If you're going to be slinging burgers in your golden years, George Morgan wants it to be because you love the work, not because your retirement fund ran dry.
Morgan, a former stockbroker who now teaches finance to college students, wants to teach average investors — those workers dutifully contributing to their 401(k) plans — how to manage their savings so their gains won't fall short of growth in the markets.
He has created a new online resource to share what he knows. The Buttonwood Center for Investor Education right now is a blog, and Morgan is also offering seminars to small groups, both on campus and in the community. The center is named for the Buttonwood Agreement, signed in 1792 under a buttonwood tree on Wall Street to create what is now the New York Stock Exchange.
As the responsibility for saving for retirement falls more on the individual worker, people without the time or expertise to study investing are responsible for managing their own nest eggs, Morgan said.
“Most people find the investment selection process intimidating,” he wrote in a recently self-published book. “They know they lack the training and understand that there is very little room in their busy schedule to pursue it. Very few have insight into what level of performance is reasonable. As a result, you and millions of Americans are making investment decisions you don't understand.”
For those who don't want to pay the fees to work with a professional adviser, Morgan recommends taking a passive investing approach by buying index funds instead of actively managed mutual funds.
Studies have shown that, in the long run, the performance of the passive funds exceeds that of active funds, Morgan wrote on his blog.
Through the center, he aims to spread this message as widely as possible. Morgan's blog also touches on the fundamentals of how the stock market works, how various mutual funds work and perform and why to consider a strategy of “buy and hold.”
Morgan's University of Nebraska at Omaha colleague David Volkman, a professor of investment science and chairman of the Department of Finance, Banking and Real Estate, agreed.
“Investors have been poor timers, entering the market at the top and exiting the market at the bottom,” he said. “A steady inflow into an index fund will prevent investors from making poor decisions.”
Volkman is one of two members so far of The Buttonwood Center's board of directors. The other is certified financial planner Andrew Hunt, president of Guide Rock Capital Management and vice president at Gallup Federal Credit Union. Morgan is hoping to add three more this year.
The center aims for a national audience, but Morgan and Hunt admit it will be a challenge to gain the attention of investors with so many existing resources available. Hunt said they'd like to start by offering presentations to 401(k) participants through corporate benefits offices.
Morgan and Hunt said managing your 401(k) doesn't have to be difficult, but you do have to take an interest. That's the message Morgan shares with his business students.
“I tell them, this is the way you retire,” Morgan said. “The quality of your life depends on how you manage your 401(k).”
Contact the writer: 402-444-1336, firstname.lastname@example.org