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I was driving back from a camping trip last weekend with a girlfriend who told me a story about how when she was in college she and another friend of ours would do their own car repairs. They bought a manual, borrowed tools from our friend’s dad, and figured out how to change their oil, replace brake pads, and repair an alternator. To say the least, I was impressed. I don’t even know what an alternator is!


Needless to say, car repair DIY is not my specialty, so if that’s what you’re here for, you made a wrong turn somewhere. But as we were talking about all things life — cars, houses, money, emergency preparedness kits (for reals) — I realized that the apprehension I feel about trying to repair an alteriminator (that’s what it’s called, right?) is similar to what many of my friends feel about finances and investing. And I suspect these are similar apprehensions in that they’re really not so scary once you dig in.

Once I knew I wanted to invest in something other than the underside of my mattress, figuring out *how* to do so was a surprising hurdle. I had a 401k through Fidelity from my workplace and a Roth IRA that my mom had helped me set up in 2001 through Edward Jones, and I had heard of investment banks like JP Morgan and websites like eShares, but I didn’t really understand what any of these places did or how they were different. I was overwhelmed and ultimately paralyzed by the range of choices, so I did nothing.

This all changed in 2010 when I traveled to South America with a friend who had a Charles Schwab checking account. She spent our week together chastising me for paying exhorbitant ATM fees while her debit card allowed her to withdraw cash without any international transaction fees or ATM charges. After spending tens of unnecessary dollars on such charges, I was sold, and didn’t hesitate to move my checking account to Schwab immediately upon our return about a year later. The only “catch” with the Schwab account was that it required also opening a brokerage account at the same time, but there was no minimum balance requirement. This seemed perfect, as the only think I knew about brokerage accounts at the time was that I was broke, and I didn’t want to keep getting broker with age, so it was surely a good idea.

It took me a while to muster the courage to do anything with it, but just having that brokerage account made me want to understand more about what it was and how it worked. Before long, though, I dipped my toes in with a $1,000 purchase of my first S&P 500 index fund. After confirming that the sky did not in fact fall as I had feared, I set up an automatic withdrawal from my linked (ATM-fee-free) checking account to invest another $300 every month. Bingo!  And now, I’m rich! Ok … not really, but I actually have real money in my account and I’ve been able to watch grow (and also shrink, but mostly grow), and that is really cool. I’ll confess that some days it still amazes me there is any money there at all, but I promise you there is — pretty rad how that works!

This post isn’t intended to be a plug for Schwab — instead, it’s a plug for YOU. Do your own research, find a bank or service that you like, and go for it. If it’s a little scary, keep these tips in mind:

1.  Most banks offer a brokerage account option where you can manage your own investments online without additional fees. You probably don’t have to change banks to get started.

2.  If you have a retirement account through your job, log into your account and spend an hour navigating the website, learning how it works, and researching what options are available to you.

3.  If you don’t have a retirement account yet, check out Vanguard, which has the reputation of being very easy to navigate and has some of the lowest fees around. They also offer non-retirement accounts for DIY investors.

4.  Many financial management firms are not a good deal — anytime you are paying someone to handle you’re money for you, you’re spending money you could be saving. Pay close attention to fees and commissions.

It takes some patience, but trust me that this is much easier than changing your own oil. If you still don’t feel like this is right for you (or if you’re already exceedingly wealthy, or just don’t like to DIY), my next post will discuss some important considerations in finding a professional to help you. In the meantime, I’m off to check my ignition timing.




© 2015, Cheddar Pie. All rights reserved.

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