Free for 90 days: Sign up now and get 90 days managed free after your first deposit. See offer details

<title>Dismiss</title>
Financial Goals

Investing Lessons I Learned From My Family

We all learn lessons from our families, including lessons on how to invest. Unfortunately, most of the lessons I’ve learned from my family regarding investing provide insight into what not to do.

Articles by Miranda

By Miranda Marquit
  |  Published: November 20, 2012

We all learn lessons from our families, including lessons on how to invest. Unfortunately, most of the lessons I’ve learned from my family regarding investing provide insight into what not to do.

Rene Redzepi and family, Photography by Ditte Isager for Bon App.

My Family Didn’t Talk about Investing

The first time I ever even heard the word “mutual fund” out of my mother’s mouth (I still haven’t heard it from my dad) was when I was in college, and my mom told me that she had opened accounts for each of my younger brothers, and that I should consider opening a mutual fund account.

My parents didn’t talk much about money in general, other than to encourage us to save and to avoid debt. And investing never came up. So I had no idea about investing, except for in a very vague way. I knew there was a stock market, and that’s about it.

The very first lesson I learned about investing from my family is that you should talk about investing with your kids. My 10-year-old son already has a better grasp of the importance of investing than I had at the age of 18. He’s already investing in a 529 for college, and as soon as he gets a job in a few years, it’s Roth IRA time.

Let your kids know about the importance of investing in wealth building, and talk about it. Get your kids involved, and let them hear constructive and age-appropriate discussions about money. They’ll have a better understanding of how money works, and start off on the right financial foot later.

Other Lessons Learned from My Family’s Mistakes

Later, I came to find out that the mutual funds opened by my parents for my brothers were actively managed. They had sales loads and charged a fee of more than 2% a year. Just looking at the way that eroded my youngest brother’s returns was enough for me to swear of managed funds once I learned about index funds.

Another important lesson I learned was about diversity. My dad’s retirement account consisted mostly of company stock. When the company tanked, so did my parents’ nest egg. It still hasn’t fully recovered. I learned that some measure of diversity is important, and that it’s especially dangerous to put all your eggs in one basket – especially if that basket is the company stock basket.

My family also made investing sound difficult, and I have since learned that it doesn’t have to be so hard. Get started as soon as possible, use dollar cost averaging, and make use of index funds, and consistency over time can be one of your greatest allies.

I love my parents, and my family. However, I wouldn’t take investing advice from my family members. While I’m not exactly a guru, I have learned, from watching their mistakes, what I can do to improve my own financial situation through the power of investing.

Recommended Content

View All Resources
Investing in Your 30s: 3 Goals You Should Set Today

Investing in Your 30s: 3 Goals You Should Set Today

It’s never too early or too late to start investing for a better future. Here’s what you need to know about investing in your 30s.

How to Prioritize Your Financial Goals

How to Prioritize Your Financial Goals

If you identify all your financial goals for investing, you’ll likely find you can’t fund them all at once. Get our expert view on how to start prioritizing them.

Redesigning How You Manage Your Finances at Betterment

Redesigning How You Manage Your Finances at Betterment

Our new design represents a synthesis of a large body of customer feedback. We hope it meets your expectations.

Explore your first goal

Safety Net

This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.

Retirement

Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.

General Investing

If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.

Smart Saver

You could earn 20X more than a typical savings account with our low-risk investing account for your extra cash.

How would you like to get started?

Your first step toward a smarter investing future starts here.

Create a Betterment account

Go ahead and join the smart, modern way to invest.

See what we can do for you

Tell us a bit about yourself, and we'll show you the benefits of investing with us.

Get a free investing checkup

Help us get a sense of your investing approach and see how you could improve.

Transfer a 401(k) or an IRA

Move an existing retirement account into a Betterment IRA.

Download the mobile app

Enjoy the Betterment experience anywhere on the go.

<title>Close</title>

Search our site

For more information and disclosures about the Betterment Resource Center, click here. | See our contributors.