This past week has been a big one at my firm. We finished our transition to a low-cost 401k provider, Vanguard, and completed our enrollment process. The switch has invigorated everyone at the firm and gotten them serious about investing. Before, many didn’t actively participate in our retirement program because of fear and lack of understanding of investments.
The firm has provided numerous resources to the employees, including one-on-one sessions with a CFP, to understand the importance of saving for retirement and practical steps like picking an asset allocation, choosing specific investments, and knowing where to find help if they needed.
This education has instilled confidence in everyone’s ability to understand investing and spurred them to action, which, in my opinion, is the single most important thing they can do for their future. Over the past couple of days, I’ve heard things like “I can’t believe we haven’t done this earlier,” and “I’m so thankful that the firm has done this.”
Just like my coworkers who have developed a new understanding and appreciation for investing, you can take simple steps to gather knowledge about the process and alleviate your fears about investing to start building a solid financial future.
Knowledge is Power
The excitement over learning about investing has been particularly interesting for me because I got to see the shift in excitement through many one-on-one conversations with my coworkers. I asked before the switch how they felt about saving for their retirement and why they either didn’t do it or completely handed off their portfolios to an advisor. Many felt investing was over their head.
These simple educational sessions helped people understand that investing wasn’t as hard as they thought and spurred them forward with setting and achieving their financial goals. In addition, it lead them to ask even more questions and search online about other tools that would help them meet their goals. I even got texts over the weekend about our plan particulars. This kind of enthusiasm excites me.
Some helpful investing tutorials
I could definitely empathize with this paralyzing fear. As I’ve said before, investing used to intimidate me as well. And with so much buzz on tv, radio, and the internet of the vast array of investments, it was hard to know the best approach to take to get started. So I didn’t.
But reading blogs like this one, where you can learn simple techniques like index investing or knowing what you should ask to find a trusted advisor, can help you learn the fundamental concepts that you need to get started. The blogosphere is full of great resources like: The Oblivious Investor, Get Rich Slowly, and the Mintlife Blog.
Beyond the internet, you can also find some very good primers on investing. My favorites are the following:
- The Four Pillars of Investing by William Bernstein
- A Random Walk Down Wall Street by Burton G. Malkiel
- Common Sense on Mutual Funds by John C. Bogle
I’ve found these books immensely helpful in understanding investing in general, as well as developing a specific strategy for my portfolio. And while all three authors favor index-fund investing, you really understand the reason why and you get to learn about other investing approaches as well.
The most important thing you can do for yourself now and your financial future is to get started. Take some time to learn about investing and don’t let your fear paralyze you.