My eyes tend to glaze over and I do whatever it takes to get distracted when hubby starts talking about finances. I know it’s bad, I know it’s wrong but sometimes, thinking about investing, retirement, the kids college savings can be pretty daunting!
So when I got an invite to attend a day at Vanguard for Mom Bloggers, I was all in. I was hoping they would simplify it for us – and they did! I left with a ton of really great info and tips and I am going to share a few with you guys for anyone who, like me, finds talking finances overwhelming.
I loved these simple but quick tips on investing that were shared. According to Vanguard, our best chance of investment success relies on 4 things that they call G-B-C-D. They are as follows:
Goals – be specific. Make clear and specific goals. “I want to retire at 65.” ”I want to cover 100% of my child’s education.” They need to be reasonable and attainable as well. Retirement and college are the two biggest goals for most investors.
You also need to understand your constraints – one of the key constraints is age or time. If you want to retire at 60 and you are 50, you have a 10 year plan. Understand where you are and what you can do.
Balance – asset allocation. In your portfolio, the mix of assets you have – cash, bonds, stocks. It is the primary result of the return in your investment. Broad diversificaion is key – you don’t want concentration risk where you have most of your assets in only one thing. Index funds are a way to do this at a low cost.
Cost - you are in control of what you pay for your investments. The less you pay for your investments, the more of your return you keep! Low cost does not necessarily mean it’s not something good, the way it would in retail. Keeping investment cost lows helps position you to have the best chance for investment success.
Discipline – Check in regularly on your portfolio. Check in on your own life – has something changed in your own personal circumstance. Divorce? Child went off to college? They factor into whether you have to rethink or adjust your portfolio.
Vanguard invited me to this event and provided me with educational materials, meals, and a gift card to offset travel and child-care expenses. The views and opinions in this post are my own.