I've followed Dave Ramsey's teachings for over 10 years, so I started there. Which I know he can be pretty controversial on Reddit, but I think the general idea of his teachings are very sound and a great starting off point. Also currently reading the book The Simple Path to Wealth: Your road map to financial independence and a rich, free life. It is a great book and breaks everything down into stuff a "normal" person can understand. He also touches on real estate, although I disagree slightly with him on that but that's my personal opinion as I do invest in property. Investing isn't really as difficult as people try to make it seem. I think it can be overwhelming because there are all these different types of stocks and different avenues you can take to invest, but it is all actually relatively simple once you learn the terminology. I think that's what always intimidated me was the words I didn't know and was too afraid to ask what they meant.
As a noob this book is highly recommended for a Bogglehead view on investment. It’s really all you need to know. Once you’ve read it you can make up your own mind on your own investment style.
Making money doesn’t need to be difficult. It just takes both time and emotional strength. Best of luck my friend.
> Nun habe ich es lange hinausgezögert mich wirklich intensiv mit meinen Finanzen auseinander zusetzen.
Nachholen. Zack Zack!
Lesen: https://www.amazon.de/Simple-Path-Wealth-financial-independence/dp/1533667926 und dann auf D anwenden (US Abschnitte überfliegen), auf den Cost-Average-Effekt pfeiffen, und ab in den Gral.
Kostolany über Geld nachdenken ist auch super! Mindset.
Oder wie es /u/xaomaw/ geschrieben hat, doch mit Cost-Average-Effekt in den Markt (wenn du dich wohler fühlst).
Oder nimm nur 1/3 und ab ins Depot.
> das Geld aber immer auf dem Girokonto liegen lassen
Warum nicht? Alles fein. Dafür kannst du jetzt mit Kawuuum vieles nachholen und auch überholen. Lass auf jeden Fall noch einen Teil übrig als Puffer.
> Meint ihr es wäre sinnvoll sich jetzt "schon" ...
Ja.
> wäre es sinnvoller zu warten bis ich mit dem Studium fertig
Weil? Wenn du natürlich mit dem Geld noch fett Party machen willst, so tue es. Du bist schneller 40 als du denkst.
> Verliere ich irgendetwas wenn ich noch ein Jahr warte?
Ja. Lebenszeit.
Keine Anlageberatung.
Here’s a good book to get you started in the link below.
Brokerage and Roth/IRAs are like buckets. Stocks and bonds are the things you put in them. Each bucket has rules that apply to them. Those rules make them advantageous based on certain situations. Index funds group stocks/bonds into one stock symbol for example VT, VOO, and so on. When you invest in an index fund you spread your investment across the companies in that index fund. Hope that helps a bit. I started just 2 years ago but still have a lot to learn. Good luck!!
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_glt_fabc_VN3VMCSHWDS0WRZMC1XF
Roth - Target date Fund 2045 Brokerage - VTSAX and VHYAX
A good financial advisor is only about $15.
Seriously, it’s best to learn about investing on your own. There are a lot greedy people out there that want a cut of your life savings - so it’s really hard to know who to trust.
Even if you eventually decide that an advisor is what you need, read the book first. It explains many of the pitfalls to look out for in choosing one.
Good luck!
Read this book (check your local library before purchasing a copy), it's an easy read that won't take more than a week or two, and you'll have everything you need. The three-fund portfolios that others have mentioned follow the same guidelines.
Investing truly is simple. But the industry strives to make it as complicated as possible so you'll give up and pay them to do it for you.
Its on the recommended books section but I ordered it recently and recommend it. The simple path to wealth
You can boil down a lot of the advice in the book to stuff found in the prime directive and wiki here. However it uses a lot of sourced evidence to provide concrete examples of why those fundamentals exist. Its definitely on the beginner side of the spectrum and if you're going to try active trading and will try to convince you to just index and forget. I would definitely recommend it as even if you do want to try and become active trading so long as your base is in index and you don't start buying on margins, you should have a solid foundation to fall back on.
Read it and apply the lessons, it really is that easy. MrMoneyMustache is another great blog/forum as well.
VTSAX and chill…
I’d also recommend the “MrMoneyMustache” forums/blog. Look for user “Nords”, he literally wrote a book on military financial independence.
My entire investment strategy is based on a book my sister bought for me called The Simple Path to Wealth. All I remember from this book is to buy VTSAX. There was other stuff about not trying to beat the market, and about not pulling it out for 30 years, but all is VTSAX. VTSAX will lead me to the promised land.
Set aside 3 months expenses in an emergency fund. It can be your cash account at Fidelity.
Next, fill up your Roth to the $6K limit each year. What to invest in? The ETF "VTI" is a fine choice. VOO is fine. Pick one and keep investing $500 every month to meet that $6000 limit. Do this for the next 50 years and you'll have a nice retirement.
Have more money? Do the same in a taxable brokerage account. Don't panic sell when the market drops. It will drop significantly a few times during your investing life. It has always come back. Sometimes it takes a few months, sometimes a few years. Keep investing.
Read this book: The Simple Path to Wealth. It's one of the best books to give you a foundation for investing.
Don't let people convince you that Crypto or some other high risk investment is your ticket to millions. Later when you're a seasoned investor, if you want to have your shot at individual stocks or crypto, or whatever is "hot" at the time, keep it under 5 to 10 percent of your account incase it doesn't go well.
It’s not unless you’re planning to retire next year. The market will go back up eventually before you retire and when it does your gains will be much more than they would’ve been if the market stayed at the previous level.
You should read this book - https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Although it is US centric, I think this is a good lightweight book that gives a decent foundation in investing
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_i_QP99Z8YTTQ2MPTDTKHFK
Live below your means. Build up an emergency fund of 6-12 months of expenses. Max out all tax-advantaged retirement accounts that you have available to you. Put any leftover money you have into a taxable account with an online discount broker--don't try and pick stocks, just dump into VTSAX. Save for a down payment on a house if you want, otherwise, save up for when you eventually want to move out.
Don't forget to live your life and have fun.
Read this book:
Good luck.
Seriously - If you read - and don't have this yet!
get it and read it this week!
Simple Path to Wealth JL Collins
You want the bulk of your stocks to be just one or two low cost index funds. The most popular index mutual fund is probably VTSAX from Vanguard.
I’d read this book:
The Simple Path to Wealth https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_glt_i_YY2GRC68WWYBGS75P1P5
Read this book. The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://smile.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_glt_i_GQXE25C129GSVKSZH7WM
Once you’re done with that, read the Bogleheads wiki. Also go check out /r/personalfinance
General rule of thumb is to put aside minimum 3 months of emergency fund. Many prefer 6 and others like to see 12 months.
If you are smart and keep out of debt and don’t add other expenses you can move out. Just continue to save.
educate yourself on finances and by the time you blink you will be way ahead of the game! YNAB software, Dave Ramsey, FIRE movement all have various good info.
