What is your investment strategy?


Get Rich Slowly conducted an online survey of about 2,000 randomly selected individuals on the subject of investing recently, and I found the insights from the results quite interesting. Some of the highlights of the findings of the survey are:

1. Over 40 percent of all respondents do not invest at all at the present moment.

2. Despite investing being more advantageous to the young, the highest proportion of respondents not investing were also the youngest.

3. Using index funds is not a primary investing strategy by any age group.

4. The older people get, the more active they become in their investments.

Investing strategy

The first question on the survey was: What best describes your investment strategy? Six possible answers were provided for respondents to choose from:

  1. I create parameters for my adviser based on my own research.
  2. I don't invest right now.
  3. I let others invest for me.
  4. I pick index funds to get an average return.
  5. I review my allocations quarterly.
  6. My investments require active supervision.

By a large margin, most respondents selected option number two, i.e., “I don't invest right now.”

q71.1b

This result is in line with numerous reports which have documented in many ways how Americans are under-investing for their retirement, some even stating that up to 60 percent of Americans don't have either mutual funds or exchange-traded funds (ETFs).

The general lack of investing activity could turn out to be a time bomb when those folks want to but find they are unable to retire. It would be bad enough if, say, two out of every ten people were unable to support themselves as they grow older, but the results of this survey suggest the magnitude of the problem could be much greater than that, with almost half the respondents reporting that they are not investing at all.

No index funds?

Another surprising result is that index funds, regarded by many as the safest and most profitable long-term investment strategy, is not the most-followed investment strategy. It is not even the second-most popular. This is true across all age groups. Only 20 percent of those respondents who actually do invest use index funds as their primary investment strategy.

The most popular strategy, in contrast, was “I let others invest for me.” Given overall investing industry data, that shouldn't be surprising: The Investment Company Institute reports that about 80 percent of assets invested in mutual funds are invested in managed funds, not index funds.

Why aren't index funds used by more people? The reasons were not probed by the survey, but a possible explanation is that individuals who do invest do so through their employers' 401(k) and similar retirement plans. Those plans tend to be managed by outside investment firms who encourage participants to invest in the stock market through their captive managed mutual funds by various means, but most 401(k) plans don't even offer index funds as an option, or, when they do, they give those funds no prominence because the fees those plans generate are far lower than the fees they get from their managed funds.

Investing strategy by age

The survey didn't explicitly ask each respondent to state their age, but it is possible to guess their approximate age from their response to this question: How many recessions have you survived? The number of recessions survived can be considered a proxy for age because nothing influences the answer other than age.

In the chart below, the survey's responses reveal how the investment strategies of respondents correlate with their ages:

q71.3b

The first, and most glaring, conclusion from the long red bar in the chart above is that the youngest among the respondents overwhelmingly do not invest. Given that the last recession has been officially over for not much more than five years, that would place the group who haven't survived a single recession yet in their mid-twenties or younger.

It is easy to take the glass-half-empty view, i.e., that young people don't see investing as a way to make money at this point in their lives. However, there is another view, a more encouraging one — almost 30 percent of young people, i.e., those earning the lowest wages of their careers, have taken responsibility for their futures and do see investing as a viable way to prepare for their later years.

Either way, this is the group which stands to gain the most by getting an early start with their investing. Getting them to engage in any form of investing at all — even if it were only to hold funds in certificates of deposit — would benefit them. If history is to repeat, more people from the younger cohort can be expected to start, or increase, their investing. However, that is by no means a certainty.

In order to get a better grasp of investing strategies, as compared with respondents' ages, it is possible to group the investing strategies into the following three categories:

  • Passive (I let others invest for me)
  • Semi-passive (index funds)
  • Active (all other strategies)

q71.3d

There seems to be a clear relationship between age and the degree of active involvement in investing. To test this, it is possible to construct a somewhat crude index of active involvement in investing strategy out of our results, by assigning a numeric value to the degree of passivity/activity in investing, as follows:

  • 1 = Passive (I let others invest for me)
  • 2 = Semi-passive (index funds)
  • 3 = Active (all other strategies)

Using those numbers, it is possible to create an “index of active involvement.” A value of 1 would signify a completely passive approach to investing, and a maximum value of 100 would apply to investors with no passive elements in their strategy.

