Here at Pocket Change Lifestyle, we’re all about DIY-ing things. From house projects to budgeting to investments, we believe in making a reasonable effort to do things ourselves. Here are fives reasons why we believe you should handle your investments yourself:
- Responsibility – Taking your investments into your own hands will help you be more responsible, which has almost no downside. By learning and understanding how to manage your investments, this discipline will likely pour into other areas of your life.
- Knowledge – The adage, “knowledge is power” is entirely true. No one will say, “Stop learning, it’s not good for you.” The more knowledge you gain about investing, the more power and control you will get. Decision making will be based in facts and research instead of fear.
- Ease – It’s really not that hard to understand investing basics. Yes, like anything else in life, it takes some time commitment. But, the reward and hard work can pay off greatly over time as you begin to manage your own portfolio.
- Cheaper – Let’s face it, paying for services is a part of life. When it comes to researching investments, it’s all out there just waiting to be researched. We will most often opt for the cheapest option, and in this case for us, managing our investments is our cheapest option.
As we have mentioned before and will continue to recommend, the book “The Simple Path to Wealth” has greatly influenced us on our path to Financial Independence. In the book, JL Collins discusses why VTSAX is his ‘go-to’ fund. If you haven’t read or listened to this book, you must! He also makes a strong argument about why you and I should be learning about our investments and handling them ourselves.
But, there are cases when there are cheap/affordable options available if you need to work with one. As pointed out by a friend from our last investing post, a fee-only adviser is a good example. If you learn about investing and take that challenge on, you’ll still save some money and essentially pay yourself!
NOTE: Here’s a quick article about fee-only planners over at Nerd Wallet for further reading.
- Fun – Yes, investing can be fun! With the large number of stocks out there, you can invest in companies you believe in, like Apple or Disney. Part of the fun of investing is watching your portfolio grow. Sure, a savings account earning 1.9% from Ally sounds great, but when you (according to past performance) might conservatively earn 5-7% in an investment… why not?
In addition to our ‘normal’ portfolio, we also have a few ‘play stocks’ that we’ve invested in, and it’s fun to see the growth in those areas.
SIDE NOTE: While we truly believe you can handle investing yourself, life isn’t the same for everyone. Our journey thus far towards financial independence has been slow, steady, and non-eventful.
There are definitely times when a financial planner or adviser would be helpful- especially if you happen across a large windfall or inheritance, or you really prefer to have someone else manage your portfolio. No judgement here! Do what works best for you!