Save. Spend. Splurge.

Investing Series: How Should Most People Invest Their Money?

This is a part of the Investing Series.


Short answer:

In index mutual funds.

Just read this to see what the difference a little change in the Management Expense Ratio (MER) makes.

Stick 10% – 25% of your pay into index mutual funds, diversified over your country (for me, it’s Canada), the U.S., Internationally and in Bonds, and you’ll be fine.

Long answer:

I don’t want to flog a dead horse, but I’ve been reading about index funds and investing in them since 2006.

I am clearly not an investment guru, so I direct you to Mr. Warren Buffett, Rainmaker Extraordinare, who is universally accepted as being a smart, SMART guy about money and investing:


May 6 2007 (Reuters) – Warren Buffett said on Sunday most investors are better off putting their money in low-cost index funds…

A very low-cost index is going to beat a majority of the amateur-managed money or professionally-managed money,” Buffett said at a press conference….

Buffett, worth $52 billion according to Forbes magazine in March, also said investors shouldn’t flock to increasingly popular hedge funds, where managers typically receive a fixed fee plus a percentage of profits.

“The gross performance may be reasonably decent, but the fees will eat up a significant percentage of the returns,” he said. “You’ll pay lots of fees to people who do well, and lots of fees to people who do not do so well.”



Still not convinced?

Then read this book: Index Funds: The 12-Step Recovery Program for Active Investors.

(It’s only $3.16 as a Kindle edition!!!)

STILL not convinced? (OMG.)

Read this book: Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School.

Already convinced, are doing it, find it boring and want to learn about other investing strategies?

Then stick around.


  • Cassie

    I guess this means I’m sticking around 🙂

  • Sarah Li Cain

    I love your investing series BTW. I’m actually going to invest in index funds and some bond funds. Been slowly moving my money from Canada and have procrastinated about the whole thing lol. I can’t wait to read more of your series!

    • Mochi & Macarons

      Glad to hear it! I’m writing the series less for PF bloggers and more for people who aren’t into money or thinking about it all the time, so I really like hearing feedback on how it’s going and what people are learning.

  • Suki

    I am feeling like I’m grasping this investing thing. FINALLY. Haha.

    Question: If you live within the US (like I do), are you just diversifying over just three areas (US, International, and bonds)?

    • Mochi & Macarons

      Yes. The U.S. is considered a good benchmark to invest in.

      International can mean Europe, Asia, Emerging Markets (BRIC nations like Brazil, Russia, India, China), or a mix of all of the rest of the world (you have to read what they have in the portfolio to know where your money is weighted).

    • Mochi & Macarons

      OH and you can also invest in Canada too 😉

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