Also this book is a quick easy read -
The Simple Path to Wealth: Your...
https://www.amazon.com/dp/1533667926?ref=ppx_pop_mob_ap_share
Just a regular accountant who has saved $ when I could over a long period of time. I decided to invest a small percentage of my stock portfolio in Tesla about 4 years ago. Turned out pretty well. My daughter is learning investing. I bought her this book her and I recommend you read it as well. (Her husband gets the Rolex😂)
This guy wept a very popular book preaching single fund investing (VTSAX):
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_glt_i_KZTMP0PQFBDZNKAP83T3
I’d recommend starting as simple as possible. That would be:
1 Total US Stock Index.
2 Total International Stocks Index.
3 Total US bond fund
If you’re young, then most people’s thinking is that you don’t need bonds. I’m 44, and I have about 15% of my portfolio in bonds.
I’d tilt the stocks toward the US something like 75 / 25, but a lot of people go 60 / 40 and many go 100/ 0.
Selecting a broad index is going to give you the average return If the whole market and reduce your temptation to buy and sell to move money around chasing sector returns.
I’d recommend Reading this book:
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_glt_i_H31F4F68GEAW8SX1W7Q7
I think that many people would envy your situation with two pensions, 401k equivalents, and good financial discipline. You have a lot to be proud of. I want to second the recommendation to do just a little bit to improve your financial literacy, since it won't take much more and you will be set. I personally enjoyed A Simple Path to Wealth by Collins and I'm pretty much follow the passive investing approach like described at r/Bogleheads. Good luck!
This guy wrote a book for his daughter that don’t know or care about investing.
If you do what he says in this book, you’ll be wealthy by the time you retire.
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_awdo_navT_a_VGXQF1RG4XT15T33WWNB
$16. Learn how to do this yourself. It’s really not complicated at all. The financial industry has done a great job at making it sound like you can’t do it so they can charge you exorbitant fees to do what you can do yourself.
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_awdo_navT_a_A19TVMXNX3BE9NFH7Z51
You're getting ahead of yourself, in my opinion; this is like asking "what engine should I get" before you have learned what a car is or even how to drive one. Instead of asking what an ETF is, you should learn about what investing is. A good place to start is A Simple Path to Wealth by J. L. Collins, but there are many other books by authors such as John Bogle and Taylor Larimore.
In my experience, absolutely do not give investment advice to coworkers or casual friends.
I would tell him low fee index investing is the simplest way to grow your net worth, and to be prepared for volatility in the next year or two. A good book on the subject is this one: https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/ref=nodl_
Pick up a copy of JL Collins book A Simple Path to Wealth. Easy read and gives some great advice on retirement planning. The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_glt_fabc_JG707YBAY82S8093DHN7
Exactly! If anyone reading this is confused but would like to know how to invest so that you can retire, I suggest borrowing this book from the library.
ETFs for the win!
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Sadly yes, unless you can get a job that lets you work 4 10s and gives you a 3 day weekend.
Join the r/fire sub, where people help each other save/invest so you can retire early.
This book is a great introduction to the financial independence life. https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
The Simple Path to Wealth by JL Collins
Like an anti get-rich-quick book about becoming wealthy. Challenges what it means to be "rich", actually. And it's not boring.
As other have said, if this is a long term account there is no point in trying to time the market. Think of it this way: if you’re in the beginning of your retirement savings journey, any near term crash let’s you invest and buy your funds at a discount! Here’s a great book to read if you’re new to investing: https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_awdb_imm_A4TZ2SN9WHTP7JQ3CYJ7
It is never too late to learn! I am a teenager and to any people in my situation I reccomend you read The Simple Path To Wealth By JL Collins. It has taught me in a very straightforward and easy way about how the stock market works and how to take advantage of it!
It's a concept described in J.L. Collins' famous investment book "The Simple Path To Wealth" a highly recommended and often quoted book by other personal finance bloggers/authors:
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Are you trying to get educated for long-term investing to grow your portfolio and someday have a lot of money for retirement? Read this book. Applies everywhere, even The Great White North. If you continue to invest every month for the next few decades you will grow quite a retirement portfolio.
If you're trying to gamble it with huge risk, continue spending time here at WSB. Sometimes people make lots of money. Sometimes they lose it all. Consider that the stock market many are experiencing today will likely be different in a few years. Expecting 30 to 50 percent gains per year will set you up for disappointment later in life.
Se uno mira al FIRE e non ci riesce almeno diventa ricco ;-) per me la differenza sta nel cosa si fa una volta che si hanno abbastanza soldi.
Comunque dove sarebbe questo libro di MMM in vendita a 40 euro? A me non risulta esista. JL Collins lo vende a 14 euro: https://www.amazon.it/Simple-Path-Wealth-financial-independence/dp/1533667926 ma uno si può leggere i blog gratuitamente.
Tornando in tema, un esempio di "sacrifici" di questi personaggi?
Read this for how you should invest your whole life. It’s really the only way and it’s simple.
If you want to buy individual stocks do it with money you can afford to lose. It’s gambling
Forgot to add, VTSAX. I just finished JL Collins Simple Path to Wealth and after paying 1% to a firm to manage my investments I’m moving the majority to this one fund until I get closer to retirement. https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/ref=nodl_
I think those books mentioned are pretty good. However, they were geared more towards passive, low-cost investing in a savings kind of way.
Rich by Retirement is very short and instructional. It tells you what you need to do in a Singapore context. However, if you wish to see how that relates to financial independence, I do recommend also an easy read call A Simple Path to Wealth by JLR Collins.
Collins is a blogger in the United States and invests mainly in one index fund VTSAX. I like the book because he explains certain questions that I get quite a few times from readers.
If you're interested in learning about investing in index funds as a way to achieving financial independence, I would recommend reading The Simple Path to Wealth by J. L. Collins (especially if you are American; the book references a few American topics like 401k's, though most of the content is applicable to a global audience). It's a relatively short book that covers the basics of index fund investing (both the "why" and "how") without being overly dry or getting lost in details.
On Reddit, there is /r/financialindependence, but Reddit being Reddit, people can get a bit silly there.
I would really encourage you to listen to (or read, but he is a great narrator) this book: https://www.amazon.com/dp/1533667926/ref=cm_sw_r_sm_apa_fabc_baFVFbFGFP7BW
It's a very easy book to understand and it walks you through why it makes sense to invest in the stock market and how to do it with much, much, much less risk than the way those you are talking about did. I think it will make you understand and feel much more comfortable in investing as a path to a secure retirement.
The easiest answer is invest in an all-market ETF and never take out your money. If you're adding in $2500 to $3000 a month into this (or even half of that) you'll be a millionaire in 15 years or less.
I highly recommend reading this book, The Simple Path to Wealth - it will change your perception of investing from gambling into saving while earning interest passively.
> How easy/difficult is it to get a hold of stocks like Apple, Amazon and Walmart?
Very easy, perhaps too easy. You can start with Robinhood, but it's not an app for serious investors IMHO (E-Trade is, however).
