A few weeks ago, a few women got together to discuss finances and their attitudes toward money management. Saving money by using coupons at the supermarket didn't come up. No one recommended buying a used car instead of a new one, to save money.

Why is that? Well, maybe because these women aren't exactly in the middle class. They met on a yacht. They are five very successful women, including broadcaster Lesley Stahl and columnist Liz Smith, and they started the www.wowOwow.com website. Still, I found much of what they said rather relevant to the rest of us.

For one thing, most of them seemed ambivalent about money, and not too interested in keeping close tabs on their investments. ABC Nightline co-anchor Cynthia McFadden explained, "I want to have enough to pay the bills, but I'm not really interested in it." Let's face it -- that's how it is for many of us. Do you really want to learn how to read financial statements and annual reports? Do you want to crunch numbers as you evaluate companies? For lots of people, men and women alike, the answer is "no." There's nothing wrong with that, and it doesn't mean you'll end up poor.

You can simply choose to invest in some mutual funds -- perhaps putting the bulk of your moolah into a simple index fund or two and then adding some top-notch managed funds, as well

Bonds vs. stocks
Several of the women explained that they're invested mostly in bonds, and that they like the safety and stability of that. That's fine -- if you already have all the money you'll ever need. But if you're earning $50,000 per year and need to build a nest egg for retirement, bonds won't get you too far too quickly.

Check out these compound average annual returns between 1925 and 2004, per Ibbotson Associates:

  1. Small Company Stocks ... 12.7%
  2. Large Company Stocks ... 10.4%
  3. Long-Term Government Bonds ... 5.4%
  4. Treasury Bills ... 3.7%
  5. Inflation ... 3%

Growing at 5.4% annually, $50,000 will become $186,000 in 25 years. Growing at 10.4%, it will become $593,000. That's a big difference -- some $400,000. If you already have enough to live off for the rest of your life, then go for bonds -- heck, you can probably even just stick your money in several hundred coffee cans buried in your backyard. But if you're looking for growth, look at stocks and funds. The Masters' Select International (MSILX) fund, for example, has averaged a market-beating 10.7% return over the past decade, and includes the following among its top holdings: Petroleo Brasileiro (NYSE:PBR), Toyota (NYSE:TM), and Teva Pharmaceuticals (NASDAQ:TEVA).

Individual stocks can give you great returns, too. For example, here are some average annual returns over the past decade:

  • Chevron (NYSE:CVX): 11.2%
  • Oracle (NASDAQ:ORCL): 18.6%
  • Alcoa (NYSE:AA): 8.2%
  • Amazon.com (NASDAQ:AMZN): 14.2%

None are risk-free, though, which is why it's good to diversify.

Stocks rock
Publishing giant Joni Evans was the only one to mention having significant stock holdings, adding that she's "had an average 15% growth annually." She explained that her sister is a financial professional, and her sister's firm handles her investments. This can be a route worth exploring for many of us. If you don't want the responsibility of managing your own investments, you can have someone do it for you, for a fee. Just be sure they've got your best interests at heart and are good -- many pros get compensated with commissions for selling you things you may not need. Evans explained: "You don't have to watch [your investments] every day. All you have to do is know someone who'll watch for you. It's like you can't color your own hair, you have to know a good colorist."

But there's more to it than that. Yes, it's very good to let talented people help you with things you can't or won't do on your own (dentistry, anyone?). But it's also good to learn something about the topic, and to keep your own eyes on the ball -- to make sure the professional is doing a good job, at the very least. McFadden noted that several people she knows have been betrayed by trusted professionals.

So tend to your finances, friends. Learn more about money management, to start with. We offer a lot of easy-to-understand information. If you'd like to leave the nuts and bolts of investing to someone else, then you might want to consider mutual funds, and do some research on those you think might match your investment needs.