Using that definition, the following chart highlights the correlation between age and active involvement in respondents' investing habits:

q71.3f

The survey didn't explore the reasons why younger people tend to prefer a more passive approach, but a few potential reasons could be:

1. Older people have gained more knowledge and experience in their lifetimes, which would give them the confidence needed to take a more active role in their investing.

2. Younger people are earlier in their earnings cycle and the amount they have invested doesn't justify the expense of employing a paid financial adviser.

3. Younger people's investments tend to be dominated by employment-related retirement funds, which lend themselves to simple and passive investing strategies. Often, older people have acquired other monies, such as inheritances, settlements, proceeds from the sale of homes, and other sums which exceed the statutory limits for retirement funds. Consequently, they may feel the need to take a more active role in their investments.

That said, it is significant to observe that around 15 percent of the oldest group, i.e., those who have survived the 1987 stock market crash, do not invest at all. These are people who have been in the workforce for more than 25 years, which would put them in their 40s or 50s today. Those tend to be peak earning years, and one would think that the urgency of the approaching years and higher incomes would lead almost everyone in that age bracket to be investing. That, however, is not the case.

The survey didn't probe the reasons the older group chooses not to invest, but it could be due to people depleting their retirement accounts because of illness, job loss, child-related emergencies or other misfortunes. Whatever the reasons, the fact that around 15 percent of those soon to retire have no investments has to be of concern.

In summary

Consistent with what other surveys show, more than 40 percent of all respondents reported that they don't invest at all. This was most pronounced in the youngest age group, but not insignificant in the oldest age group.

Among those who invest, the most popular strategy is purely passive, i.e., letting others do their investing for them.

A noteworthy observation is that, across all age groups, index fund investing is nowhere near the most popular strategy.

An interesting observation is that, as people get older, they tend to move away from passive to more active investing strategies.

How would you answer our survey questions? What needs to change to help more people start investing?

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Beth
Beth
5 years ago

Interesting, but I’m skeptical about what isn’t being asked or talked about here. For example, I’m surprised this survey didn’t ask about home ownership. Maybe I’ve been reading too much Garth Turner lately, but in Canada it seems a lot of people have a huge chunk of their net worth wrapped up a single asset: their homes. (Not to mention rental properties). That’s a problem because our housing bubble hasn’t burst yet. Also surprised that this post doesn’t consider that young people often have little or nothing to invest compared to older generations. Some are saddled with massive student debt… Read more »

Doug
Doug
5 years ago
Reply to  Beth

Young-ish person here. I agree that the most obvious conclusion about why young people don’t invest seems to have been omitted: A lot of us don’t have any extra money! Investing requires a certain amount of initial financial security. You have to have enough money that you don’t need it all right now. A couple of years back, my car started to leak oil on the ground. After getting an estimate for the repair cost, I thought “Well, I guess I’d better buy some cardboard that I can put under the car to absorb the oil.” I did this for… Read more »

Nick @ Millionaires Giving Money
Nick @ Millionaires Giving Money
5 years ago
Reply to  Doug

A lot of young people that I hang around always say that they cannot afford to invest however when I see them buying expensive items to fund their lifestyle I sometimes think that it may not be the case. I think everyone, even youngsters can pay themselves 10% first and then spend the remainder. I myself have saved 10% throughout my early years and now the compounding effect is really showing. I do think it’s possible and requires a major paradigm shift as well as a time and money revolution. Great insights and fantastic post.

Debi
Debi
5 years ago

I have always been a saver as well. I think one reason young people with little to save don’t do so because they think “$10 a week is not going to add up to anything.” They don’t have the patience to wait for the compounding factor to kick in. Perhaps it’s not PC to give advice to my subordinates at work but I encourage them to put money into their 401k and tell them to be patient, that it takes about 15 years to really see what saving early will do for them.