What I've done so far is reading "The Simple Path to Wealth" by J.L. Collins. The book basically details how low-cost broad-based Index Funds (VTSAX in particular) are a safe bet and how they can help you get moderately wealthy over the course of several years. It's not exciting or "sexy" but the thing is, just like most things in life worth doing, there are no shortcuts.
This book has some excellent advice: The Simple Path to Wealth
I wish I'd discovered it when I was 15. It's a quick read, and will teach you about the stock market and compound interest. Understanding compound interest will allow you to roughly double your investment every 10 years, without any work.
hey dude, I read The Simple Path to Wealth by JL Collins it was recommended by several financial advice subreddits. Highly recommend you read it! It's a great primer on solid retirement advice.
I wish I would have read this when I was your age, plus Dave Ramsey, and you’ll be golden. https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
If you want real estate, invest in a REIT. You need more money to make a dent in “real assets” like real estate.
Yes it is. I will not do the explanation justice so below is a link to JL Collins book A Simple Path To Wealth where he dives into the market trends.
The short answer is that the market always goes up. If you search for a graph of the stock market showing the last 100 years, while there are a few periods where you see some big dips, over the long run it always head higher.
Check out this book... it’s worth every penny!
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/ref=nodl_
Do you have your local library app? Many libraries have it for free... mine didn’t so I bought it but lots of people in my online group got it from the library
No problem! if you are up for some reading I would highly recommend 'A simple path to wealth' by JL collins. Even if you are not on the super financial independence train I think its full of very useful information that is written in a fairly enjoyable way to read.
Sounds like you're doing great. For investing, before going to a financial advisor (some have high fees and not exactly your best interests at heart), I would highly recommend reading a book or 2. It's vastly easier than one would think to understand the principles and be your own FA. The common recommended ones are:
Firstly, have a read of the investment order for new investors.
Then, if you have an emergency fund and no debts (besides HECS/HELP), then
These are where a lot of the info in the above site came from, minus the Australian-ised part. I'd recommend them too, they're excellent.
JL Collins Stock Series
Road Map for Investing Success
Passive investing guide - Monevator
Bogleheads
If you prefer books to sites (often laid out better), then
The Simple Path to Wealth - JL Collins
The Bogleheads' Guide to the Three-Fund Portfolio
You need one book to start understanding the basics: The Simple Path to Wealth. And for some people this is the only book needed.
This will give you the introduction you need. You say in a comment that you are not american, so open a Rakuten証券 or SMBC証券 account and invest in low-cost, no-load index funds. The funds mentioned in the above book can be bought from Japanese brokers, a bit more expensive but still quite good.
If you don't know yet, learn the Japanese terms for index funds, bonds etc, the general terminology so you can manage your way through the sites, news etc.
Learn about NISA before you open any other account. If you speak japanese this book is legendary.
This guy's blog is goldmine if you plan to live in Japan for the long term: http://www.retirejapan.info/
I can go a lot more on details, but given you ask "what to invest in" that would be too much info for now. Feel free to ask anything
Check out The Simple Path To Wealth. Can't recommend the book enough.
You don't need passive income right now, you are going to be a pilot or something similar making a bunch of money soon. You need to focus on getting that fancy job right now, once you have said fancy job you need to maximize all tax advantaged accounts (HSA,401k/403b, ira/Roth IRA, etc) once all of them are maximized then start putting money in a taxable brokerage.
Risk tolerance can be adjusted for based on what you actually hold in your tax advantaged accounts.
You can access all of your retirement accounts early, if you retire early (link). I recommend reading all the madfientist posts, and bunch of Mr money mustache and ask questions once you've educated yourself there. If you want to read a book this one should be a good start.
This is not the place you learn from. https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926 This was my starting point
I wish I had this book at 18. It’s why I still don’t have $1m haha
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
I thought The Simple Path to Wealth was really helpful.
Great questions and welcome to a fantastic journey.
Are you in the US? If so, it is a very good plan to open your retirement account as a ROTH IRA. I'd suggest using Vanguard, although Fidelity and a few others would be fine as well. For various reasons, Vanguard is a favorite.
VTI is an excellent choice. It's not really putting all your eggs into one basket. It's putting your eggs in a basket that has around 3640 different companies, many of them with lots of international exposure. If you could only buy one ETF and keep it for the next 50 years, VTI is a great choice.
There are many people (myself included) that believe we have some talent to identify sectors of the market that will (hopefully) outperform the overall market for a period of time. For me, having VGT as a portion of my portfolio 5+ years has really helped my portfolio grow. The tech sector has outperformed for quite some time. As we see lately, perhaps its lead is coming to an end, or it's just taking a break. No one knows with certainty. I'm still a believe that tech will do well over the next number of decades. Some believe clean energy will do well over the next decade. Look at QCLN or PBW for example. Funds that are concentrated in one area are more volatile. You might pickup some great bargains along the way if you watch for them.
Keep it simple. I try to keep my portfolio to 3-4 different ETF's max. Any more than that and it takes too much attention to follow them and see if there's anything to be concerned about. People can get obsessive about checking on their holdings. That can be unhealthy and take time away from work and family.
Investing amounts at regular intervals is usually best. The theory is that dollar cost averaging will help you buy more shares when the price has dropped and fewer shares when the price is way up. There's been research that says putting in all the money for the year at once often leads to even better returns. It's not a big difference either way, so my advice is to have a set amount of money come out each month and invested into your Roth IRA.
Buy and hold. Don't sell. Don't sell in the dips, don't sell in the crashes, don't sell until you retire. The problem with panic selling is that most people miss the right time to get back in. They wait and wait and when it's clear the market is done going down and is now heading up...they've missed the large gains. Now a caveat would be if you sense the market is behaving irrationally (crazy high gains for weeks, months, years...sort of like now), you could try to move a portion of your holdings to something like a federal money market account and wait for the drop and then invest when everyone else is panic selling. That's a lot to try to time and it usually doesn't work well for people. However, there have been a few times when I've had some cash sitting waiting to deploy in the market and the market went way down. I bought some ETF's that I had been watching. You will likely experience 2-5 major drops in the market over your investing life. Most people lose money when they try to get out and back in.
Finally, if there's one book to read to get better at investing and overall strategy, this is an excellent one. The Simple Path to Wealth by JL Collins.
Best success to you.
Your choice of the S&P500 is a very good one. It's what I did for many years of investing. If investing is something that you really want to learn about, there are a number of books that might help.
The Simple Path to Wealth is one of my favorites. It's well written, engaging, and full of excellent advice on investing and setting your life on a good financial course. Listen to the Clark Howard or Dave Ramsey podcasts.
You mention not knowing the differences between all the different ETF's. A good plan would be to have the bulk of your investments (70%?) invested in a broad low-cost index fund ETF like VTI. I like VTI slightly more than the S&P 500 (VOO), but what you're in now is quite good as long as it's with a low-cost provider like Vanguard or Fidelity. Then as you read and learn about other ETF's, consider putting the other 30% of your portfolio in some other higher risk / higher reward ETF's. Keep it simple...I try to keep my holdings to 3-4 ETF's.
