Do-It-Yourself Investing: Take Control of Your Financial Future

Taking control of your financial future is a liberating feeling, and do-it-yourself investing can help you achieve it.

By investing in a diversified portfolio, you can potentially earn higher returns than traditional savings accounts. According to studies, a diversified portfolio can earn 7-8% returns annually, compared to 1-2% from savings accounts.

Investing in yourself is a great way to start, and it's a low-risk option. You can start by investing in a tax-advantaged retirement account, such as a Roth IRA, which allows you to contribute up to $6,000 per year.

With the right knowledge and tools, you can make informed investment decisions and take control of your financial future.

To start DIY investing, you must fill your head with knowledge, as mentioned in the example.

Open an online brokerage account to begin putting your capital to work.

Before investing, you should have a clear understanding of the process and the risks involved.

You've decided to take the first step, and now it's time to get started.

Reading books, articles, and online resources is a great way to learn about investing and stay up-to-date on the latest market trends.

Don't be afraid to ask questions or seek advice from financial experts if you're unsure about anything.

Remember, the key to successful DIY investing is to be informed and patient.

As a DIY investor, it can be overwhelming to choose from the many investment options available. However, by focusing on asset allocation, you can narrow it down to a handful of ETFs, index funds, and REITs.

You can also allocate a small percentage to individual stocks if you're an investing enthusiast. For 80%+ of investors, investing in low-cost ETFs should be good enough. The most common ETFs include S&P 500 options like SPY, IVV, SPLG, VOO, and VTI.

Treasury Bond ETFs like IEF and TLT, and Municipal Bond ETFs like MUB, are also popular choices. REITs or Real Estate ETFs, such as VNQ, IYR, AMT, SPG, PSA, EQR, and DRL, offer a way to invest in real estate without directly owning physical properties.

Consider signing up for a robo-advisor for free to help construct your portfolio. Fill out a short questionnaire about your goals, risk-tolerance, age, and so forth, and the robo-advisor will spit out a recommended model portfolio based on your situation.

Investment accounts are a crucial part of do-it-yourself investing. You'll need a brokerage account to buy and sell stocks, mutual funds, and ETFs.

Opening a brokerage account is typically a quick and painless process that takes only minutes. You can easily fund your brokerage account via an electronic funds transfer, by mailing a check, or by wiring money.

Before choosing a broker, consider the type of account you need. For most people, a standard brokerage account is sufficient, but if you're investing for retirement, an IRA might be a better option.

Here's a brief rundown of the main account types:

You should also consider the fees associated with your account. Some brokers offer $0 online equity trade commissions, while others may charge more. Empower's free financial tools can help you stay on top of your investments and identify areas for cost savings.

You can start managing your investments with ease, thanks to services like Schwab that offer $0 online listed stock and ETF trades and no account or trade minimums.

Having a clear plan is essential to successful DIY investing. This involves outlining your objectives, desires, needs, and priorities.

Schwab also provides support from investing and trading specialists to help you build, trade, and manage your portfolio.

The DIY investing process involves several steps, including developing financial and investment literacy, gathering and analyzing relevant information, and constructing an investment management plan.

Here are the key steps to consider:

It's also worth noting that investing in the stock market involves risk and unpredictable fluctuations, but with a clear plan and the right support, you can make informed decisions and achieve your financial goals.

As a DIY investor, you'll want to have the right tools at your disposal to make informed decisions about your investments. Research investments with ease using over 100 criteria with Schwab's research screeners.

You can find stocks, mutual funds, or ETFs that fit your criteria, and even get clear A-B-C-D-F equity rating grades on how a stock will perform compared to the equities market over the next 12 months. This can help you make more informed decisions about your investments.

Schwab also offers premium independent research and analysis from Morningstar, Argus Research, and several other providers. This can give you a more comprehensive view of the investments you're considering.

With Schwab, you can start managing your investments with ease, including $0 online listed stock and ETF trades and no account or trade minimums. This can help you get started with investing without having to worry about upfront costs.

You can also build, trade, and manage your portfolio your way at Schwab, with support from investing and trading specialists. This can be especially helpful if you're new to investing or need guidance on how to manage your portfolio.

Schwab's DIY Investor Free Tool is a great resource for tracking your investments and optimizing your portfolio. With features like the Investment Checkup tool, you can identify areas where you can reduce fees and make adjustments to your portfolio.

Here are some key features of Schwab's research and screening tools:

You can also use Schwab's Gain/Loss Analyzer to quickly visualize and analyze your trade performance, and leverage key success metrics to explain what you're doing well and areas to improve.

With Schwab's Portfolio Overview, you can get a clear view of what's going on in your portfolio at a glance, including your balances and positions, and track your assets over time. This can help you stay on top of your investments and make adjustments as needed.

Schwab's Portfolio Builders can help you build a diversified portfolio of ETFs or mutual funds using Schwab's asset allocation models that range from conservative to aggressive. This can be a great way to get started with investing and create a portfolio that's tailored to your goals and risk tolerance.

To create a solid investment plan, start by understanding your investment options, which can be overwhelming. However, as a DIY investor, you can narrow your choices to a handful of ETFs, index funds, and REITs, such as the S&P 500 (SPY, IVV, SPLG, VOO, VTI), Treasury Bond (IEF, TLT), Municipal Bond (MUB), and REITs or Real Estate ETFs (VNQ, IYR, AMT, SPG, PSA, EQR, DRL).

For 80%+ of investors, investing in these low-cost ETFs should be good enough. Consider using a robo-advisor like Empower to help construct your portfolio, as it can analyze your portfolio's composition, highlight fee reductions, and identify potential issues. For example, Empower's Investment Checkup feature can help you swap out high-expense funds, like the Fidelity Blue Chip Growth Fund, for lower-cost alternatives.

To allocate your assets effectively, follow an asset allocation model by age or work experience. For instance, at age 30, you might decide on a 70% stock and 30% bond allocation, which can be easily constructed with two ETFs: 70% SPY and 30% IEF.

Setting financial objectives is a crucial step in investment planning. It's what gives you the motivation to take risks and make smart investment decisions.

Common financial objectives include saving for a down payment, paying for college, and retiring with a large enough nest egg. These objectives will serve as the reasons for investing and drive your decision-making process.

Having a clear financial objective can also increase your motivation to provide for your loved ones. For example, after having a child, my motivation to provide shot through the roof, and I was able to boost my consistent passive investment income by about $100,000 in just four years.

To determine your financial objectives, consider your risk tolerance and what's most important to you. You can also use asset allocation models by age or work experience to help guide your investment decisions.

Here are some common financial objectives by age group:

Remember, these are general guidelines, and your financial objectives may vary depending on your individual circumstances. Be sure to review and adjust your objectives regularly to ensure they remain aligned with your changing needs and goals.

Having a clear view of your portfolio is essential to making informed investment decisions. You can get a snapshot of your investments with a Portfolio Overview, which allows you to view your balances and positions, track your assets over time, and get market updates in one place.

To link your non-Schwab account information for a more complete view of your finances and holdings, simply follow the instructions in the Portfolio Overview section. This will give you a comprehensive picture of your investments and help you make more informed decisions.

By using a Portfolio Overview, you can stay on top of your investments and make adjustments as needed. This tool is available to Schwab customers and can be accessed through the Schwab website or mobile app.

Here are some key features of a Portfolio Overview:

By using a Portfolio Overview, you can take control of your investments and make informed decisions about your financial future.