Your Chance To Pay It Forward

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Over the last few weeks I’ve fielded several financial related questions (more personal finance than actual investing) from some younger people in my life (mostly nephews). This is a great reminder of a point I have made quite a few times over the years which is that even if you’re not an advisor, the fact that you care enough about investing to spend time reading blog content very likely makes you the go to person for investing and planning advice in your various circles. You know how most people know a guy or have an uncle, well that is you. You may think you know a lot or you may think you only know a little but you know more than the person asking you.

This is a great opportunity to help someone and possibly have a meaningful impact on someone’s life. We have all had people in our pasts, impart wisdom to us, even if they didn’t know it was wisdom, that then had a meaningful impact on our lives. I personally have been on the receiving end of one these for life choices, how to do my job, firefighting including how to be a better fire chief as well as diet and exercise ideas and of course personal finance.

One of the questions aimed at me lately was at what point is a brokerage account big enough to diversify beyond two or three broad based ETFs. The issue here is commissions. An account with $20,000-$30,000 is a great start for a younger person but buying 20 holdings, paying $8 per trade is not necessarily the most economical way to go compared to 20 trades at $8 each in a $200,000 account.

It became obvious about 12 years ago that the investment world was getting flatter by virtue of the access that ETFs were starting to provide as well as how much cheaper ETFs were than traditional mutual funds. As time has gone on, ETFs have listed that offer access to ever more market segments and strategies, the associated fees have continued to trend lower and just about every online brokerage now offers a huge swath of ETFs commission free.

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