I've felt that technology would outperform the market. A few years ago I got into Vanguard's Information Technology ETF, VGT. It's outperformed the market quite nicely over the last 5+ years. Same for ARKK. As the political winds changed in the US with the new administration, I guessed that clean energy would probably outperform the market for the next few years and got into QCLN. VTI can be a set it and forget it part of your portfolio. When you add in things like technology, clean energy, etc., you have to monitor it and be willing to accept that at some point those sectors will underperform the overall market. If all this sounds confusing and not enjoyable, skip the 30% and just put it all in the low-cost index fund (VTI or VOO)
The last thing to keep in mind is that we've been experiencing a wild bull (growing upward) market for many years. There will be periods of time when the market will fall. Avoid the temptation to sell. It's scary to see your investments lose 10 or 30 percent of their value in a week, month, or year. But selling when it's down locks in those losses. And most people that panic sell miss going back into the market. Buy and hold until you retire is usually the best plan. Having some cash on the side to invest when the market tanks is another idea.
Btw, don't be too hard on your parents. They likely had no idea how beneficial it could be to start young. You can start a new path if/when you have kids with jobs.
I strongly recommend against using financial advisors. See https://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/.
If you do get a financial advisor you better make sure they are a fee-only fiduciary. Otherwise, I guarantee you'll get steered into horrible high-free funds that will rob you of a significant percentage of your returns.
Instead, pick up a copy of https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/ref=sr_1_1?dchild=1&keywords=jl+collins&qid=1597178073&sr=8-1, learn that managing your own investments is very easy, and have the peace of mind KNOWING that you have your own best interests in mind.
This book will help tremendously
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
I’d recommend these books. It’s nothing flashy. It’s just putting your money into the entire market and waiting. It will be a long time until your make money but it’s simple. You won’t get big gains but neither do most people.
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
https://www.amazon.com/Little-Book-Common-Sense-Investing/dp/0470102101
Maybe not 12% every year but close enough. Some years will be more and others will be less if you invest in a low-cost index fund.
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/ref=nodl_
https://jlcollinsnh.com/stock-series/ is free and pretty great. The downside is his blog is not particularly ordered and kind of goes all over the map.
He also wrote a book which is more streamlined. It was of no use to me by then but bought a copy as I do think he's one of the greats of the community to put all this stuff in digestable form for the average person.
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Buy VTSAX and hold it, no matter what the market is doing. Over decades (which is the timeline for a retirement account), this is the simplest and best strategy.
JL Collins' Simple Path to Wealth might be a useful resource for you, as well.
Note: if you can't afford VSTAX ($3000 minimum), buy VTSMX and when you get to $3000 in account value, convert your shares to VTSAX.
I read it on this book, but I think I have it confused with the first thing (I assume ETF) Vanguard put out. Which of course now I can’t remember
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Buy yourself a holiday present and read this book, it will explain the concepts I’m suggesting and make you wealthy one day.
Best of luck!
Congrats on graduating and on accumulating the savings!
Probably helpful if you can share the type and interest rate on the debt and if it's long-term or not. Obviously you need to have a specific plan on how you're gonna pay that off, but not all debt is "bad", and I certainly wouldn't advise just taking all your savings and putting it towards it.
I answered a similar question to yours a short while back, so basically this is my general advice:
Here are a few basic books about money to help develop a fundamental philosophy about your relationship with it and building wealth. This short list is in no way complete, but will get you started:
Your Money or Your Life: https://www.indiebound.org/book/9780143115762
The Simple Path to Wealth: Your road map to financial independence and a rich, free life: https://www.amazon.com/dp/1533667926)/
The Bogleheads' Guide to Investing https://www.amazon.com/dp/1118921283/
The Millionaire Next Door: The Surprising Secrets of America's Wealthy https://www.amazon.com/dp/1589795474/
As far as websites/blogs/free reads here's a few to consider:
http://www.bogleheads.org/wiki/Main_Page
http://www.mrmoneymustache.com/blog/
https://www.thesimpledollar.com/
Your Money or Your Life Summary https://yourmoneyoryourlife.com/book-summary/
And here's a couple more sites that might be worth checking out:
https://www.amortization-calc.com/
http://www.youneedabudget.com/blog
The key to building wealth is to discipline yourself to set aside portions of any amount money that comes in and have an automatic system to invest it and let it grow without touching it.
This is the greatest book probably ever written on that concept about paying yourself first:
http://www.ccsales.com/the_richest_man_in_babylon.pdf
As far as stock market investing, to me all you have to know and study is one name: Warren Buffett. Even though there are countless books and websites devoted to him, he's already left us nearly everything you need to know about investing right there on his simple company website in the form of his annual letters:
http://berkshirehathaway.com/letters/letters.html
Here's a recent article about how he invests: https://www.cnbc.com/2019/06/20/how-warren-buffett-decides-what-to-invest-in.html
Most people, including him and probably the authors of the above books would advise the average person or anyone new to investing just use index funds if they want stick market exposure. It's probably good advise but I absolutely also recommend learning how to invest in individual stocks the way Buffett does, even if it's just a small portion of your portfolio.
In a much broader sense beyond saving or investing, there's a unique book more than a hundred years old that discusses getting wealthy in an interesting and powerful way.
I think you can still get a free copy here:
http://scienceofgettingrich.net/subscribe.html
If you don't want to subscribe, just Google "The Science of Getting Rich" for a download or get it on Amazon.
And here's a good audio version as well:
https://archive.org/details/TheScienceofGettingRich
No matter what philosophy and path you take, I recommend setting aside a small portion (say up to 10%) of your portfolio for "alternative" investments that interests you and might have the potential to build (or at least preserve) wealth. For me it's basically precious metals, and more specifically collectible silver and gold coins.
A quick recommendation would be to start with 5% of your portfolio in precious metals, perhaps a small variety of silver bullion coins and bars and go from there. It's a great feeling to actually hold some of your wealth in your hands!
Congratulations! Things to consider...and they would vary depending on if you're talking about $200,000 or $2 million.
Don't make any decision quickly other than the Vanguard account mentioned below. Wait months to a year to figure out a house to buy.
If you do buy a house, buy one that is below what you think you can afford. People that come into a lot of money (young professional sports players as an example) go out and buy a $2M house. All is well as long as they continue to make big bucks. Someday that gravy train ends and now they can no longer afford the $50,000 a year in property taxes and other expenses of owning an expensive place.
College is great if it leads to skills that are desired in the marketplace. Technical college may be just as helpful and possibly more enjoyable.
A couple of my wealthiest friends (millionaires) buy used cars. They're wealthy partly because of that mindset. Warren Buffett (super wealthy guy) was said to still drive an old pickup truck and live in the same house he has for decades...and he has billions.
Watch out for what this does to your relationship with family and friends. Many lottery winners have had their lives ruined by what happens when they fall into money. Many friends/family want a handout and feel entitled. Consider donating a portion of your income each year to charity.
