When I was having babies, I came up with what I called "the billboard theory" of pregnancy health. At the beginning of my pregnancy I was overwhelmed with information. Someone said I could only eat certain kinds of fish, someone else said I couldn't have deli meat, my aunt said she couldn't go to monster truck shows because of emissions, I was like crap there are 1,000,000 things to know!
Down the street from my house there was a billboard. It had a picture of a baby, and basically said "Don't drink alcohol when you're pregnant." I was like okay. Got it.
I realized that there will always be a million controversies and ways to debate everything, but the world does settle in on agreeing to SOME things. And those things will be so big, you can't miss them. So don't worry about the weird new little closet opportunities you might be risking or missing or sweating... when in doubt, pay attention to the big thing.
Which is also why I invest in FZROX.
FZROX is a total market index fund available only to Fidelity investors. It was started in 2018. Fidelity already had a total market index fund at the time... FSKAX, which started in 1997. If you've read The Simple Path To Wealth, you'll read about VTSAX at Vanguard. All the funds track roughly the same stocks and are based on the same idea.
When you buy into FZROX, you buy into a little over 2500 stocks. A tiny share of thousands. The main point of "Simple Path To Wealth" is that this works great as an investment because over time the crappy companies will fall off, but the good ones will double, tripled, quadruple. It's the stock market so it will go up and down, but over the past many decades it has always recovered and found its way back up.
FZROX was introduced as a fund with 0% expense ratio. This means there's no skimming off the top of your returns. Every year, VTSAX skims .04% off your investments, which is very low but still a little higher than zero. If you have $10,000 invested, it's $4... really nothing to worry about. FSKAX is .015%. Some funds have expense ratios closer to 1% and people really freak out about losing $10 per $10000, so Fidelity came out with the zero funds as a loss leader. They don't care about making money, just want you to use Fidelity so you can invest in other funds or services, and that's fine. Grocery stores do this with milk - they know we pay attention to milk prices, so they'll price it so low that you'll go there and once you're in the door they make their money on other things.
I love the book "Simple Path To Wealth" and it's frequently suggested in finance groups, but it's pretty much a love letter to Vanguard and doesn't mention FZROX which is weird. So whenever I recommend it, I add an asterisk... consider FZROX whenever the author mentions VTSAX. Same idea.
I proved to myself in my 20s that I was terrible at picking individual stocks and it turns out I'm not alone, most people are terrible at picking individual stocks. Almost nobody can beat the market. So now I just invest in the market, and that means:
- Opening a Fidelity account
- Depositing money
- Hitting "trade"
- Buying FZROX
Done.
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