My dad and I are about as different as two people can be when one formed the life experiences and personality of the other for 18 years: He’s a Midwestern lawyer who lives for Michigan football, and I’m a know-it-all East Coast transplant who’s a proud University of Michigan graduate but enjoys tailgating more than the actual game.
Those very crucial differences aside, one thing we have in common is our enjoyment of talking about the nuts and bolts of our personal finances (invite us to your next party). My dad loves reading through annual investment reports and mailing me articles he cut out of the Wall Street Journal, and I appreciate that he enjoys reading my posts for fun, not out of parental obligation.
It was in that spirit that I emailed him a fact sheet for my retirement account. I’m pretty comfortable with my current mix of funds, but thought he’d enjoy seeing the plan options. He responded with a few ideas of his own, raved about certain funds he was also invested in, and ended his note with what I think is a nice sentiment:
Put in as much as you can afford on a per paycheck basis, concentrate on doing your best work possible, and check your retirement account at the end of the year.
I love this not because it’s groundbreaking advice but because it’s the exact opposite – often we’re caught up in maximising whatever we can and looking for ways to beat the market (and each other), that we forget that a lot of things about personal finance are very simple. You should save and invest as much as you can, but aside from that, a lot of things are outside of your control. Focus on what you can influence so you can hopefully earn more money and enjoy your life.
As for what to invest in, well, the boring answer is usually the right one – low cost index funds and ETFs. I have about 40 years until “retirement age”, so I’m pretty much all in stocks, spread over large, mid and small caps, with some foreign stocks mixed in.
None of this is to say you shouldn’t read up on your fund performance and recalibrate if you need to – knowledge is power. But sometimes we need a good ol’ fashioned dad reminder to not get so caught up in the details that we forget the basics.