Invest as much of it as you can for the future. You don't need a financial advisor (who would really enjoy taking 1 to 2 percent of the amount you invest with him/her each year). Although stopping in for an hour or two with a "fee only advisor" might help. Just be careful...there are many people that will want to get their hands in your pockets for a share. My suggested initial investment plan: Open up accounts with Vanguard. First open up a Federal Money Market fund, then start funding a Roth IRA Brokerage Account. You can also open up non-retirement investment accounts to max out your future. Invest half of what you plan to now, the other half in a few months. That may protect you from a sudden downturn in the market. Others say just invest what you're planning to invest asap. Either way, invest in a low cost index fund or the ETF (exchange traded fund) equivalent. At Vanguard that would be the "Total Stock Market Index" symbol VTI. Then don't panic sell if/when the market falls a bit. That's the time to invest more. They'll walk you through it if you call. Fidelity is also very good. I prefer Vanguard for various reasons. Depending on your age, you can also consider a target retirement fund. At 31 you have a long road ahead of you before retirement (30+ years). You need to have the money working for you growing in the market for that time. When you get older (in your 50's) then start to balance a portion more conservative investments (some bond funds) to protect from any big downturn in the market.
There's a decent book to read on investing with really good easy to understand advice for kids through older adults. The Simple Path to Wealth by JL Collins. https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Here's an excellent road map for managing a windfall. https://www.bogleheads.org/wiki/Managing_a_windfall#:~:text=The%20National%20Endowment%20for%20Financial,treasury%20bills)%20for%20one%20year.%20for%20one%20year.)
Congratulations. Thank God above and ask for wisdom along the way.
The optimal way to grow your money over a long time period is to be a passive investor focussing on index funds.
This sub-reddit is devoted to this style of investing: https://www.reddit.com/r/Bogleheads/
I would also recommend that you check out a book called The Simple Path to Wealth by J.L. Collins. It has a scammy name, but it's actually brilliant at explaining some of the basics of investing in general and passive investing in particular.
https://www.amazon.ca/Simple-Path-Wealth-financial-independence/dp/1533667926
I don’t disagree with any of the recommendations here but I think The Simple Path to Wealth by JL Collins is the best overall book on this topic.
Try this site: https://www.portfoliovisualizer.com/ and select monte carlo (this option is free).
for your initial run just select 80% US Stock Market and 20% Short Term Treasury and then RUN. Then look at the report, it will provide you a lot and you can use this as a basis for evaluating changes you make ... lots of options.
Be sure to scroll down to portfolio success.
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The stock market in the short term (years) is very close to a random walk. Over longer periods (decades), it shows a distinct upward bias. I can predict that the nominal value of cash and near cash is close to face. I can predict that over long periods, a very large pool of stocks will be net positive and biased to increase over time with a short term distribution of value +\- 3 sigma to be 'interesting'.
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We are getting pretty far down a specific 'rabbit hole' but I think that there is real research AND real tools that demonstrate the basic points I've been making. And for most people there inclination to not want to do this type of research and to act on the basis of feelings about what is right or reasonable. And frankly a days work in a lifetime can settle this issue and then no need to really do any more 'work'.
I gave two and others of my three kids families this book: https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926 It is a simple explanation and it seems to get the point across for those who 'hate' investing and complexity, the way to go is index investing and bonds. It's not exactly what I would recommend but close enough. For my kids, it saved me long discussions and probably got the point across better. After the book made them comfortable, they tweaked Jim's recommendations to what I believe is a tiny bit better. (disclosure: I know the author)
It’s an easy read and it has all of the info you need about how to get to where you want to go.
You need to look at this from the perspective of your parents. Your description of them is a picture oof people uninterested in the details of 'investing' and unsophisticated in their approach to financial management. They are not bad, just that their interests are not financial detail. You need to recognize this ... they are uninterested and will likely never be comfortable with a plan that is 'financially sophisticated'.
Your parents will not be interested in your discussion of sophisticated financial strategies (even if they aren't) and certainly will not follow up on any 'complicated' plan. Your choices are to do the work for them forever or to find them an approach they can live with. Don't manage their finances. Your work will be unappreciated, and you will bear the guilt when things go bad. And things always go bad for a time, it is the nature of markets.
I have three very adult kids (three families). All three are very well off financially. The all work hard in their own way. One family has a member who is very financially sophisticated and can manage a complex financial strategy. The other two families are rich but have zero interest 'managing' their investments.
I helped these two families with a plan that was simple and easy to understand. I told them to read a book. The book is "The Simple Path To Wealth" by Jim Collins (a friend). [ https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/ ]
The book is an easy read that explains how to use a index fund and a bond fund as the savings vehicle and how to ignore the inevitable bounce of the market. An annual rebalance of 80/20 stock/bond ratio is all that needs to be done. Easy to understand and execute. And as a third party giving this advice, it is easier to accept than advice from a child.
The two families have adopted this strategy for several years now and seem comfortable. They don't ever look at the 'market', it is all long term money that they have no immediate need for. The bond fund is for short term needs although they have other income sources that meet 100% of their spending needs.
They have passed along the book or bought copies for the in law parents and others they know.
Just an option for you to consider.
The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life
Buy it here
For investing advice, consider getting The Simple Path to Wealth by JL Collins
TL;DR - invest in VTSAX (or Vanguard's Global All-Cap Index Fund for us UK folks)
The link doesn't work for me, but it's written by JL Collins.
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
>2. We believe we can pick individual stocks.
You can’t pick winning stocks. Don’t feel bad. I can’t either. Nor can 80%+ of most pros.
Oh, sure. Occasionally we can, and Oh My what a heady feeling it is when it works. It is incredibly seductive. Picking a stock that soars is an intense and addictive high. The media and internet are filled with “winning” strategies that feed on this delusion.
Last year I spotted a trend and made 19% in four months on the five stocks I choose. (Sigh. I still have this addiction.) That’s almost 60% annualized. This while the market was flat for the year. That’s spectacular, if I do say so myself. It is also impossible to do year after year.
Even slightly beating the Index year after year is vanishingly difficult. Only a handful of investors have been able to modestly outpace it over time. Doing so made them superstars. That’s why Warren Buffet, Michael Price and Peter Lynch are household names. That’s why I don’t let my occasional win go to my head. That’s why I let Index Funds do the heavy lifting in my portfolio.
Most people lose money in the market
https://www.amazon.in/Simple-Path-Wealth-Financial-Independence/dp/1533667926
I suggest The Simple Path to Wealth by JL Collins for your age group. He wrote for young people in mind.
Also r/Bogleheads
Simple Path to wealth is best financial advisor you can get for $20!
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/ref=sr_1_1?keywords=simple+path+to+wealth&qid=1652028126&sr=8-1
The following is taken from JL Collin blog
Start here — Simple Path to Wealth — and refer to Step 2:
2) Avoid Money Managers. They are expensive at best and will rob you at worst. Google Bernie Madoff. Seek advice cautiously and never give up control. It’s your money and no one will care for it better than you. But many will try hard to make it theirs. Don’t let it happen.
