Valuable Money Advice Dad Gave Me
Dad and I are as different as two people can be when one has shaped the experience and personality of the other for 18 years: he’s a Midwestern lawyer who lives for football in Michigan, and I’m a know-it-all from the East Coast. a transplant that is proud of being a U of M graduate but loves to run after the tail more than a real game.
Aside from these very important differences, we have one thing in common: we are happy to talk about the intricacies of our personal finances (invite us to your next party). My dad loves to read annual investment reports and send me Wall Street Journal clippings , and I understand that he enjoys reading my posts for fun, not parenting.
It was in this spirit that I emailed him a 401 (k) fast fact sheet for my Fidelity account. I am quite happy with my current toolkit, but thought he would like the plan options. He responded with a few ideas of his own, delighted with some of the funds that he also invested in, and ended his post with what I find agreeable:
Invest as much as you can afford per salary, focus on doing your best, and check your retirement account at the end of the year.
I like it not because it’s groundbreaking advice, but because it’s the exact opposite – often we are passionate about maximizing what we can and looking for ways to beat the market (and each other) that we forget that many things in personal finance are very simple. … You have to save and invest as much as possible, but beyond that, many things are beyond your control. Focus on what you can influence so you can make more money and enjoy life.
When it comes to what to invest in, the boring answer is usually the right one – inexpensive index funds and ETFs. I have about 40 years before “retirement age,” so I’m almost all in stocks, with a range of large, mid- and small-cap companies, as well as some foreign stocks. For more details on asset allocation, check out this post .
None of this means that you shouldn’t read about your foundation’s performance and calibrate it if necessary – knowledge is power. But sometimes we need an old-fashioned reminder for dads to not get carried away with the details so much that we forget the basics.