Active vs Passive Investing: Why You Don’t Need an Advisor

What is active vs passive investing?

You probably don’t need a financial advisor and that could save you thousands of dollars. Here are the pros and cons with active vs passive investing. Start your journey to financial independence by getting rid of any credit card debt with the free, 7-Step Credit Card Debt Slasher.

Is active or passive investing better?

According to a new study conducted by the S&P Dow Jones Indices, not a single one of the 2,132 mutual funds regularly beat its benchmark over the last five years. And active fund managers’ returns trail passive funds consistently. So, is it worth it to pay thousands of dollars in fees to a financial advisor? Or is this something you can do on your own?

On this episode of Queer Money, we explore what the data tells us about the performance of mutual fund managers and financial advisors, explaining why we’re considering a shift to passive investing in low-cost index ETFs. We discuss how to calculate what you’re paying in fees for the active management of your portfolio and share the three factors to consider before you fire your financial advisor and switch to passive investments.

Listen in for insight on rebalancing your portfolio on your own and learn when you need the expertise of a financial advisor and when you can save several thousand dollars a year by doing it yourself!

Listen to our discussion on active vs passive investing

Topics covered on active vs passive investing

What the data tells us about the performance of mutual fund managers and financial advisors
Why we’re considering a shift to passive investing in low-cost index ETFs
What it means to rebalance your portfolio and how often you should do it
The option to do a one-time session with a financial advisor to determine the right asset allocation for your current circumstances and then execute it yourself
What you typically pay in fees to have a human advisor vs. a robo-advisor
How much we’re likely to save by firing our advisor and investing in low-cost index ETFs
3 factors to consider as you decide between active and passive investing
Calculating how much you’re paying for your financial advisor and the management fees for the funds they select
Why it makes sense to loop in a financial advisor once your portfolio hits the $1.5 to $2M mark
When you might need a financial planner and how they differ from a financial advisor

Resources on active vs passive investing

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We’re David and John Auten-Schneider, the Debt Free Guys (www.debtfreeguys.com) and hosts of the Queer Money® podcast. We help queer people (and allies) live fabulously not fabulously broke by helping them 1) pay off credit card debt, 2) become part- or full-time entrepreneurs and 3) save and invest for retirement.