When I say Money Managers, I am also referring to Investment Advisors, Financial Planners, Brokers and the like. Any and all who make their money managing yours.
Now, I’m sure there are many honest, diligent, hard-working advisors who selflessly put their clients’ needs ahead of their own. Actually, I am not at all sure about that. But just in case, I put it out there in fairness to them.
Here’s the problem.
1. By design, structurally, an advisor’s interests and that of their client are in opposition. To do what’s best for the client requires the advisor to do what is not best for himself. It takes a rare and saintly person to behave this way. Money management seems not the calling of first or even second choice for the rare and saintly.
2. Well intentioned, but bad advice is epidemic in this field. Advisors who put their clients’ interests ahead of their own are, to steal a phrase from Joe Landsdale in his novel Edge of Dark Water, “rarer than baptized rattlesnakes.” And then you’ve got to find one who actually is any good.
3. Advisors are drawn not to the best investments but to those that pay the highest commissions and management fees. Indeed, often they are compelled by their firms to sell these. Such investments are, by definition, expensive to buy and own.
4. Not surprisingly a field that provides access to people’s life savings is a magnet for….
con men, thieves and grifters.
https://jlcollinsnh.com/2012/06/06/why-i-dont-like-investment-advisors/
This is a great book for getting started. It has some investing advice in it.
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_i_KKY2E2DBYX3P780DSJRE
Read the sidebar of this sub. Other resources are https://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/ or if you’re open to buying a book, a great pick is https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/
Read “The Simple Path to Wealth”
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://smile.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_i_0RYN0CKGMYQF2DWWXN7Q
If you're in the US and looking for just more information on long term planning, I'm fond of JH Collins Stock Series. He has a BOOK too. Neither are affiliate links -- just great information. The site pretty much contains all the same information as the book.
I'd also recommend r/personalfinance and r/Bogleheads
All great info -- even though its all outside of YNAB!
That is a good start.
Watch this - https://www.youtube.com/watch?v=T71ibcZAX3I&t=21s&ab_channel=TalksatGoogle
Buy these 2 books and start investing
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https://www.reddit.com/r/personalfinance/wiki/index
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DM me if you have any questions. I'm happy to help.
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_i_R88GPRXP3KTG6TQA1W7K
Here’s a good book for you : https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
The benchmark for the ETF you’re considering the Russell 3000 which is much broader than the 500 Index. A comparable index fund would be Vanguard’s popular VTSAX mutual fund and it’s ETF equivalent VTI.
If I was more than 10 years away from retirement then I would have no problem using the ETF you’re referring to as 100% of my retirement portfolio. Recommend you read the book The Simple Path To Wealth by JL Collins in which he advocates a one-fund portfolio using VTSAX.
Good luck!
I'm a higher than average earner who lives frugally and invests wisely.
The Little Book of Common Sense Investing
If all else fails I'll get a job as a WalMart greeter.
I started investing when I was in my mid 40s. A Simple Path to Wealth was the book that helped me understand a lot about investing. I also like to recommend reading about the Bogleheads three fund portfolio as a starting point when you are thinking about an allocation that's good for most people.
I think these two books are quite helpful when getting started:
The Simple Path to Wealth The Simple Path to Wealth
The Psychology of Money The Psychology of Money
This changed things for me: https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/ref=nodl_
I found this book a helpful start:
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
First of all, props to you for being financially responsible. I wish I’d had your mentality at 18.
I think your plan is too complex. You should open a Roth IRA at Fidelity or M1 Finance and buy two funds:
- Total US Stock index (e.g VTI).
- Total international index (e.g. VXUS).
Read these books:
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_glt_i_H31F4F68GEAW8SX1W7Q7.
I Will Teach You to Be Rich, Second Edition: No Guilt. No Excuses. No BS. Just a 6-Week Program That Works https://www.amazon.com/dp/1523505745/ref=cm_sw_r_cp_api_glt_i_79GY2ZSCQTVDCJACYXH1.
To be perfectly honest, there is not much difference. The only thing in my eyes is, one is an ETF, and the other is a mutual fund. The most important thing is just starting. I personally have Schwab and so I chose to have SWTSX. It's been great for me. Just this last year I'm up 20% this past year alone. Having a low expense ration, consistent contributions, dollar cost averaging, and time IN the market is what matters the most.
If you haven't read "The Simple Path to Wealth" I would suggest it. https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Whenever I want to do something crazy like, crypto or penny stocks, or follow the crowd "AMC" then I'll re read it. It really puts things in perspective. Hope this helps! Good luck!
Out of curiosity, what’s your income?
The fact that you care this much about retirement at 25 tells me that you’re going to do fine. I didn’t get my shit together until my mid thirties. Keep in mind your salary will most likely increase as you get older so your net worth will grow substantially as you get older. Keep your expenses low and you can retire really early.
Read this for a non-traditional take on retirement and you’ll realize you’ll be just fine. The Shockingly Simple Math Behind Early Retirement
But for starters I’d suggest taking a look at these:
Follow Dave Ramsey’s baby stepsto get started
The simple path to wealth.
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.de/dp/1533667926/ref=cm_sw_r_awdo_navT_a_TCEN5B3F0WXEZ501XS4W
The Simple to Wealth by JL Collins. I buy them in bulk and give them anyone who wants one.
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
This is the way. If you want a little more background, JL Collins book is easy to read and follow this approach.
I started investing when I was in my mid 40s. A Simple Path to Wealth was the book that helped me understand a lot about investing. I also like to recommend reading about the Bogleheads three fund portfolio as a starting point when you are thinking about an allocation that's good for most people.
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you should read this
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
it's about the boglehead philosophy of investing or in collin's words, how to get "fuck you" money.
The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_glt_fabc_D253ABJBJP30NDHZH7MN
Congrats on getting started. I'm always super impressed when people start this in their early 20s. That's way ahead of what I did.
I like to recommend reading about the Bogleheads three fund portfolio as a starting point when you are thinking about an allocation that's good for most people.
Also, if you want other book recommendations, I really liked A Simple Path to Wealth as a starting point targeted to high school and college age.
Good luck!
r/financialindependence, www.mrmoneymustache.com, and the book The Simple Path to Wealth are all great places to start. Good luck!
u/ZealousidealBat6534 ... perhaps, you can look at various videos on the subject such as from Your Money, Your Wealth guys or read books on the subject such as The Simple Path to Wealth: ...
Quick back of a napkin calculation (non-professional point-of-view), if you have $13k, invest $6k every year for the next 32 years, you will have about $629,000 by the time you are ready to retire at 67. Let's say that you (for some really crazy reasons and highly unlikely even in a governmental job) got stuck at $55k salary until you retire. You will have $44,000 for a pension. If you were to stick steadfast to your living up to 100 years old, you have $19k per year of the $629k in addition to the $44k or a nice 63k per year (assuming that we do not take into consideration COLA, because we didn't with your salary and we simply drawn down on your $629k for the length of 33 years). Drawing down $19k out of $629k is a 3% a year. Again, if we do not take inflation into consideration, then 4% returns in retirement will sustain your 3% draw down! In other words, without inflation, rmds, taxes, your investment will stay intact, no?