Jacque
Jacque
5 years ago
Reply to  Beth

I’m also pretty skeptical and “young-ish” (late 20s). I know I tend to bristle at the negative stereotypes about my generation, but this data is a bit of a stretch given that actual age isn’t even being reported. The snarky side of me wants to say that maybe the strong correlation between people who don’t invest and people who report not having survived a recession is due more to ignorance of what is going on in the bigger world around them and not to age. Personally, while I did start investing in my work 401k once I was eligible to… Read more »

Curtis@PayOffMyRentals
5 years ago

Investing is not “Rocket Surgery”. (I love that quote). Warren Buffett is quoted as saying: “Success in investing doesn’t correlate with I.Q. once you’re above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing”. A little knowledge with a fair amount of temperament will make you a successful investor. A dividend growth portfolio is well within the reach of all would-be investors. You just don’t need to pay the expenses of a mutual fund or hire an advisor to do your investing… Read more »

Catherine Jean Rose
Catherine Jean Rose
5 years ago

VDADX (Vanguard Dividend Fund) I buy the Admiral Shares for the low expense ratio. Minimum investment is $10,000. If you can’t or don’t want to front that much then the Vanguard (VYM) high yield dividend ETF is a good one also. I own shares of that in my Roth.

Brett
Brett
5 years ago

Nice article. Can’t believe the lack of awareness of ETFs and importance of management fees in investing and your data bears that out. As far as the difference in active versus passive investing across age groups, the difference to me is related directly to retirement. Early on most of the income that influences your day-to-day life is from your salary and will be for the foreseeable future. As we age, we peak with income growth and possibly have decline, and we see a future where full time employment income does not make up most (or any) of our spending needs.… Read more »

Matt
Matt
5 years ago

Where is the “I pick index funds to beat actively managed investments” option? One of the basics of conducting polls is to make the questions neutral.

Bob Schulz
Bob Schulz
5 years ago

Regarding your question about what needs to change to get more people investing, I believe it is financial education. It should be a required course in your senior year in high school and again in college. If you don’t grow up in a home that talks about the importance of saving, you don’t have much of a chance of figuring this out on your own without education. This is going to play itself out for the baby-boomer generation who have not saved for their retirement, and will not be able to continue the standard of living they had when they… Read more »

Ray
Ray
5 years ago

Nice article overall. I do have a nit to pick, well more of a question: when analyzing the results, did you give any thought to the fact that some people are going to answer the recession question incorrectly? I also imagine that someone who is investing is more likely to answer that question incorrectly. This would affect your use of the recession question as an age proxy (why wasn’t age simply included in the survey if that was important)? Given that I thought of this in five minutes and you and your team obviously put more thought into this you… Read more »

Johanna
Johanna
5 years ago

Several of those options aren’t mutually exclusive. I invest in index funds, but I also review my allocations quarterly, because different index funds cover different segments of the market.

getagrip
getagrip
5 years ago

I find the questions too subjective to draw serious conclusions. I utilize index funds but check my statements quarterly and I could determine that my quarterly checking meets the criteria of requiring active supervision. I could easily have answered this “survey” three different ways depending on what was uppermost on my mind that day.

Keith
Keith
5 years ago

I think the survey design is at least partly resonsible for some of the surprising results.

The question about primary investing strategy suggests mutual exclusivity among the choices.

But I invest primarily in index funds AND review my asset allocations quarterly. These are not really different or opposing strategies, just good practice.

I am sure some respondents were confused. Whether you invest in index funds or actively managed funds, shouldn’t everyone periodically review and tebalance their asset allocation?

Old Guy
Old Guy
5 years ago

When I was young, I invested in the 401k and picked my options with the intelligence of a bag of hammers. It wasn’t until I was almost 40 that I even read my first book on finances. I soon found out that the only person I could trust was me, because 1) most friends had little or no financial intelligence, 2) profit motive tainted the advice given by “professionals”, and 3) my extensive reading gave me far more information it seemed than the professionals, as I would ask basic questions I knew the answer to but they oddly did not.… Read more »

Steve K
Steve K
5 years ago
Reply to  Old Guy

Old Guy — I could have written your post except 1) I’m not that articulate, 2) I don’t have any rental property, and 3) my net worth isn’t written with seven figures (but close enough, and high enough that we’re not eating cat food). My experience with investing is that it hasn’t made me a lot of money. Fortunately, being conservative by nature, it hasn’t lost me a lot of money either. What investing has done is forced me to steadily put money into accounts that I otherwise would have pissed away. When I look at my balance, I’d guess… Read more »

jim
jim
5 years ago
Reply to  Steve K

Old Guy and Steve,
THANK YOU! I’ve sent this on and high-lighted your guys’ comments to my young-uns!

