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this post was submitted on 09 Jul 2025
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Actually just avoid the stock market entirely and pay someone else to manage your money.
I just have an account that I deposit money to every week when I get paid (actually it's automatically deducted) and never think about it.
Edit: of course make sure you have your 401k, HSA, and IRA accounts maxed out people. I didn't think I was going to have to say this but oh well. And high interest savings accounts are nicer and less risky. Do all of those things then get a broker to manage the rest of your money.
They aren't worth the money they're being paid. It's really not hard to do the most long time proven plan, which is to balance a portfolio between higher risk things like an SP500 index, and lower risk things like bonds. You weight it towards the index when you're young to get high average returns, then back it off into lower risk as you get older to lock it in.
"A Random Walk Down Wall Street" goes into how this strategy has been proven out over decades when so many others have failed. You technically can beat the SP500 (and be sure to include transaction costs), but only by taking on even higher risk.
The best investment advice for most people is really, really boring and not particularly difficult. Shouldn't even try anything else until you're maxing out all of 401k, HSA, and IRA and then have some leftover to try the riskier strategies.
Hi so I am actually maxing out a 401k and HSA, I have a IRA too but I only put a little bit into it. I also have a high interest savings account which is very nice.
But this is my long term savings and retirement. I don't trust myself enough for that and I've made 4-6% gains consistently since I started. Significantly better than I would be able to do (I know because I've tried with smaller amounts) plus I don't have to worry or think about it.
The s&p index returns about 10% a year over the past couple decades.
Anyone reading this would be hard-pressed to do any better than that. So there's no reason to do anything but just put your money in a giant index and wait.
This doesn’t make sense?
If someone is “managing” your money, they’re managing stocks and/or investments tied to stocks, even if it’s something like a direct deposit to a CMA.
High interest savings is pretty decent if you can find the right one, it’s a no-effort way to collect interest. Just make sure you can afford the bank’s rules like minimum amounts or any fees.
As far as someone else managing your money you left out a lot. Who and how? Money managers take fees one way or the other, they trade your money around based on whatever works for the business and not always what is best for the client. No matter what any trades will incur trade fees and capital gains taxes. Those gains and fees are losses that could have been avoided. I’ll stand by my original opinion.
Based on my recent meeting with someone from the retirement planning arm of my bank, high interest savings is ideal for an emergency fund. If you're keeping 10-20k sitting around it's just going to keep losing value in any traditional savings account. But having the rest in an IRA or RothIRA (US-specific tax advantaged retirement accounts. Basically one is taxed as money enters the other is taxed as money exits, and there's limitations to try to prevent abuse by the ultra-rich) can lead to significantly higher interest. He ran a report of "if we took your 401ks that we're rolling together and they just lived in this account over the last 30 years of markets here's what you'd have" and the answer was actually a lot more favorable than I expected.
IRAs are tied to stocks.
There’s no way to “avoid the stock market entirely” using this. Yes, you should balance how you want your tax burden to look in the future by deciding how you wish to invest in Roth or regular IRA. IRAs are also limited to how much you can contribute, whereas traditional stock investment does not.
I don’t want to get too deep in the weeds here for investing strategy. There’s pros, cons, and costs to each of these kinds of investment. People have to look at all of these, their personal capabilities, and risk tolerance. Personally, we’re (another key word here:) diversified across multiple investments and someone absolutely should take advantage of the same if they can.
I wasn't the one who said to avoid the stock market. I just got the feeling that your comment I was replying to was saying to just place money into a high interest savings account and wanted to throw an alternate opinion out there
Ah, sorry didn’t see the name change. No, that was never my intent. Diversification is a must.
No worries! Have a wonderful day!
So I do actually have a high interest account from Capital One it's very nice. But yeah there's a bunch of rules like minimum monthly deposits and it takes up to 5 business days to transfer money out of it. And because y'all are assuming, I also have a 401k and HSA maxed out, and a Roth IRA I put some money in each month.
But yeah I intentionally left out a lot because I am not a financial expert, which is the reason why I went with a broker anyways. But here are the answers for your questions
I’m not continuing this discussion to change your mind. If you’re happy with what you’ve got you’ve no need to listen to me. Big consumer investment houses are there to make money off you. Everything you listed is exactly what I mentioned as being a reduction in your ROI and incurring fees and taxes. For instance, we’ve invested in QQQ (feel free to check it) for more than a decade using the strategy I mentioned first. Even over the last 5 years it’s had 110% return. $10k is now more than $20k without bothering to calculate DCA or returns investing. Now do that across more index funds. Even if averages 7% with gains/losses and no fees or capital gains you can see that this comes out far ahead.
All that said, good luck.
Sure, but this is my retirement and long term savings. I'm able to admit my limitations and this is one of them.
I go to a doctor when I'm sick too. I trust professionals.
The difference in skill level needed between a good doctor and a good money manager is massive. It's the difference between years of experience and a few you tube videos.
Ah yes there is no such thing as experience or knowledge in financials!
I'm in IT and it's the same way! Throw on an LTT playlist and by the end of the day you'll be a sys admin!
you are severely overestimating the capabilities of what qualifies as a good money manager
I can't tell if you're being sarcastic or not but I worked with someone who watched LTT religiously and seemed to get most of his training from LTT. I spent a lot of time figuring out what he did or didn't do, writing the documentation he didn't write them fixing what he built incorrectly. LTT tries their best but their background is purely in gaming computers and it really shows, especially with the repeated IT failures that really shouldn't be happening in an organization of their size
Yes, but they make money when I make money. I pay like $750 per year to keep my account open, but other than that he only takes a percentage of my monthly gains. The more money he makes me, the more money he gets from me.
And yes of course I could do enough research to match or very them in gains and I could spend enough time watching the markets to make sure I am making sound decisions. Or I could just pay someone a few hundred bucks a month to do it for me. I know what decision I chose.
I think you missed three facts that I keep trying to hammer home.
Thank you. You are the first person to actually understand what I am trying to say.
That doesn’t make any sense, they have a shared interest. They make more money when you make more money.
Yeah, I do the ETF thing too.
I get the possibility of some kind of insider trading, but they still have to make good returns or they’re gonna lose the job.