Let's say:
1) Next year, you increase contribution to $6500/year for 31 years and stay at $6,500, at an average 6%, and your 457 is at $19,780 = $672,757
2) Two years after that, you decided to increase contribution to $7,000/years for 29 years and stay as is, at an average of 6%, and your base 457 is now at $35,614 = $708,449 ... and so on.
So from my untrained and novice eyes, time is on your side and you control this ride. As I indicated before, get yourself to a good debt-free place before you retire and continue to contribute and build up your contribution as your salary grows. If you get 1% raise, increase your 457 as much as your allowance has it after all necessities are accounted for (even as little as $500 per year). Figure out your destination and then plan for it as appropriate. Educate yourself on the planning. There are plenty of good to great videos out there. Avoid the short-cuts such as quick, high returns timing of the market, because, you'll pay dearly if you miss the boat. Good luck.
I’d recommend you read or take a listen to this book and then make your own conclusions.
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/ref=nodl_
I read a book that used this calculator. It really is great to see how it’ll grow in 10, 15, 20 years.
I think he said money should double every 7 years. So check this to see, in like 20-21 years, you could have $1.2m.
Fwiw the ETF he talked about was VTI, which averages about 11.5% return a year. If your index isn’t doing that, consider switching. It’s a low fee index fund
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
This is the book Im talking about:
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Hey OP. Recommend checking out the "Simple Path to Wealth". Really goes through and explains the reasonings for investing your money like this (in VSTAX and total market funds). Apparently, the book started out as a series of letters to his daughter about investing and I found it straightforward to read.
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This book includes good advice about investing and more...discussing living below your means, investing for the long-term, reasonable expectations etc. It's an excellent read for your son...and you will probably enjoy it too. The Simple Path to Wealth.
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
My dad bought this book for me 30+ years ago and it helped me understand that anyone can retire well if they start early and work their plan. The Wealthy Barber. https://www.amazon.com/Wealthy-Barber-Updated-3rd-Commonsense/dp/0761513116
Have him give a listen to the Clark Howard podcast and Dave Ramsey. You can learn a lot by hearing them answer questions. It's also helpful to hear how others got into trouble with debt.
Start with some great books. This is one of my favorite:
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Others like Jack Bogle's "The Little Book of Common Sense Mutual Fund investing" and "The Intelligent Investor" by Graham will give you a good foundation.
I also started in my teens and learned much along the way. Suggest keeping a sizable portion in VTI and then take on more risk with 20 percent of your funds. My higher risk portion includes ETF's like VGT, ARKK, ARKG, ICLN. There was a period of time where I had 10+ funds and a dozen individual stocks. Way too much to follow and I've learned to keep it as simple as possible with just a few ETF's.
Don't sell in a crash or downturn, buy more when everyone is selling. Dollar cost average in each month and stay the course.
Find a friend that also has investing experience and you can learn from each other. There are a few really wise people on this sub as well as ETF. You'll figure out who is gambling and who is investing for the long term if you read enough comments.
Best wishes for a prosperous life driven by compound growth!
You're you and investing which is a great first step. Keep it simple with 2-3 ETF's and keep investing each month.
When the market drops (not if, but when), don't sell. Buy more. There will be a few significant market corrections during your life. Think through how you'll handle them now before they come. Most people that sell because of fear lose more money than those that hold on...because they miss some or most of the recovery.
Low cost index funds are the least risky and often one of the best ways for long-term growth. Consider 50-70 percent of your investment going into VTI or similar. The higher costs of many other funds/ETF's will eat away at your profits over the long term. Consider 20 percent in VGT.
Take 30 percent of your money and consider other more risky investments like ARKK, ARKG, etc. Higher risk can lead to higher reward. The ARK funds have enjoyed an amazing run for the last number of years. They may continue to outperform the market. They are risky. Sometimes risks pay off.
Read this book: https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926/
The advice in the book is excellent. He's very wise and talks about much more than what ETF to pick. One of my favorite books for beginning investors as well as the ones that have been doing it a long time and wasting money on high expense ratios or fees.
Open up a brokerage Roth IRA account with Vanguard and max out your Roth each year. VTI is a great ETF to buy (It's the equivalent of Vanguard Total Stock Market Index). Keep investing, especially when it drops a bit. Over the next 40 years you will appreciate the compound growth. Select VTI or a similar low cost index fund from Vanguard.
Consider the same for your non-retirement investments.
Live below your means all your life and then live however you want in retirement.
Many (most) 403(b) plans from public/education sectors are horrible investments. High fees, poorly run, etc. A 1% fee will eat away more than 40% of your possible growth over 40 years. That's why Vanguard and a few others would be a better option.
Like to read? One of the best books on financial skills imo: https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
How old are you? If you're under 40 or 50, it may make sense to get that money into a Roth IRA for the long-term and an enjoyable retirement. Money invested has often doubled every 8-10 years. Then you don't have to worry about tax consequences and can experience tax free growth and tax free distributions in the future.
In the meantime, if you're not well versed in trading, consider opening up a Vanguard brokerage account and buying:
80% VTI (the ETF of Vanguard Total Stock Market Index)
20% VGT (Vanguard Technology Fund).
Those two are excellent low cost funds that have served many well.
And if there's a downturn, DON'T panic and sell. Buy more when there's a big dip.
Also, read this book: https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Excellent to see you starting young! I started near the same age and have enjoyed investing for a few decades. Compound growth over many years can make you wealthy.
There are a couple books I'd suggest you read soon.
The Simple Path to Wealth by JL Collins
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
And
The Little Book of Common Sense Investing by John Bogle
https://www.amazon.com/gp/product/0470102101/ref=ppx_yo_dt_b_search_asin_title?ie=UTF8&psc=1
You can attempt to beat the market and have success some of the years with individual stocks or specialized mutual funds or ETFs. The tax complications of frequent trading, and the high fees associated with some funds give rise to an idea: The way to make and keep the most money over the long term is to buy the overall market with an ultra low cost index fund (with a mutual fund like VTSAX or the ETF equivalent VTI).
Some of the wisest investors with millions invested follow this strategy. I've followed it for years and keep a portion of the portfolio to play with (my play money goes into VGT and I'm considering adding ARKK or ARKG).
As you get older and have more to invest, watch out for people that want to get your into various investments. They can have high fees or be crappy investments. You can do this well all on your own and do it well if you read up. Just sort out the difference between long term investing and short term stock trading. There are plenty of very wealthy people that use the low cost index fund approach.
Startup a Roth IRA as soon as you have earned income. Let it grow for 40+ years and you'll be happy you started early. Vanguard is one of the best companies to partner with on your investment journey. Low cost and customer owned.
