The Examined (Investment) Life

Philosophers at various times have concluded that the unexamined life is not worth living. This is true (maybe some soul searching is in order), but it’s relevant to our conversation because the same is true of personal finance. Lots of people spend money, but not as many people manage their money. Without regular close inspection, things will go awry in your wallet and portfolio. And when it comes to making your money work for the future, passive investment usually isn’t good enough.

Passive investment is the standard model for the average investor in the western world. In this way, people set aside money in IRAs and 401(k)s in hopes that they’ll have enough money when they retire to live comfortably. The problem is, this doesn’t work out for most people. Over half of Americans do not invest at all. Among the other half, most don’t invest enough. There are social safety nets which are in place to help make retirement less challenging, even for people who don’t have enough invested. But it’s often not enough to preserve a lifestyle or keep life free from worry.

This is for a number of reasons, the chief of which is that passive investments don’t work well when they are completely passive. Many people watch their money steadily grow over decades only to lose a lot of it at the last minute when the market takes a sudden tumble. A simple allocation change from stocks to bonds would eliminate this possibility, but most people don’t even know what that is. For this reason, people who want to start investing should learn some of the basics and/or get help.

One of the ways to get help is to avail yourself with some of the simple software solutions meant to help you better track the complexities of your growing investment life. An excel budget spreadsheet, such as the Spreadsheets at, is something that is familiar to most. It’s an example of a simple way that people can take a close look at the money they spend. It has been an integral step for many people in the journey to financial health, and it’s something more people should adopt.

Many modern software solutions work in a similar way. They provide analysis of what you’re invested in, how it’s progressing, how to protect yourself against worst case scenarios, and what to expect for the future. Services like the one linked above and alternatives like Betterment save you a lot of steps. Most of the information they provide is readily available, but accumulating it takes a fair amount of work. Even learning how to accumulate it takes work. This keeps a lot of people from truly examining their investment life, and this alone is costing millions of people a lot of future security.

Start now and make sure this doesn’t happen to you. By creating a specific plan about how to get from your current location to a secure retirement through investment, you’ve got to be involved. Software makes it easy, but you’ve got to take the steps to make it happen.

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