You’ve heard it a thousand times: “Learn to invest.” It’s a common piece of financial advice, yet when you imagine what investing actually looks like, you might picture a broker sweating it out in front of multiple monitors filled with stock charts or traders shouting over one another on the New York Stock Exchange floor. Either way, investing seems hard.
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In reality, it doesn’t have to be. It can even be, well, lazy. Becoming a lazy investor actually gives you control over your investments without the stress of trying to be the next Warren Buffett.
Ready to become a “lazy” investor? Here’s how:
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So, what exactly is lazy investing, and is it really as simple as it sounds? Essentially, it’s about assembling a portfolio of investments that don’t require much ongoing management. A lazy portfolio consists of a few diversified, low-cost index funds or exchange-traded funds (ETFs) that can potentially perform well over the long term without extensive monitoring.
ETFs are an excellent foundation for a lazy portfolio since they bundle a variety of securities, like stocks and bonds, to provide instant diversification. When you purchase a share of an ETF, your money is spread across a range of investments instead of being concentrated in a single company.
Think of a lazy portfolio like a cactus — dependable and low-maintenance. It’s not a delicate flower that requires constant care and attention.
You don’t need to be a financial expert to establish a lazy portfolio. If you find a trusted financial advisor, they can help you select index funds and ETFs that match your goals and risk tolerance.
Rather than hiring a traditional financial advisor who charges 1% of assets under management, consider seeking out an advisor who will meet with you annually for a flat fee. This option allows you to get guidance on setting up your portfolio, checking your asset allocation, and determining your next steps without the added complication of paying ongoing management fees.
Before you fully relax, there are a few essential steps to automate your lazy portfolio. One of the best moves you can make is to automate your contributions, such as setting up regular deposits into your 401(k) or IRA. Automatic contributions ensure that you’re consistently investing toward your financial goals without having to think about it.
