the gist: an index fund is the simplest, lowest-maintenance way to invest (and it often outperforms picking individual stocks). it’s just a bundle of companies packaged together to match a specific market list (called an index). basically, you’re buying a ready-made group of stocks that all belong to the same category.

trying to “beat the market” (meaning your investments made more money than the overall stock market during the same period) is hard. as in only 5% of people manage to do it over the long-term hard.

thankfully, you don’t have to be part of this 5% to have a high-performing portfolio. instead, you can just buy the whole market, or buy a whole slice of the market, in one move.

and that’s what index funds do.

when you hear index fund, think: the whole market or part of the market, wrapped into one investment.

an index fund is simply a garden for your money. instead of planting one flower and hoping it thrives, you plant many.

some bloom early. some take longer. one might not make it. but the strength is in the mix. the entire garden grows. and new, healthier plants get added in over time.

and just like you can dig up a dying plant and replace it, an index fund does this automatically, companies that fade out get removed and replaced.

here are a few quick definitions:

individual stocks: buying one company.

etfs: a basket of many investments you can buy like a stock.

this sounds a whole lot like an index fund, right?!

you know how people say a square is a rectangle but a rectangle is not always a square? okay so most index funds are etfs, but not all etfs are index funds.

here’s the difference: an etf buys and sells like a stock, its price changes throughout the day, and you can trade it anytime the market is open. an index fund, on the other hand, is a type of fund that tracks a market index and only trades once per day, after the market closes.

so, how do you pick between the two? or do you even have to?

you don’t really need to choose. they do almost the exact same thing (with a difference so marginal it’s not worth losing sleep over). most people (including myself) just buy the lowest-fee option their brokerage offers and call it a day.

mutual funds: a basket of investments managed by a person or team.

with mutual funds, someone else is choosing what to buy, what to sell, and when (or at least choosing your mix of investments), which means you’re handing over the steering wheel and paying for the ride.

and now a moment for me to get on my ~soapbox~: you shouldn’t outsource something you don’t understand at least a little bit. outsource to save time, not to avoid learning.

target date funds: a “set-it-and-forget-it” fund that gets safer as you get closer to retirement

pick the index fund that matches your brokerage. most brokerages have their own version of the same index fund and choosing theirs usually means no extra fees. they all track the same thing. the only difference is where they’re housed and what they cost to own (which is typically very similar).

I can’t (or won’t?) stick to a budget. I’ve tried so many times. the paid apps. the free ones (in exchange for your data). the spreadsheets I’ve spent hours building. none of it sticks.

and I like to think that it’s not because I am disorganized or financially reckless. all the important things are automated: my monthly transfer to my high-yield savings, short-term investments, medium-term investments, long-term investments, rent, utilities…you get the point.

but everything in between? your guess is as good as mine. it feels intuitive….or so I tell myself. but it still makes me wonder: am I more type b than I think? do I get bored easily? do I just not care enough to track things that closely? again, your guess is as good as mine.

money doesn’t stress me out the way it used to (which is a good thing). I’m not budgeting from fear anymore and I’m not trying to control every detail.

I think it’s because this is my actual goal: I don’t need to know every number. I just want my money ~generally~ headed in the right direction. I want the structure to exist without me hovering over it.

so instead of tracking every purchase, I’ve landed on something simpler: a money audit. not monthly. not daily. just a quarterly check to make sure I’m directionally correct. this is where my woo-woo brain kicks in.

I prefer what some may call a ~hands off relationship~ with my money. set a few guidelines, automate the things that matter, let it run, adjust when needed (during my quarterly audit). I honestly think that when you stop gripping so tightly, things flow more naturally. like…basic economics, right? a free-flowing system tends to be healthier.

could someone make a strong case for detailed budgeting? absolutely. and you won’t catch me arguing with them.

here’s a silly little analogy for the way I think about the role of money in my life: money is the gas in my car. it’s not in the driver's seat, and it’s not yelling instructions from the passenger seat. it fuels what I do, it’s necessary, and I need to be aware of it (insert my gas meter that is perpetually below E). but I don’t need (or want) to know every single detail.

now, have I reached peak financial nirvana? heck no. I am ~far from it~, so money is still very much on my mind, but I check on it when I need to and let automation do its thing in the meantime.

the takeaway isn’t to scrap your budget or to be ~blissfully unaware~ of your finances (because the little things will and do add up). but I feel fairly in tune with my spending internally and with enough process and automation in place as guardrails, I’ve chosen to pump the brakes a bit on intense budgeting.

I prefer the term ~certified credit card enthusiast~ and I have a bulky wallet (full of credit cards) to prove it.

now, I’d be doing a disservice as someone with this self-proclaimed title if I didn’t first say: credit cards are not for everyone. but for brevity, I’ll leave it there.

what credit cards you should open really depends on what you’re looking to do with the rewards: travel, cash back, shopping, etc.

when it does:

when it doesn’t:

there’s been a lot of chatter around just how agreeable chatgpt is and it’s pretty startling. not just when you play around with it and realize it’s literally mirroring your energy at all times and treating your premise as truth, but also in very real ways around the world.

but this made me think…is this really any different than the conversations we have with most people around us?

now, this is a generalization and not a rule. I have plenty of people around me who will shoot me straight, but they’re few and far between. for the most part, I think we live in a society where people genuinely want to be agreeable. we all want to be liked (or at least I do?). we want to affirm the people around us. and especially in a business setting, people are trained to “yes, and” their way through conversations to keep things moving.

so, in a weird way, chatgpt might not be doing anything new. it might just be mimicking how we already talk to each other, just with more consistency, fewer facial expressions, and no social stake at hand.

exciting update of the month: I am getting a tattoo! per usual, I’ve talked myself in and out of this (nearly microscopic) tattoo for the last few months. and after all of this thought, here’s the conclusion: we’re on a floating rock, so does it really matter? and! nearly everything (but especially a tattoo) is reversible.

now the part where I tell you what made the cut to be permanently on my body?! a cherry tomato vine (pictured below). and here’s the short story: I grew up picking cherry tomatoes with my grandpa. to say that he was someone I admired deeply would be the understatement of the century, so a tattoo in his memory it is!

and thanks to all of my tattoo friends for offering this very important question as I considered where I wanted to put the tattoo on my body: is it something you want to see everyday? the answer is no (for a variety of reasons that won’t appear here), so it’s going on the back of my arm! sort of where it’s at in this picture.

in other news:

I recently posed this question to my uncle and it’s been on my mind since, so I wanted to offer it to you all before I tell you a couple of things I’d like to buy:

to be pondered!

thanks for being here. if this resonated, share it with someone who’d find it useful :)

see you in december,

aaliyah aramjoo

disclaimer: this is not financial advice or otherwise affiliated with kcrise fund.

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