Sherry
Sherry
5 years ago

The last question, “what needs to change to help more people” brings to mind an article I saw just today, highlighting things everyone should have mastered by the time they’re 30. Things like making your own signature cocktail, hanging a picture and taking a day off from work having called in sick…really? Nowhere in the article did it say, “learn to prioritize how you use money, learn how and regularly balance a checkbook, learn to live on a budget, or learn the difference between savings and investments.” I think somewhere along the line we need to make basic personal finance… Read more »

Tina
Tina
5 years ago
Reply to  Sherry

I totally agree with you! Having 2 teenagers, I have had to teach them myself how to balance their bank accounts, saving, investing and budgeting. I opened stock market accounts for my children at a young age and bought stock for them in companies they were interested in like Disney, Sony, etc. Now that they are teens, they tell me which stocks they want to purchse with their own money and I buy it for them. I also have college savings plans for them. I will warn you now that I am a little obsessive about their finances because I… Read more »

Sherry
Sherry
5 years ago
Reply to  Tina

Bravo, Tina.

Beth
Beth
5 years ago
Reply to  Tina

“I have had to teach them myself how to balance their bank accounts, saving, investing and budgeting.”

The former teacher in me wants to reply that it’s not up to schools to raise people’s kids, but what you’re doing is amazing and so few students have that kind of expertise at home.

IMHO, financial education should teach the parents and the students together.

Margaret
Margaret
5 years ago
Reply to  Tina

I also taught my sons from an early age about money. Saving, spending, interest (employees), needs vs, wants, borrowing (the down side of interest), etc. It was not always easy and it was not always perfect. The thing is that it worked. I withdrew cash every payday and we put it in envelopes for use on specific categories (school clothes, Christmas, auto needs and so on). They could see some of the choices that we were making and how to plan for future spending and saving, and how saving for tomorrow affected the spending we could do today. They learned… Read more »

Hoping to Adopt
Hoping to Adopt
5 years ago

I would have a tough time answering those questions the way they are worded. For example, many young people may view their retirement accounts as savings, not as “investing.” For number 1, I choose to have my retirement funds in a target retirement fund. Does that mean I am letting others invest for me, or did I choose index funds? I also review my allocations quarterly, but I don’t change them.

Hoping to Adopt
Hoping to Adopt
5 years ago

Also, for #2 “How many recessions have you survived?” My first instinct would be to answer “1”, as I graduated from college in 2004. But, in my lifetime, there have been a couple more that I wasn’t really aware of because I was too young. Also, “survived” is a arbitrary term. If someone went through forclosure, lost a business, filed bankruptcy and is living in a homeless shelter, would you say that they “survived the recession” because they are still breathing?

JoeM
JoeM
5 years ago

A few years ago at 23 or 24 working just out of college, I simply asked a friend who works in wealth management for a big bank in NY where to start. She said dump it in a Vanguard 2050 Retirement account and that’s all I’ve done to date, pretty much.

I don’t make enough to max it out, but I put in $2-4k a year. I’ve thought about adding different funds from Vanguard to the mix, but for now, it does well for me.

Ely
Ely
5 years ago
Reply to  JoeM

This is a good choice. Vanguard’s fees are low in any case and their Retirement funds are made up of index funds. I’m in 2040 myself. 🙂

I sure wouldn’t know how to answer the listed questions. How many recessions? What counts? I invest in index funds, but I pay attention, but I don’t ever change anything – is that active or passive? Anyway, not sure how informative all this is, but definitely a good thing to be thinking about.

Laura
Laura
5 years ago

For the question, “What needs to change to help more people start investing?” it’s finding out WHY. I can’t speak for everyone, only for myself. For the records, I’m 52 and have survived 4 recessions as an adult (early 1980’s, around 1991, around 2001, and the Great Recession). My non-investing life: In my 20’s: I’m on my own and have no clue how to handle money; no adult ever taught me, other than watching my mother’s (poor) example. All I know about it is that I earn $X each pay period and have to pay for $Y expenses, like rent,… Read more »

Laura
Laura
5 years ago
Reply to  Laura

Sorry, a clarification: when I said “WHY” I meant, why people, esp. young people don’t invest so as to find out what could be done to get them to invest. Which was supposed to be the point of my post, oh well.

