In 2019 it’s amazing to me that money managers still exist. Well, okay, maybe the super rich need a guy that has vast connections to various financial derivative products (seriously, try to set up a mortgage interest rate swap on your own, that is TOUGH), but most people don’t. Seriously, that guy who says he can get you 20%. Who’s shop is incidentally next to the Dunkin Donuts, is not necessary for your financial needs. In fact the simplest (and arguably the most effective) strategy was created nearly 30 years ago and might take you about 40 minutes to set up. What is the magic financial pill you ask? Well it is index funds.
What are index funds? Index funds for lack of the better definition, are funds that invest in every stock or financial instrument certain indexes (like the Dow and S&P) have, simply put you’re essentially buying a share in an index. The most popular index funds by far, are those with Vanguard. But because were are talking about the simplest way of making money, we need something that you don’t even need to talk to any one to invest in, and that is the S&P 500 trust ETF or $SPY. This fund is an amalgamation of all 500 of the S & P 500 index stocks. In case you weren’t aware the S&P index makes up 90% of the overall United States stock market by market capitalization. This means that you can get supreme diversification, and a very nice return that averages about 11% year over year. Not to mention the fact that over half of the money managers in financial advisory roles cannot beat the S&P 500 index. So by simply investing your money in an index, you are already beating half of the people that do this for a living.
Setting up this investment is quite easy too. Gone are the days of actually having to call your broker and having them pitch you worthless stocks, while stalling out your order, in order to shake you out of more commission money. Instead all you need to do is simply set up a brokerage account with Robinhood, which takes about 40 minutes (or you know, use an actual brokerage). Wait a couple of days for the funds to clear and start investing in index funds. And with any luck the American economy will still be functional (which is the only thing you have to “worry” about with these investments) and you will be your way to enjoying those financial gains.