your asset allocation.) When I was younger, though, I definitely took a lot of advice from my father for investing, to the extent that he and I had a lot of the same mutual funds when I got started investing after college; he was much more focused on the market than I was and if he told me to sell I almost always did. I still value his advice and guidance for big moves.
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In terms of what I invest in, I vastly prefer index funds for most investing, and Vanguard’s low fee index funds like VTSMX (with even lower fees if you’re investing enough money to get to “Admiral Shares,” which even makes for a nice little target). Still, every so often I dabble with buying individual stocks, and I’ve been very lucky with the individual stocks that I’ve bought, so I probably have a rose-colored view of investing in general.
As I mentioned above, when I got started investing in my early 20s I bought a few mutual funds, with mixed results (particularly considering the big stock bubble of the late ’90s happened just as I was getting started). I also have a bit of money invested in some of Vanguard’s “Target Retirement” funds, which supposedly reallocate money as you get closer to your target retirement date so your risk/exposure decreases as you get closer to needing the money; you can also obviously rebalance your investments yourself, although it can be a PITA.
I try whenever possible to automatically invest some small amount on a monthly basis; in some years it’s been as small as $25 a week. I also use Acorns for super small “set it and forget it” investing, which can be a great place to start if you really think you have NO money to invest. I’ve been intrigued by socially responsible investing but haven’t researched it a ton — the idea being that you can buy funds where managers ONLY invest in companies that aren’t, for example, polluting, using sweatshops, and other things.
I have bought bond index funds over the years, and still hold some, but I feel like I’m woefully uninformed on bonds, bond ladders, and bond index funds — it’s on my to do list to research more when I get a second.
(A great “getting started investing” story from a friend of mine: For her 10th birthday, her father gave her a copy of Peter Lynch’s book (affiliate link) and a “loan” of $2,000 to invest, with the promise that she had the rest of her life to pay him back. She bought a lot of what she knew as a 10-year-old — Gap, Nintendo, and so forth — and made a killing. I got my start with a similar amount as a college graduation gift…)
Over to you, readers: When did YOU get started investing? Do you invest in stocks or index funds (or other)? For those of you in company 401K plans with limited investment options, how do you research your options (and how often do you reassess)?
(If you’re more on the beginner side of things, do check out our money roadmap for a general checklist for your personal finance journey — as well as our recent post on the best financial books for beginners.)
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