William @ Drop Dead Money
William @ Drop Dead Money
5 years ago
Reply to  Laura

Wow – how well you’ve articulated the journey so many people take! Thanks for sharing.

Catherine Jean Rose
Catherine Jean Rose
5 years ago
Reply to  Laura

You’ve listed decades of excuses and ignorance as your rationale for not saving. What you didn’t tell us is how many new cars you purchased in your 30’s and 40’s? What kind of phone do you own? Monthly cell plan? Cable package? Shopping habits? Starbucks? These things add up. 3% cost of living increase — EVERY year? I received EXACTLY $1000 in salary increase over the last FOUR YEARS…and yet my retirement contributions increased from $800/month to $1450/month in 2014. Life is about choices. The only conclusion I can draw from your post is that you’re falling prey to lifestyle… Read more »

Jerome
Jerome
5 years ago

My thoughts exactly!!! Stop finding arguments why you did not save. Use your creative energy instead on finding ways to save money, save as much as you can and than at least double it.

Brian @ Debt Discipline
Brian @ Debt Discipline
5 years ago

When I saw that 40% are not current investing, I wanted to know what their age group was. Based on this data, seems like we still have a lot of improvement in our financial education of young adults.

Emily @ Simple Cheap Mom
Emily @ Simple Cheap Mom
5 years ago

Wow, some of those numbers are pretty shocking. 40% not investing at all? Wow!

I think giving more financial education in schools would help the younger generation start saving and keep saving. Obviously the yougnest generation is also seeing student debts at levels we haven’t seen before, is it’s a challenge.

Zambian Lady
Zambian Lady
5 years ago

I agree that youngsters should be taught early not only about general personal finance, but investing strategies so that they know what to do when they start earning their own money.

Cole
Cole
5 years ago

Others have pointed out the problems with this survey’s language which cast doubt on the validity and reliability of its results. For example, the answers are not mutually exclusive, but are treated as such. Also, “how many recessions have you survived” is not as accurate an indicator of age as “how old are you” – mapping people’s ages onto recession dates after-the-fact as a piece of analysis would have been more accurate. (Also, for those of us who only remember the Great Recession, listing numbers of recessions doesn’t give us an idea of the age brackets you’re working with.) I… Read more »

jim
jim
5 years ago
Reply to  Cole

How do your parents contribute to a Roth IRA for you when you don’t have an earned income? I thought that was a prerequisite for a Roth.

Cole
Cole
5 years ago
Reply to  jim

I earn a little bit of side money during the year, largely through occasional lectures, teaching, or one-off acting or editing jobs. But it’s not nearly enough to live on (a few thousand dollars a year). I don’t have a regular full-time or part-time job, so I don’t have a regular income I can depend on for living expenses.

Whatever little I earn goes towards my living expenses, loans, or investments. My parents contribute the maximum amount possible to the Roth depending upon my earned income for that year, and then the additional contributions to my other investment account.

Carla
Carla
5 years ago

Laura’s post, #16 spoke to me though I’m several years younger. Growing up, no one talked about investing. I’m the last generation whose parents were able to live well, own modest homes, raise a family and retire working as a contractor or for the USPS (my parents literally didn’t but many in my community did). I didn’t invest early in my working life because I thought that’s what rich people did and I also believed Armageddon was right around the corner and coming any minute. “Judgement Day”, “New Order”, “Millions now living will never die – 1918”, and other taglines… Read more »

Tina
Tina
5 years ago
Reply to  Carla

I am sorry you have had so much heartache. Just remember, it is never too late to start saving and investing. Every dollar counts. In our 20s all I could manage to save was 40.00 and that was even hard at times.But it was our er fund and I refused to touch it until we absolutely needed to. One trick I did to build my 401k and our savings was each time I got a raise, I used 1% to increase 401k, 1% in savings and if I got a bigger raise, the rest would add into our monthly budget.… Read more »

Carla
Carla
5 years ago
Reply to  Tina

Thanks, Tina! I totally agree with you regarding one dollar at a time. That’s what we’re doing now and its working great; it just feel discouraging when you have so far to go.

Debi
Debi
5 years ago
Reply to  Tina

I did the same thing for years with my annual raises until I was finally able to max out my contributions 3 years ago. For many, many years my take home pay did not go up but the balance in my 401k is pretty impressive now. I’m sure glad that I’ve been fortunate to never have suffered a job loss (my DH has had 2 brief ones) and have been able to secure my future retirement years.

