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Read This Before Buying Any Financial Services: SPDR S&P 500 ETF Trust (SPY)

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Last week, while perusing the comments section of various Fool articles — especially this one — I was reminded of just how difficult it can be to make sense of all that is available in the investment world.

In order to help give a picture from 50,000 feet — instead of focusing too much on the details — I thought I’d share what I view as the four options one has when attempting to save and invest for the future.

8 Sector ETFs for 2013Before offering these four goals, however, I highly suggest reading this Carl Richards piece. In it, Carl argues that, “instead of spending so much time searching for the best financial product, we’re much better off taking the time to reflect on what is really important to us and then aligning our use of capital with those values.”

Keeping that framework in mind, consider these four options:

Option 1: Don’t invest your money in stocks
We all have parents, grandparents, or great-grandparents that went through the Great Depression. For many of these people, putting your money in anything riskier than bonds or money market accounts is akin to gambling.

The flip side of this approach — as has been demonstrated time and again — is that over time, the yield you get will likely be eclipsed by the rate of inflation, thereby shrinking your purchasing power. Of course, if you’ve got a lifestyle that could accommodate such circumstances, then — by all means — utilize this approach.

Option 2: Give your money to the “pros”
The second option, which is probably the most popular for the majority of Americans, is to let the professionals handle your retirement money.

If you’re someone who lives well below your means, and would much rather have someone else handle your money while you enjoy life, then this may be the approach for you.

As with the first option, however, there are two important drawbacks. The first is that — after fees — the vast majority of actively managed funds underperform the market at large. The second is that, even with you paying as “little” as 1% in yearly fees, over the course of 40 years, you could surrender as much as 25% of your potential retirement savings.

That’s a lot of money to pay if it’s underperforming the market!

Option 3: Regularly invest in a whole-market ETF
This, Fools, is probably the wisest decision for any investor who wants an easy investment plan without having to do all the homework. Buying shares of SPDR S&P 500 ETF Trust (NYSEARCA:SPY) — which mimics the movements of 500 of the largest companies traded on the markets — would be an easy way to accomplish this.

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