10 Reasons Why YOU Should Manage Your Investments
January 4th, 2008
Filed under: Investing, Retirement
- You can perform better than professional money managers!
- With a little research and financial know-how (Subscribe!) you can out perform the pros. Even if you do not, I have faith in you. These pros are typically managing HUGE amounts of money - millions upon millions of dollars and they have to constantly be invested to meet investor demands. You don’t have that pressure and unless you’re filthy rich, you have a much more manageable asset base that will not significantly change the price of a stock when you make purchases or sales! - Keep your hard earned money - Don’t give it away!
- Unless you’re investing in index funds which typically have lower management fees, you’re probably giving away up to 5% or more of your assets away thanks to front-loads, back-loads, annual and other management fees. 75% of mutual funds don’t even beat the S&P500 ( a market performance benchmark) every year, and that sucks! - You should be in control of your money!
- If you can’t trust yourself with your money, then who can you trust? If you have no idea what’s going on with your investments and your financial life how do you expect to benefit from it? Investing is a learning process just like anything else in life. It should be a journey on which you start at a young age and through mistakes and successes you learn to jump over the proverbial tiger pits and bask in the warm rays of success. - Talking about your investment strategy is baller!
- ‘Dude, I heard the Goldman Sachs’ CEO just got a $68 Million bonus this year!’ says your friend. ‘Yeah, Goldman just hasn’t been performing for me lately. I dumped it at 220–what an overpaid bastard,’ you retort. Investing is one of those things that your friends will want to know about and will want to get involved. ‘Wait, so you OWN a piece of Google?! That’s awesome!’ It is through this process that we can perpetuate the cycle of financial awareness and know-how. The more openly we discuss it the better off we all are. It’s just money! - You grow with your money!
- Personal finance and investing is a journey, not a destination. Start small when you’re young and let your money grow with you–in return your money will grow increasingly as you become more experienced. You never know what you are capable of until you step outside your comfort zone and take a risk. - Only with risk is there great return!
- If you don’t want to risk losing your money, put it under your mattress. Even then someone might break in to your house and steal it. There is no such thing as a guaranteed return. There is a ‘more than likely return’ with US Government insured bank accounts and t-bills but you get crap for return with those. You might as well gauge your risk and increase your return. The longer you stay in the game the more likely you are to profit. - Finance is only boring if you don’t understand the potential rewards or if you hate money!
-From what I’ve seen, the only people that hate money are:
A - People that have none (see: The Beginners Budget if this applies)
B - People that won the lottery and all of their relatives tried to kill them for it.
C - People that think they can live off of Social Security when they retire. (Good luck!) - If you lose your shirt, you can’t point fingers!
- That’s right. Take responsibility dammit. I think this is one of the biggest reasons that people these days don’t manage their own investments: because there is no where else to point your finger other than your gigantic forehead. Even if you did find something or someone else to blame it on, go ahead; point your finger. Just remember that you’ve got 3 more fingers pointing right back at your stubborn self. - It’s a great feeling of self accomplishment!
- There’s nothing better than a feeling of ‘Hell yes I have a $2.5 million dollar portfolio and what did I start out with? Nothing but an avocado, some tin foil and a snorkel.’ Trust me, people have done it with less. You deserve to bask in the glory of your success and it will be that much more epic and glorious if your fortune was self-made. - If you suck, there are always index funds!
- Like I said earlier: Less than 75% of professional fund managers beat the S&P500 index year to year so if you give it a shot and find out that you suck at investing and/or life in general, you can always throw your money into a low cost index fund. It’s better than getting 0.3% interest in your Chase savings account.
January 4th, 2008 at 10:52 pm
#4 is by far the best. I always get these looks from my fiancee whenever we come across something and I shout out for whatever reason, “Hey, I own a piece of that!”, or “Yeah, I have some contracts with X.”
With regards to #1, what do you think is a reasonable target for an individual on a monthly and/or yearly basis? I’ve been getting quite a bit of heat with my generous 10% monthly returns for options traders but that doesn’t seem completely out of left field. It could also be the past three days of awesome trading though!
January 5th, 2008 at 12:23 pm
I agree that number 4 is a hard pill for some people to swallow. They think when you say you own a company stock, you are investing your money into building the company up and not the fact that you OWN a part of that company. Maybe a small portion but if you own a piece of that stock, you own a piece of that company. Any investor meetings or anything like that your usually allowed to participate in (or stockholder meetings, whatever its called.)
Take for instance, Wal-Mart! I’m not going to judge their stock but when I worked there I put in $20 of every paycheck into their stock and got a $3.00 company price match added on. I think I only made like $10-$15 R.O.I. from that and seeing how CompuShare managed it, they charge $20 to sell your stock. Therefore I never really made any money off it.
Bottom line… stock ownership is like one of those prestigious things, you own a stock and its like your a millionaire (figuratively speaking.)
January 7th, 2008 at 10:09 am
@Wise words everyone should manage their investment according to ric edelman since the mutual fund industry has a lot bad things happening it.
http://www.livelymoney.blogspot.com
August 14th, 2008 at 3:21 pm
I personally like number 9 the best, nothing is better than knowing that you started with nothing and that through your hard work you now have millions.