Vanessa
Vanessa
5 years ago
Reply to  Carla

Carla, You don’t have to answer, but just wondering if you were raised JW like I was. The terminology sounds eerily familiar. My mother didn’t think the world would last long enough for her kids to graduate high school. Yet we all did and now she’s about to have a grandchild to graduate. When you’re raised to believe that the world could end at any second you don’t learn about the value of an education, or how to make your money grow or anything about preparing for the future. I’m fast approaching 40 and the second half of my life… Read more »

Sam
Sam
5 years ago

I like the comparison of peoples’s investment strategy with the number of recessions survived.

Good to see that people who have seen more recessions are more interested in actively managing. Is it to due to better understanding or to recover their old losses…God knows!!!!

Sherry
Sherry
5 years ago

Brian and Emily, That was exactly my point (see post #11) but the trick is, finding adults who know enough about finance themselves to teach it and getting it to be a priority in school curricula. Case in point: I’m a trainer for state gov’t teaching a financie-related subject. I recently suggested to the head of a charter school that if she were willing, I’d bring lesson materials to the school on a monthly basis and give the kids the option of doing a brown-bag-and-learn lunchtime session. She said it sounded intriguing but that of course it would have to… Read more »

Sherry
Sherry
5 years ago
Reply to  Sherry

…sorry, I meant I teach a finance-related subject. My fingers must be having a postprandial nap moment.

Steve K
Steve K
5 years ago
Reply to  Sherry

No problem, Sherry. We got your message.

Hip hop. What could be more obnoxious. Why not classical? Folk? Jazz?

Do the taxpayers know about this?

Laura
Laura
5 years ago
Reply to  Steve K

“Why not classical? Folk? Jazz?” Without making any judgments about the validity of one type of instruction over another – because hip-hop and rap is what these kids largely listen to, what they’re interested in, and as an elective, is what they want to take. The school is trying to engage the students by offering not only the subjects they have to take, but something they want to take. For many of us, we might roll our eyes, but for students raised in families where education is not valued and books are nowhere to be found, anything that interests them… Read more »

Ely
Ely
5 years ago
Reply to  Steve K

Yeah, nowhere near enough high school kids today are going to take up classical or jazz to make it worth having a class. Hip hop at least has a chance.

As for music/dance over financial education, anything that gets kids up and moving, and engages the music side of the brain, is a worthwhile investment, while one more elective sitting in chairs listening has limited marginal benefit overall.

Steve K
Steve K
5 years ago
Reply to  Steve K

Laura, Ely — 1. Aren’t kids getting plenty of hip hop when they’re not at school? With school hours limited in number, why give the kids more of it? 2. I’m not saying kids should become classical or jazz (or blues, or folk) musicians. But having some knowledge of that music would be great. One night about twenty years ago I was driving with fellow soldiers near Savannah, in southern Georgia. We passed a street sign, “Willie Dixon Drive.” Hey, I said, isn’t that great, I didn’t know he was from here. “Who’s Willie Dixon,” a young troop said, and… Read more »

Alea
Alea
5 years ago

Very true about the lack of index funds in the 401(k) system. The system is incredibly flawed and rigged to rip the investors off and for the mutual funds to enrich themselves. I am making it my goal to get our advisor fired and have the company switch us to Vanguard. Looking at our investment choices it’s pure madness. First of all he has 90% of the company invested in junk bonds, which are a disaster when the stocks fall, as junk bonds act like stocks. Never mind the 1.2% fees we are paying on the bond funds. The international… Read more »

JoeM
JoeM
5 years ago
Reply to  Alea

Sounds like you should just contribute the minimum to get a full employer match and do it on your own, as it seems you have already done.

My employer only offers a conditional 1% match (basically if we have the money to – non-profit problems) and the plan fees are high – 2%+. So I’ve only contributed 1% to get my 1% and am just dumping the rest into my Roth IRA – Vanguard as well.

