Fortunately is an automated financial planning tool and human blog that provides simple answers to complex questions.
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3. Control your emotions!
Don’t let your short-term emotions make your long-term decisions.
The stock market will go up & down, but after 5+ years it’s pretty unlikely you’ll have lost money investing (assuming your portfolio is well diversified) unless you sell.
2. Be patient!
Compound interest works some mathematical ✨miracles✨ over the long-term. All you need to do is keep investing the correct amount each month to hit your goals.
1. Start with a long-term strategy
Know what goals you need to save for in the future, when you want to retire, and how much you’ll need in retirement.
This tells you how much you need to set aside each month and what your asset allocation should look like over time.
LA as in Los Angeles or Louisiana? In Hermosa Beach (SW Los Angeles), mobile homes go for $600-800K 🤯
You can Google “expense ratio” + the fund’s ticker symbol to find what the fund charges. Multiply that by the amount you have invested, and that’s what you’re paying each year.
If the expense ratio is high (over 0.1% or so) – it may make sense to look for a lower cost option.
A three fund portfolio is an easy way to manage your own investments while still achieving the goal of a well-diversified portfolio, with ETFs doing all the heavy lifting for you.
Visit livefortunately.com to see the perfectly weighted 3 fund portfolio optimized just for you
We are among the many fans of three fund portfolios. Experts cite many advantages (see below), but the effectiveness of three fund portfolios pretty much comes down to the broad exposure and efficiency of ETFs.
Most investors aren’t exposed equally in each of the three categories; their asset allocation mix will differ depending on their risk tolerance and proximity to their goals.
A three fund portfolio is made up of three basic asset classes:
1. Bonds
2. U.S. stocks
3. International stocks
Oftentimes, an investor will use total market funds to invest in each of these categories so they are able to broadly sample the market.
A three fund portfolio is exactly what it sounds like: an investment portfolio that only has three funds.
This strategy is one of the many “lazy” portfolios focused on a few low cost funds that require infrequent rebalancing.
Your asset allocation mix is too important a piece of your overall investing strategy to be left to chance.
Thankfully, a simple strategy exists that is logical, efficient, and easy to execute.
Welcome to the three fund portfolio.
Want an automated financial plan like this one for yourself?
Create one in less than 5 minutes at livefortunately.com and try us out with a 30 day free trial.
You don’t need a financial degree or even a budget to live your best life – all you need is the knowledge on where, when, and how to invest your money to reach your goals.