DYF -> DYP -> DYA
Before we begin, I hope everyone had a little fun playing with yesterday’s retirement calculator. That is one of the most useful and beneficial tools we share with DIY Investors…even though it can be brutally honest, which to some is not much fun.
If you’ve been following this week’s daily blogs focused on the phrase ‘Carpe Diem’, you know what two of those acronyms stand for: DYF – Defining Your Future (retirement vision), led to DYP – Developing Your Plan (understanding if you’re on track to realize that vision), which leads to today’s DYA.
So, here today’s Do This, Not That:
Do This – DYA (Define Your Actions)
Actions can take on many different forms such as:
- Simply writing down your plan to ensure you get and stay on track
- Moving a small amount of money to a self-managed brokerage account to get a feel for the process
- Committing to enrich your investment knowledge
What matters most is that your actions start making a positive difference toward becoming an informed self-empowered investor.
“Vision without action is a dream. Action without vision is simply passing the time. Action with Vision is making a positive difference.” – Joel Barker
Not That – Do nothing by continuing to allow your wealth to be confiscated by your advisor and the industry
The last two days provided academic-based evidence that provides further proof the game investors are playing investing with an advisor and the financial services industry is totally stacked against them. Here are a couple facts:
- If any of your investment dollars are invested in mutual funds, you have a 1 in 4 chance (25%) they will outperform their benchmark index. Video – pay particular attention to the part between 1:16 – 2:05. Barton Biggs worked for Morgan Stanley for 30 years as their Chief Global Strategist and is a nationally recognized financial expert.
- If any of your investment dollars are invested in hedge funds, you have a 1 in 20 chance (5.7%) they will outperform their benchmark index. Here’s the article based on academic research: Can a Monkey Pick a Hedge Fund?
We think it’s much more prudent for investors to ditch their financial advisor ASAP, invest in passively-managed, low-cost, tax-efficient index funds or ETFs and improve their odds of investing and building wealth to 75-95%.