Small changes can produce big results

Small changes produce big results

When you learn enough about investing and how the market works, you realize that trying to beat the market is a fool’s errand. The optimal way to invest is to buy and hold index funds. So what levers can you move to maximize your future wealth? Well, there’s really just a few:‎

How much you put in. This is the big one. No amount of clever index fund picking, nimble rebalancing, or brilliant tax efficiency is going to make up for not putting money in. If you want to build more wealth, you gotta invest more money. Anyone who tells you different is selling you something.‎
Your time horizon. I KNOW, some of you are 40 (I am too… in November). So you don’t HAVE 40 years before you want to retire. I get that. But trust me the math gets WAY worse if you wait another 5 or 10 years. Start now. The earlier the better. ‎
Expenses. Since outperforming the market isn’t a realistic way to improve returns, the one lever we do have is to minimize fees. Paying high expense ratios to a mutual fund? Consider switching to an index fund. Have an old 401k with a previous employer? Roll it over to a lower fee IRA. Paying high fees or loads to an investment advisor? Consider a DIY index fund approach. And for the love of god, stop pouring money into permanent insurance policies (indexed universal life, I’m looking at you)‎

I end all my posts with the two rules, because that’s what it always comes down to at the end of the day. I know it’s not easy, bu