The Best Time to Start a Financial Plan is Now
by Tricia Bush, CPA, CFP® Owner, AAA Advisory LLC
Part 2: how to start Investing
What to Buy and How to Keep it Simple
A Conversation With Theresa, a New Investor
Theresa is brand new to investing. She and her spouse want to start building a nest egg for their family, but every time she logs in to an investment account, she feels overwhelmed.
Theresa:
I understand where I should invest now from last month’s article, like retirement accounts, but I completely freeze when I have to pick investments. What should I actually buy?
Tricia (CPA, CFP®):
First, let me tell you, that feeling is normal. Almost everyone feels that way at the beginning. Most people worry they’ll pick the wrong thing, miss the next big opportunity, or make a mistake they can’t undo. I felt the same way when I started.
The short answer is: You’re not looking for specific stocks. You’re looking for a small number of broadly diversified, low-cost funds that give you exposure to the global market.
Most successful investors don’t win by finding the perfect fund. They win by keeping things simple and staying consistent.
The Types of Funds
Theresa:
There are still so many fund choices. How do I even narrow it down?
Tricia (CPA, CFP®):
Here’s the simple version:
Mutual Funds
Mutual funds pool money from many investors and are managed by professionals. Some are actively managed, which usually means higher fees. They can work well, but costs and consistency matter.
ETFs (Exchange-Traded Funds)
ETFs are similar to mutual funds but trade like stocks. Many ETFs are designed to track an index and often come with lower fees.
Target Date Funds
Target date funds are all-in-one portfolios that automatically adjust over time, becoming more conservative as you get closer to retirement. They are simple, diversified, and require very little maintenance.
If you want something really easy, target date funds are often a great place to start.
How Do I Actually Choose?
Theresa:
When looking at a list of funds, what am I really trying to find?
Tricia (CPA, CFP®):
You’re looking for maximum diversification with very few funds—and ideally, low fees.
For most long-term investors, the goal is to own: U.S. stocks, International stocks, and Bonds.
In real life, that often means just two or three funds.
For stocks, many people use one total U.S. stock market fund and one total international stock market fund.
Together, those two funds give you exposure to thousands of companies around the world.
For bonds, a common approach is one total bond market fund, sometimes paired with an international bond fund.
All major brokerages—like Vanguard, Fidelity, and Schwab—offer these types of funds. The names differ, but the idea is the same: broad diversification at a low cost.
Fees matter more than most people realize. Lower fees mean more of your money stays invested and working for you over time. Aim for overall fees, called expense ratios, under 0.20 percent.
What If I Want to Keep It Really Simple?
Theresa:
That still feels pretty intimidating. Do I have any other options?
Tricia (CPA, CFP®):
Then keep it even simpler.
If you’re just getting started, even a single S&P 500 index fund or target date fund can be a reasonable way to begin. It helps you get comfortable with investing while staying diversified.
It doesn’t have to be your forever plan. It just has to get you started.
And, honestly, starting matters more than optimizing.
Why Simple Portfolios Work
Theresa:
So, it’s okay if my portfolio isn’t complicated?
Tricia (CPA, CFP®):
It’s actually better for most people.
People rarely fail because they picked the wrong fund. They fail because they panic, jump in and out, or constantly change strategies. Remember when COVID-19 started, it was scary not knowing what was going to happen, and some panicked and pulled money out of their investments. But by doing so, they likely missed out on the growth that occurred shortly after.
Simple portfolios are easier to stick with. And the strategy you stick with is the one that works for you.
There’s no prize for complexity. The goal is steady, long-term progress.
Stocks, Bonds, and Time
Theresa:
How do stocks and bonds fit together?
Tricia (CPA, CFP®):
Stocks help your money grow.
Bonds help provide a stable income when the market is down.
When you’re younger, you usually hold more stocks. As retirement gets closer, bonds slowly become more important.
You don’t have to calculate this perfectly. Your job is just to stay invested.
Theresa’s Starting Point
Theresa:
So what should I actually do next?
Tricia (CPA, CFP®):
Pick one diversified, low-cost fund and start.
That could be a target date fund, a total market index fund, or an S&P 500 index fund. Start small if you want. The amount matters far less than the habit.
Once you’re invested, something changes. You gain confidence. You start paying attention. You start building that nest egg for your family.
Investing isn’t a single decision. It’s a long relationship with your money.
Final Thoughts
Theresa didn’t leave this conversation with the “perfect” portfolio. She left with something better: a simple plan she could actually follow.
And that’s what real investing success looks like.
Not perfection.
Not complexity.
Just consistent, patient progress.
Start simple.
Keep costs low.
Stay invested.
Let time do the heavy lifting.
Disclosure: This article is for educational purposes only and is not intended to be investment, tax, or financial advice. Investment decisions should be based on your individual financial situation, goals, and risk tolerance. Consider consulting with a qualified financial professional before making investment decisions.
