37. Invest In (Or Max Out) Your Other Retirement Accounts

After meeting the match with your employer plan and reading those 2 great books on investing, the next step is opening up other retirement accounts: Traditional IRA or Roth IRA (or RRSP and TFSA for Canadians).

Whether you’re going to DIY through your own discount brokerage account or leveraging a robo advisor, the goal is to start.

Start small, start big, just start. The power of compounding and time in the market will be your best friend as you navigate your financial journey.

38. Start With A Robo Advisor If You’re Not Comfortable With DIY

If you aren’t fully comfortable with investing or would rather “set it and forget it” at this stage of your investing career, robo advisors are an amazing option.

Robo advisors have made saving for retirement more accessible and easier. They can give you access to broad market index funds and pre-built portfolios to match your risk tolerance.

While the fees will be slightly higher than DIY investing, if the comfort of going with a robo advisor is what will get you started and feel most confident, do it! I invested with Wealthsimple before moving all my funds to Questrade and was always extremely happy with the Wealthsimple platform.

39. Fees Will Cripple You

As an investor you don’t get to control much with what goes on in the markets with your money. However, one area you can control as best possible are the fees you’re paying.

The growth in low-cost access to investing has made this much more effective than in the past. Don’t let investment fees cripple fee. Do as JL Collins recommends in his book The Simple Path To Wealth.

Check out this case study on how retirement fees could cost you over $500,000 in your lifetime.

40. Diversification

Diversification doesn’t need to mean having 17 different ETFs, 40 individual stocks, REITs, GICs, HISA, a tri-plex, etc.

You can achieve equity diversification with a 3-fund portfolio featuring a domestic stock total market index fund, international stock total market index fund and bond total market index fund. You can read more about a 3-fund portfolio from The Bogleheads.

Then perhaps add real estate investments and maybe a more-risky, smaller allocation investment. The idea here is “not having all your eggs in one basket” to reduce risk and create multiple streams of investment income.

This article can help you take a deeper diver on diversification.

41. Asset Allocation & Rebalancing

This is about building an investment plan and sticking to it. Plus have the flexibility and wherewithal to adjust as market changes shift your allocation or as you age and get closer to retirement.

As a broad, non-specific example to provide clarity to these terms let’s assume your target asset allocation is 80% equity and 20% bonds. Let’s say because of market conditions and changes in prices of the assets you own in your portfolio, your allocation has shifted to 85% / 15% at the end of the year.

The practice of rebalancing is the buying and/or selling of assets to get that allocation back to the target holding.

The books mentioned above, The Simple Path To Wealth and I Will Teach You To Be Rich, will help clear up these concepts.