Alea
Alea
5 years ago
Reply to  JoeM

Our company offers a 6% match but lousy investment choices. Yes, I could just stop at the 6% but I feel like whomever is making these investment decisions doesn’t know what they are doing, and as part of the 401(k) committee I now have a voice. Second, with a Roth we are only limited to $5,500 a year ($6,000 in 2015) so not enough for me. Third, I do love the tax break I get from my 401(k)contributions and the only tax break a schmuck like me gets since I don’t own a home. Last but not least, it is… Read more »

Erika
Erika
5 years ago

I suppose I fall on the younger end of the spectrum here, and I’ve really only recently begun investing due to inheriting several accounts. So I sort of jumped the line, though I had been planning to begin investing on my own within the next year. At the moment I’m following the advice of my financial advisor and allowing others to invest for me, but my hope is that as I watch the growth of my investments and learn more about investing I’ll be able to gradually transition into handling it on my own. But as of right now I’m… Read more »

Steve K
Steve K
5 years ago
Reply to  Erika

Erika, it worries me when you say “At the moment I’m following the advice of my financial advisor and allowing others to invest for me.” Bernie Madoff, anyone? But he’s just one of many: http://www.firmex.com/blog/10-famous-investment-scams/ Earlier I recommended books by William Bernstein. Reading any of them (some are easier, some harder) will take only a week or so. Then you can understand and follow his advice (basically, to use asset allocation and index funds, which is not at all complicated or difficult) and stop paying for “financial advisors” commissions and, perhaps, advice that benefits their wallets more than yours. By… Read more »

Erika
Erika
5 years ago
Reply to  Steve K

I suppose the way I worded this does make it sound like I’m blindly investing my money. In fact, I inherited the accounts from my father who had already done much of the work in determining where to invest, and he did, in fact use asset allocation and index funds. So I’m just continuing along with what he already established and am using the help of his financial advisor until I can get my own footing on the process of investing. I trust my father’s financial decisions, and no, I’m fairly positive I’m not involved in investment fraud. I didn’t… Read more »

Vikas Rana
Vikas Rana
5 years ago

Wow..this is unbelievable!!

Seems like GRS has long way to go on educating the masses.

🙂

Pique
Pique
5 years ago

I am young and after reading this Iam going invest.Thanks.

lmoot
lmoot
5 years ago

I’m sure I’ll be scoffed at for my ideological naivety but I am 30 and I have never invested beyond a 401k (for the match), my ROTH (which was started by my grandfather when I was younger), and my first rental property. I still don’t know if I will ever invest in anything else, even mutual funds. Some of it has to do with ignorance, insecurity, and perhaps laziness (to learn and implement). But the older I get the more I feel a desire to pursue things which I can control and track the result and know where my money… Read more »

Linda Vergon
5 years ago

(This comment came from Gary, a reader of our daily newsletter.)

While I have no investments at the moment, I am actively looking for opportunities. I guess I don’t really fit any of the categories. I actively manage my own $$$ when I am in the market.

Gary
Waldport, OR

MechE31
MechE31
5 years ago

I am younger (late 20’s) and started my career in 07. I was a little overwhelmed by investments when I first had the money to invest. In 08, I started researching heavily and talking to friends. A group I talked to a lot was big into the Janus Contrarian fund. Right as I was about to jump in, the 2008 drop happened and that fund lost about 60%. It spooked me so much I didn’t get in until 2011. For the last few years, I steadily invested, favoring heavier retirement contributions and going into ETF’s in different sectors. I’ve recently… Read more »

Grace @ Certified Financial Planner
Grace @ Certified Financial Planner
5 years ago

I have to review my asset allocations quarterly if my investments are properly distributed.

KingDollar
KingDollar
5 years ago

I’m almost half vested in the markets at the moment, been managing my own account since I was in my early 20s without any financial advisor. Never taken any formal courses. Self educated on finance, economics and psychology. Perhaps I’m an outlier.

Jane
Jane
5 years ago

NOTHING about money is taught in school, or outside of the home. And the information in publications is opaque, or doesn’t begin to scratch the surface of money management. I started giving my kids allowances as soon as they started asking me for things. Usually around preschool. I think I started them out at $1. BUT, and this is important, I made them save half of everything they got. Allowances, gift cards, money for birthdays, etc. And I wanted the amount of money to be less then they would need to buy whatever the thing de jour was on a… Read more »

mark
mark
5 years ago

In Today scenario Pepole don’t have market risk, they have risk of Chossing right financial advisor…

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