“When you use the wrong financial approach, it doesn’t matter how much money you make,” said Dr. Edward Chang, professor of finance at Missouri State University. “You may not be able to have a comfortable retirement life.”

Chang – who has published nearly 50 articles during his career – researches investment vehicles for the everyday investor.

His most recent research focused on exchange-traded funds, or ETFs. These are like mutual funds. ETFs pool together investors’ money, and give small investors what only institutional investors could do several decades ago.

“It’s really a blessing for small investors because they can’t buy a lot of stock with small amounts of money,” said Chang, an early researcher on this type of investment vehicle. “In the pool, they can.”

But no investment vehicle is without flaws.

“When I began looking at ETFs, I got excited about them, and then many in the investing public got excited about them. They grew beautifully to the extent that I think we may have overdone it,” he said. “Many different varieties came out, small niches, kind of like a fad.”

Looking out for the long term

One of Chang’s goals is to have long-term financial security and happiness – and to pay that forward through education.

According to Chang, the key is to first save your money and then invest for the future.

“I think the most important thing I’ve learned in the past 20 plus years is that saving has been underrated and investing has been overrated,” said Chang. “We always think ‘Well, I should invest in the right thing.’ But I think, more importantly, we should save first.”

Learn more about his analysis