Owen Raskovich

So I apologize if it's a bit of a rehash.

But the first thing, the first thing that I wish I knew about finance and investing is this.

The 80-20 rule applies.

For many of you, the 80-20 rule will be quite familiar.

But basically, it's this idea that you can put in 20% of the effort and get 80% of the reward.

And you'll see this thrown around this, I guess, rule standard or it's more of a rule of thumb, I guess, but this idea that you can put in 20% of the work at 80% of the output.

And I believe that this applies equally to people investing in the share market.

Because there is a way, and we've talked about it on this series at length, to really make investing easy on yourself, but also enjoy most of the benefits.

So what the heck am I talking about?

I'm talking about investing in a low-cost way, a way that's mostly hands-off.

I mean, you're not picking individual shares, you're not buying individual investment properties, you're not trying to get the best term deposits.

What's a way that you can do that low cost, kind of in this put it in the bottom drawer and forget about it, but also get a decent return?

Well, academic studies have shown and even industry studies have shown that investing in low cost diversified index funds and index fund ETFs, which we've discussed at length, as I said, on this series so far, can work wonders.

And I'm going to throw a hard factual statistic at you right now.

S&P or Standard & Poor's have a division of their business called SPIVA, S-P-I-V-A, and they produce research on professional fund managers.

And as you know, professional fund managers are those that pick individual shares and then they try to outperform the market or the average.

So the ASX 200 or the Dow Jones or the S&P 500, all those things that you see on the news each day, which is what we call an index or an indicee,

Those represent quote unquote the average of the stock market.

So we call that a benchmark because if you can't do better than quote unquote the average, well, should you be investing in individual shares or should you be investing in individual assets or should you just buy the market, invest in the whole entire market?

The best way to think about this is I guess you as a property owner or a renter or someone like that, you have what you have paid for a house and then you can see that go up year over year over year or down if you do it badly.