Seek wisdom and you can succeed.
>being tied to one country and that the currency between the UK and US will have something to do with the returns
The second video I linked I think talks about that in good detail.
>Do you know what average return difference is usually between a global fund and a specific one like the SP?
Well, past performance isn't an indicator of future performance. That being said, here is a tool that you can use to do different backtests.
I currently have all my investments in 100% US equity. I am planning on holding forever.
This guy has a great book and a great Google talk. Check it out.
Awesome! Now go read this book. It will explain how you should be investing your money and one day will make you wealthy.
The book A Simple Path to WealthA simple Path to Wealth would be a great place to start.
See also the Bogleheads at https://www.bogleheads.org/wiki/Getting_started
Read The Simple Path to Wealth by JL Collins The Simple Path to Wealth: Your road map to financial independence and a rich, free life https://www.amazon.com/dp/1533667926/ref=cm_sw_r_cp_api_fabc_-tcWFbVAZ0FEF
All in. Alles was du an Ausschüttungen verpasst.
https://www.amazon.de/Simple-Path-Wealth-financial-independence/dp/1533667926/
The Simple Path to Wealth: Your road map to financial independence and a rich, free life (J L Collins)
> Let it ride! (J S Collings)
On Tuesday 20 of October we have a live event with JL Collins, the author of The Simple Path to Wealth, one of the go-to books for the FI and index investing communities.
JL Collins is also very famous for his Stock Series and is sometimes referred to as the godfather of FI 😊
You can join for free and ask him questions! More information and free registration here.
And tomorrow (Tuesday 13 of October), we have a community meetup where we will talk about the various index investing brokers and platforms available to us in Belgium. This is usually quite useful to very beginners. Free to join as well!
Information on Facebook: https://www.facebook.com/events/359242198771998
And on Meetup: https://www.meetup.com/FIREBelgium/events/273691905/
The Shockingly Simple Math Behind Early Retirement : Blog post explaining the math behind FIRE (it's not complicated)
The Simple Path to Wealth : book written by former investment broker. The simpler your investments and the less you mess with them, the better.
Fantastic! Max out your 401k and traditional IRAs and invest the rest in a taxable brokerage account. You are off to a phenomenal start (financial job?) but you can continue this trend by not succumbing to lifestyle creep (the more you make the more you spend) and investing for your future. I wish this book was around when I was just starting out. It doesn't matter how much you make, it matters when you can choose to do whatever you want to do. Take a look here when have some spare time.
forget all that- just read the Simple Path to Wealth: https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Genuinely curious if you’ve heard of or read this book and what your thoughts are on it? https://www.amazon.com/dp/1533667926/ref=cm_sw_r_sms_awdb_btf_t1_5mOsFbJ8K65MD
I'd recommend the Simple Path to Wealth by JL Collins. He is big in the FI/RE community, but for normal people he is a bit extreme (recommends saving up to half your income). He gives the advice a "rich old uncle" would give a young couple.
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Unless you have a complex financial situation, you don't need an advisor. In fact, you are far better off managing it yourself if you don't have a lot of wealth as a financial advisor will cost a lot of money.
Read this book linked below. He's not selling any products at all: no courses, no workshops, nothing. It's just a book. In fact, you can read his blog and get all of the info for free, it's just edited and more condensed in the book.
Spend some time on /r/personalfinance if you don't know anything about personal finance then move to /r/financialindependence
Also, check out Mr Money Moustache. His blog is amazing and his message is empowering.
https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
Remember, no one will care more about your money than you. By the time you know enough about personal finance to ensure that your advisor isn't ripping you off, you know enough to do it yourself. It's really not difficult.
>Why is everyone on Vanguard?
Honestly, because of John C. Bogle, founder of Vanguard. His investment philosophy, his creation of the first index fund, his insistence on reducing broker fees, and to have Vanguard be customer owned?!?! He's a real fighter for the individual investor! But that was a while ago and now other brokerages have competitively lowered their fund fees with similar performance.
>They all seem similar and Fidelity actually has some great funds that beat the S&P. Any thoughts?
You're actually correct. For me, the biggest draw towards Fidelity was the relatively lower (zero) expense ratios and no minimums to invest in their funds. Plus, if I want to use my "fun money" for day trading, ie. Forex, options, etc...Fidelity has that too and much more. Fidelity is basically a "one stop shop" for investments.
>Haven't invested in mutual funds yet, still learning and collecting info.
Here's my John Bogle-styled retirement portfolio:
Roth IRA = FZROX [90%] + FXNAX [10%]
That's it! Simple setup for aggressive growth.
To help you along in your learning, I recommend reading, "The Simple Path to Wealth" by JL Collins. Also, here's a few links for you to nibble on.
https://www.bogleheads.org/wiki/Fidelity
https://ziefi.com/wiki?name=FidelitySetup
https://ziefi.com/wiki?name=FXAIX
Hope this helps!
Hey! I ran the numbers you listed and this is what I came up with.
With your current expenses, you need $1,044,525 (with 4% rule) or $1,378,773 (3% rule) to retire. With your current income, you can reach the first number by 2035 (age 52) and the second by 2038 (age 55).
As for investing, check out this flowchart for where you should invest your money. As for what to invest it in, either read The Simple Path to Wealth by J.L. Collins or just go all in VTSAX if you are really overwhelmed.
Looks to have a bunch (1300) of 5 star reviews on amazon. Thanks for the heads up!
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Maybe we should all do a favorite book list post!
Yes and Yes.
You might benefit from this book I am reading. Good stuff. Some states have no income tax and some have upward of 10% income tax. Re income tax, america has a odd tax system controlled by the ultra rich. It is progressive where the more you make the more tax you pay, but if you are super rich and set up your income in certain way, it falls into a category called capital gains, and then you pay a very low tax rate, even though you might be billionaire.
https://www.amazon.com/gp/product/1533667926/ref=ppx_yo_dt_b_asin_title_o01_s00?ie=UTF8&psc=1
The Simple Path to Wealth by JL Collins (book)
JL Collins - Stock Series (blog)
There’s nothing in the book that’s not in the blog. The book is just better organized since it didn’t come organically like the blog.
The Simple Path to Wealth by J.L Collins
The Simple Path to Wealth by JL Collins https://www.amazon.com/gp/product/1533667926/
It is more about investing but aimed at your age and very readable.
Check out these books :) Lots of good info
I'd start by looking at this webpage: https://www.reddit.com/r/personalfinance/wiki/commontopics This breaks down the steps of that flow chart for you. The simple flowchart is amazing for beginners.
I would then look into this blog. it has many useful topics but this post in general is a simple intro to see if you are interested in it: http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/
If these topics interest you I recommend this book. https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Best of Luck.
Read this tomorrow! https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926
Or ... you could read books that are not based on half-truths and fallacies that will lead you to a range of unnecessary and easily avoidable risks.
Here are a couple of suggestions
The Simple Path to Wealth - J L Collins
The Bogleheads' Guide to the Three-Fund Portfolio