One morning about two months ago I woke up and thought: I should look at some investments I made several years ago on the advice of someone who seemed to know things. So I went to the account and started trying to figure out what it all meant. Mostly I was clueless but not so clueless as to not understand that numbers in red are bad.
What were these symbols? What the heck had I invested in? And why, exactly?
I decided to investigate.
The first thing I did was watch some youtube videos about investing over the long term. Some of them are just straight-up rude (the secret Jewish way?). Others are like: what’s the big deal, just be clairvoyant! In one extremely popular video, the guy, who’s like 25, says there are three common mistakes people make. I forget the first two but the third was: people put money in their accounts and then do not actually invest the money. So it just sits there year after year. I thought: what kind of a dufus would do that?
I’m sure you see where this is going…
Okay, so then I was more than a little humiliated and chastened. I researched some more and decided I needed to talk to one of these money managers. No offense, men, but since no way was I going to get mansplained about money, I decided to find a woman to talk to. Turns out this isn’t so easy! Every person Fidelity seems to have on offer at every branch in NYC is male. Eventually, I found someone at a branch that was nowhere near me. But it seemed worth it so I schlepped all the way up there and even though she was nice and not outwardly judgmental—though she clearly pitied me—she could not tell me anything that did not involve her actually doing my investing for me, which I don’t want. What incentive does she have to make good choices on my behalf? The measly percentage she gets of my measly portfolio?
Plan B: I will figure all this out on my own.
I realize this sounds nuts if we’re talking about day-trading—think Elon Musk lost a lot of money percentage wise?—but I was thinking of just a long-term strategy. The kind of investing you check in on maybe once a year.
And yet, as a freelancer: so many questions. What is a SEP? What is a solo 401k? What is a Solo 401k with a Roth option? What is a backdoor mega roth? (If you’re hearing sexual innuendo here, you’re not alone). What is a long-term gain? What are the capital gains tax brackets for short and long term gains? What is a limited trade? A stop limit? What should I even invest in? How do I invest? Like, literally, what buttons do I press? How much can I invest in a solo 401K with a roth, which is about nine times more complicated than the instructions for an IRA? What companies even offer a solo 401k with a roth? Which is better: a roth or a traditional retirement account? How do I calculate my net income for a 401K contribution? How do I open these accounts? Two applications? Are the accounts connected? How do I connect them? What is profit sharing? What is an elective deferral? What is FXNAX and FSMAX and FZROX and FXAIX and FSKAK. Pronounce them with the right accent and they all sound like arthritis cream.
I sent my accountant a million questions. He ended up having to research some of them on his own. Meantime, having just set up a new LLC this year and realizing half the accountants I spoke to did not know there was a city business tax associated with an S-Corp (what the hell is an S-Corp? What is an LLC, for that matter? More research…) I felt like I just don’t trust anyone. Which is a really stupid position to take because, what, suddenly I am an expert with the idiotnet to back me up?
After two months of reading and googling, I finally felt like I understood the basics. And then I had a 30-minute consult with a lovely female from Merrill who helped me make some final choices. But still. Nuts.
I’ve heard the argument that a liberal arts education is pointless because how often is Derrida really going to come up between trying to pay the bills and change a diaper? My rejoinder has always had something to do with the advancement and expansion of your mind being the most practical thing a human can do.
And yet.
Why am I 48 and so clueless about something as hugely essential as money and how to make it grow? Because I am female? Because money is anti-intellectual? Or because no one teaches you this stuff? It’s just not a standard part of the curriculum. Which is so short sighted since if everyone started investing at 21 (or earlier), retirement and old age wouldn’t necessarily be the terrifying and financially ruinous proposition it is today.
Meh.