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A checking account is for paying your bills, that is it. You are correct 20K is way too much. IMHO the best place to put it is into a mutual fund of an IRA. Now that you no longer have an active 401K you want to talk to a retirement specialist about setting up such an account. You can roll your old 401K over into it as well.
You don't want your emergency fund in a vanilla savings account either. Put it in a money market account ( not the mutual fund kind ). You will only get a few shekels in interest, but the money will be liquid.
Read a copy of Get A Financial Life. It is written for people who aren't interested in reading about money, but it teaches you the basics of personal finance.
A very good reddit for advice on personal finance:
/r/personalfinance
Since you are going to own a small business you might want to read up on money management for that too.
Read the book Get A Financial Life. It is written for people who don't like reading about money and who are just starting off with managing their personal finances.
Get A Financial LIfe by Koblinger - teaches basic personal financial management up through setting up money market accounts. Written for people who do not enjoy reading about finance.
Your Money Or Your Life - "philosophy of money" that will help you think about money in new ways that will lead to more happiness, and early financial independence on a small income if that is your wish.
/r/personalfinance
So first she guilts you for your DH not paying for her birthday dinner and then tries to guilt your DH into buying her an overpriced mirror? Yikes.
You said she makes six figures but squanders it? Buy her a budgeting book for Christmas! I’ve heard Dave Ramsey is good! Lmao
The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness https://www.amazon.com/dp/1595555277/ref=cm_sw_r_cp_api_i_Y2tfCb3313DFT
Tell her all about how you love his budgeting system and you incorporate it into your lives completely! You thinks it’s so great you just have to share. But then again I like being helpfully passive aggressive lmao
Couple quotes from The Psychology of Money:
"Like everything else worthwhile, successful investing demands a price. But its currency is not dollars and cents. It’s volatility, fear, doubt, uncertainty, and regret—all of which are easy to overlook until you’re dealing with them in real time."
"It sounds trivial, but thinking of market volatility as a fee rather than a fine is an important part of developing the kind of mindset that lets you stick around long enough for investing gains to work in your favor."
Highly recommend this book. Managing your own psychology is critical to successful investing.
Provided you've got an emergency fund / buffer, holding (or buying if you can) is the right thing.
https://www.amazon.ca/Millionaire-Teacher-Wealth-Should-Learned/dp/1119356296
also
Stop Over-Thinking Your Money by Preet Banerjee
There are a bunch of good Canadian finance reads but I would start with those 2.
Do you honestly think that a 4.3% move down from ATH 3 weeks ago is significant?
Sorry, but I think you should do some reading. I'm not kidding. This book is good:
https://www.amazon.com/Random-Walk-down-Wall-Street/dp/0393352242
Don't get a financial advisor.
The Millionaire Teacher is a great book on the basics of investing and the theory around it. It's actually a great read, not dry or overly math-y.
After that check out Canadian Couch Potato, it has model portfolios and other great resources.
It's really not that complex. If you want to be super hands-off, you could use a "robo-advisor" like Wealth Simple which would handle virtually everything for you, and it would only take a super small percentage of your investment gains (I think 0.5% versus 2-3% for most financial advisors).
The numbers still aren't stacking up for me. I think it's clear that you have a spending problem. I'd really recommend reading Your Money or Your Life to help you work on your relationship with money.
> The medical insurance for me is worth a bit as I have a $17k surgery every couple of years.
I'm sorry to hear that.
Get A Financial LIfe. A personal finance book for people who don't like reading about money and who are just starting out in the world.
In general you should establish an emergency fund before you move onto other financial projects. Ideally, you should be able to live off of your emergency fund for 3 months should you lose your job or otherwise be unable to work.
Save money. How? Spend less than you earn.
You might think I'm being facetious, but I'm not. If you can't seem to achieve it, I would personnaly recommend this book: https://www.amazon.com/Your-Money-Life-Transforming-Relationship/dp/0143115766 It's a classic, and it'll almost certainly get you to reconsider to money habits.
The Only Investment Guide You'll Ever Need wikipedia link, here's the Amazon page.
You are probably old enough to read this book
The Psychology of Money: Timeless lessons on wealth, greed, and happiness https://www.amazon.com/dp/0857197681/ref=cm_sw_r_cp_api_glt_fabc_GEGATR7JAMGR84MYBJNW
I found it very informative when I started learning about all this stuff
https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393358380
One of the main points driven into me back during my finance undergrad was that timing the markets & day trading always trends towards proving no better than pure randomness. Chartists & TA is fun but is about the same effectiveness as picking stocks via dartboard or chimpanzee.
This was a good book recommended to me by one of my professors that really does a great job of putting the argument to rest mathematically. The best thing you can do is to find a fundamentally sound investment, some valuable asset that has is growing. And just DCA along the way.
Wow. Well, if anything is going to turn this thread on its ear, it’s going to be this. But since you asked (not an affiliate link):
The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness https://www.amazon.com/dp/1595555277/ref=cm_sw_r_cp_api_glt_fabc_VSCMH970KZMXHWPVCG26
I prefer the audio book. Listened to it twice, which I highly recommend since you tend to grab on ideas as you go and the second listen makes sure you get things in the correct order.
We also have the print edition to bookmark, highlight and take notes in.
Buy your partner a copy of Your Money Or Your Life.
It's never going to work for you to pay them to run your business whilst you retire, because they'll see it as unfair that you're getting money when they're doing all the work.
