You Can Do It

     In our society, self-help is becoming increasingly rare. Most people don't believe that they can do auto or home repairs themselves. Calling a repairman for everything can get very expensive pretty quickly. The pros who perform the work can often go right to the source of the problem and get it fixed because they see the same problems every day. It would be bad for business if they told their clients just how easily and cheaply the washer, dryer, stove or air conditioner can be fixed. Some things are better left for the pros, but many things are doable with a little education. Recently, my daughter was having trouble with her washing machine. She told me how it wasn't pumping all the water out of the tub and leaving her clothes with a funky smell. I have repaired many washers with the same problem and knew with a 90% certainty just what the problem was. It usually takes me about 30 minutes and a $10.00 part to fix the condition. For my daughter, who hasn't ever done this repair before, this was a huge job. With limited tools and limited mechanical knowledge, she overcame her fear of failure and tackled the job, saving her family $175 in the process. Such tenacity can and should be applied toward your investing activity. Why should you pay for the services of  a financial advisor to manage a modest retirement account when a little knowledge can save hundreds or thousands in fees? The fact is that about 80% of professional money managers cannot beat the unmanaged index of stocks that they compete against. That makes a case for just buying an unmanaged index fund that tracks the market, like the S&P 500 index. Most mutual fund companies like Vanguard and Fidelity have such funds. The fees are low and you aren't paying someone to underperform with your hard earned money. Investing is not rocket science. I have laid-out some commonsense rules to guide you toward financial independence. As you become more comfortable with investing, try your hand at buying individual stocks to complement your mutual fund portfolio. I personally get bored with mutual funds and enjoy buying and following stocks. Just like fixing the washer, the hardest part is to get started.