Chapter Three: The First Move
After three weeks of research paralysis, Ethan called Dave, an advisor who works with WIA members. Dave’s question: “When you started installations, did you wait until you understood everything? No. You learn by doing.”
They met the following week. “Tell me where you’re at,” Dave said.
Ethan exhaled. “I make decent money. I know I should be saving for retirement, but I don’t know where to start.”
“Do you have employees?”
“No. Just me.”
“So you’re a sole proprietor. You’ve got options that W-2 employees don’t have, but no employer match. So, where do you start?” Dave leaned back. “The honest answer? Almost anywhere. Because the biggest mistake you can make right now isn’t picking the wrong account. It’s picking nothing.”
Ethan was stunned. “But what if I pick the wrong thing?”
“Most of the decisions you’re worried about aren’t permanent. You can change your contribution amount. You can switch strategies. You can adjust your portfolio. The only thing you can’t change is time.”
Dave slid a piece of paper across the table.
“See? Most of this is flexible. Time isn’t.” They talked about what made sense for Ethan’s position. “I’m not going to tell you what to do,” Dave said. “But I’ll help you understand your options so you can make an informed decision. And if it doesn’t feel right later, we adjust.”
“So I don’t need a long-term commitment?”
“Not at all. You just need help making the first move.”
That shifted something. Dave wasn’t testing him. He was helping him start. By the end of the meeting, Ethan had a plan. Not a perfect plan. Just a plan.
He’d open a SEP-IRA. Start with a modest contribution. Use a target-date fund because it’s simple and doesn’t require decisions he wasn’t ready for yet. And if it didn’t feel right in six months, he could change it.
“You’re going to feel uncertain for a while,” Dave said. “That’s normal. Investing doesn’t give you the same feedback as your work.”
“So how do I know if I’m doing it right?”
“You keep going. That’s how you know.”
Two days later, Ethan made his first contribution. He logged in that evening. The money was there. Not doing anything dramatic. Just sitting there, quietly working. His wife leaned over his shoulder. “That’s it?”
“That’s it.”
“How do you feel?”
“Relieved.” Not because he’d figured everything out. But because he’d spent three weeks trying to find the perfect way to start. And in the end, starting was the only thing that mattered.
Interlude: How an Experienced Financial Advisor Can Help
The decisions you’re afraid of are almost always reversible. You can change amounts, strategies, and portfolios.
The only thing you can’t change is time. The first decision doesn’t need to be perfect. It just needs to be made.
If you’re stuck in the research phase, you don’t need perfect knowledge. You just need to start. That’s what we’re here for.
Chapter Four: The Panic
Ethan had checked his retirement account four times that morning. Each time, the number got worse. The financial news said the market was down 9% for the month.
His account was down 12%.
He’d put in $2,250 over three months. The account was now worth $1,980. Rachel found him at the kitchen table, laptop open, face pale.
“What’s wrong?”
“I screwed up.”
“Your retirement account?”
“It’s down twelve percent. The market’s only down nine. I picked the wrong fund.”
“Didn’t Dave say this would happen?”
“He didn’t say I’d underperform.”
Rachel was quiet for a moment. “You want to call Dave?”
* * *
Dave’s voice on the phone was calm. Almost amused. “Let me guess. You’re looking at your account balance right now.”
“How’d you know?”
“Because the market’s down and you’re three months into investing. This is exactly when people call. How much are you down?”
“Twelve percent. Market’s only down nine.”
“Can you come by the office? This conversation works better with a whiteboard.”
* * *
Twenty minutes later, Ethan was back in Dave’s office. “Let’s talk about why your account is down twelve percent when the market’s down nine.”
Dave wrote on the board:
Market: -9%
Your account: -12%
Gap: 3%
Ethan stared at the board. “So it’s not that I picked wrong?”
“You picked a target-date fund. It’s designed to be diversified. Sometimes that means it moves differently from the S&P 500. That’s not underperforming. That’s diversification doing its job.”
“But I’m still down more than the market.”
“This month. Let me show you something else.”
“This is what the stock market actually does. Not in theory. In reality. Every single year.”
“So this is normal?”
“Completely. Sometimes your fund drops more than the market. Sometimes less. Over three months, that variance means almost nothing. Over thirty-two years, it averages out. What matters isn’t whether you beat the S&P this month. It’s whether you’re still contributing next month.”
Ethan felt something unknot in his chest. “So I didn’t screw up.”
“You didn’t screw up. The market dropped, and your fund dropped a little more because of how it’s structured. That’s different from making a mistake.”
Dave capped the marker. “Can you come back tomorrow? There’s more to this I want to show you.”
Ethan and David are fictional characters, illustrating situations that might occur in the real world. There is no implied buy or sell recommendation.
If you become unglued in down markets, don’t worry, stay the course — you don’t need perfect knowledge. You just need to stay invested.