There are nearly always resentments when you mix business with friends and family, as the reasons are the same as in inheritance disputes. People rationalise things by saying "but we're family" and "I'd do the same for you" or "I need it more". People often rationalise "what's fair" based on their own needs and desires because they don't recognise their own bias.
Your partner is probably going to expect you to carry them in retirement, because they know you're ok for money. They don't see the sacrifices you're making now or their own wasteful spending. I very much suspect your partner wants their cake and to eat it - most people who spend their money on "fun" crap lack the foresight to appreciate how their current spending is costing them the future.
Longer. IMO, the book that really got it moving was Your Money or Your Life which was published first back in 1992, although I think it was a few years later that I read it. Still a great read, I bet, now that it's updated.
Get a Financial Life: Personal Finance in Your Twenties and Thirties by Beth Kobliner -- personal fiance for beginners written for people who don't like reading about personal finance ( not dry ).
- Pay off your debts first, you will never get a better return on your money
- Next, establish an emergency fund, enough to pay all of your bills for 3 months.
- Start and try to max out your 401K
- Further invest in mutual funds through IRAs find a firm in your area
- After 1-4 you are ready for stocks, invest only what you can live with losing
Use the reddit search bar, there are subreddits on this topic like
/r/personalfinance
I would recommend The Psychology of Money. It is an excellent book on how different people have different goals. Something that makes perfect sense to you makes no sense to somebody else. It is good to be smart with money but getting the highest possible pay or returns is not everybody's goals.
Read <em>A Random Walk Down Wall Street.</em> Totally mind blowing and inspirational.
The tl;dr is that after accounting for the high fees charged by the managers of actively managed funds, they almost never beat the market over the long term. Low fee index funds almost always put more money in your pocket.
But please buy and read the book. When your done with it, give to someone else who needs it.
I would read The Psychology of Money. It's a quick read. The parts I found particularly interesting are those about the difference between getting wealthy (which you seem to be good at) and staying wealthy (which you hope to do). If you are asking for a sanity check, you probably already suspect that your current investment pattern is not for you. But I don't know you, so I can't say that for sure. It's not for me.
Get a Financial Life is my favorite personal finance for young adults.
Bogleheads is the place to go for investing. Very beginner friendly. The videos are super cheesy but very accurate and unbiased.
> Well, that’s a lie I buy stuff I don’t need all the time.
You might find the book Your Money or Your Life helpful.
Rich Dad Poor Dad also works for some people - lots of Kiyosaki's advice is based on his personal backstory which turns out to be fictional, but if it changes your attitude to money then it may well be worthwhile.
Short of being born with a trust fund, there are no shortcuts when it comes to money - believing there are (or might be) is what leads people into addictions to gambling, shopping and speculative investments.
don't need one, just read this book.
It sounds like you have a great start already. Bogleheads is my strategy and is generally recommended. Definitely keep an eye on your ROTH options, these are great when you are on the lower pay scale and not as good when you get up higher. Maxing your 401k (depending on options and employers) is usually the best strategy, but there is a flowchart to decide this.
I generally recommend maxing your HSA instead of your IRA, but it depends on the ROTH / 401K scenarios I described above. The HSA is really just a super charged IRA and it is AWESOME.
DO NOT WAIT FOR A DETAILED RETIREMENT PLAN. DO NOT. You are doing great right now! And it is so critically important that you keep up on it. Early years to compound your decisions are the most important. This book is generally a good help too.
Depending on how things go, I'll probably have to work longer than I want for healthcare. On the other side, I'll be financially stable enough to pick a more "fun" job for the health insurance. So it won't be too bad.
I agree with u/AverageKidInRussia . Stoicism urges us to clarify our thinking regarding externals like money. Money is useful and helpful, but it is not the goal of life. You should never compromise your character to get it and if you are fortunate to have it, you should use it wisely.
Spending it on things you enjoy is fine, as long as you don't attach your tranquility to the items. I think it was Epictetus that told a story of buying a really nice fancy lamp, that then gets stolen. He replaced it with an average lamp, that would both be less tempting for a thief and also affect his tranquility less if lost.
Another concept to keep in mind is memento mori. We will all eventually die, and we can't take money with us. I once read a story about a man who worked really hard, put all the extra hours at work away from his family, building his fortune, telling himself: "I'll enjoy it with my family when I retire". He died suddenly in a car crash before retirement, never getting to enjoy his wealth, and having sacrificed time with his loved ones.
Less about Stoicism, but still relevant: read Your Money or Your Life by Vicki Robin. Her approach to budgeting is spot on, in a nutshell, at the end of the month you review how much you spent in different categories and decide if you feel the enjoyment you got from those expenses were worth how much you spent. If the answer is no, then do less of that activity next month. Over time, you'll end up with expenses you'll feel comfortable with and saving money on the things that are low value to you.
I don't think it is fair to reference lentils and 'extreme' fire without providing a link to the source: early retirement extreme. The blog is good too, but the book is just wow.
The book that started it all for me was The Wealthy Barber. It is finances but set in a story dialogue, barbershop talk. Pretty interesting and never got boring for me.
Total Money Makeover is another good one. Pretty clear cut plan. Dave Ramsey's plan is rock solid, but his conservative views and preachiness get old after a bit. I still like his youtube show though.
Personal finance 101 for people who don't like reading books about money:
The next step is to build an emergency fund that you can use to pay all of your bills for 3 months ( better make it 6 in this Trumpconomy ).
After that, max out your 401K contributions and start retirement planning/saving.