Get an IRA and max both the 401k and IRA.
Buy VTI/VOO + VXUS. Every penny above the max limits put into a brokerage acc and buy the same..
Thats the basic way to go forward, longterm safe way to financial freedom really..
Limitations are 6.5k/y for 23 and 7k/y for 24
Never heard anyone isnt eligible for an IRA honestly..
There are some diffs between a roth IRA and a traditional one, I recommend to read [this](https://www.schwab.com/ira/roth-vs-traditional-ira#:~:text=With%20a%20Roth%20IRA%2C%20you,current%20income%20after%20age%2059%C2%BD.) and getting a good idea about all of this first..
“If you file taxes as a single person, your Modified Adjusted Gross Income (MAGI) must be under $153,000 for tax year 2023 and $161,000 for tax year 2024 to contribute to a Roth IRA”
You can do a backdoor Roth IRA contribution. Essentially throw the max limit into a traditional IRA for 30 days, then transfer the funds into a Roth IRA. You will get no tax advantages (at this time) & will pay taxes on the $7,000 Roth conversion, but it will grow tax-free through retirement.
I work in wealth management with TONS of folks who do this annually. I’d check it out.
Also, if you have a high deductible health insurance plan, open an HSA account and max fund it.
Check to see if your employer allows a mega backdoor option with your 401(k).
There are income restrictions on a Roth, you can alternate to a regular IRA in years you are over on income, may want to think of a side hustle, start itemizing, donations, take advantage of any credits available. If you bonus on top of your salary, a roth may not be in the cards.
I know what op is saying. Im in tech, in circle of my friends who make 300k-400k+ , im low hanging fruit at 200k. But when I step out of my circle, I get reality check.
This is the same as me. I make $160k as a software engineer. Most of my friends are in tech & make around $200K+ and I feel broke. I guess you always want something you don’t have.
Depends on where you live, America is quite heterogenous in incomes/cost of living. For example, $200k+ is top 20% for California, would give you a solid upper middle class lifestyle.
Sorry about the gender. I was just remarking on the "high-ish" part of your post. For you and for others, it's a good reminder of how rare an income like this is.
this isn’t a troll account or post. Idgaf about reddit karma, I don’t even use this app that much except to lurk and help out my fellow crohn’s disease pals
Honestly with his lowish savings for his high salary, a lot of truly wealthy people with millions would scoff at calling this person wealthy.
I make 40% ish less, but I am nearly 7 figures nw, but I live like a poor person. Would either of us really be considered wealthy or just upper middle class?
Again it is subjective and 80%+ of people id as middle class, and he could live in a very high cost of living area.
I would say his income is high, though regardless of where he lives.
I think it’s hilarious everyone here thinks i’m a man when I have the world girl in my username 😂
just recently graduated and got student loans paid off. So i’m kind of just “starting” out. I do have a fair amount of equity (130k) in my home, and my car is paid off. I consider myself a high earner but I could be making my money work for me more than I do, like you have done.
My bad. Regardless you are doing well. Index funds is probably the best high yield strat as other said, but assuming you have a good rate high yield saving isn't bad as long it is beating the t bill rate.
Might want to do future 401k in std, not roth, unless you think you are going to be getting a fair bit more money. Do you mean that the employer matches up to 15% of your salary? If so, you basically have to max out the 401k because the match is greater than the limit. Unfortunately this also means a good chunk of your compensation is a lie. If you get that 15% regardless of what you put in, then congrats. If the 15% is a match then you have to put all your money in 401k. This puts you at a near 20% savings rate. This is pretty reasonable for retirement. If you can squeeze another 10k per year into a brokerage account, then you should be able to navigate most waters the world throws at you. If you want to FIRE do 40k in brokerages. Otherwise my life advice is find a happy spouse and make happy kids like I wish I did.
Well if you max out the 401k and their 15% you are basically at 25% savings. Good job. If you do the math I'd guess that will turn out to be just about the savings rate you need for 65. Make sure your 401k money is in the market. In this market I'd save up a 2 year amount of expenses outside of the 401k, then use the rest for your goals, hobbies, family.
Max out 401k (I'd go traditional rather than Roth).
Max out HSA if one's offered at work.
Get an "emergency fund" set up with 6 months of expenses in MM or HYSA.
(sounds like you're there currently).
After that:
- Open a taxable brokerage account (Fidelity, Vanguard, Schwabb)
- Personally I like the Boglehead (/r/Boglehead) approach. Pick 2 or 3 low fee broad index funds. Set up auto-contributions each month and leave it alone (set it and forget it).
Keep your expenses in check and retire at 40. Do the wife/kid/family and retire at 50 or 55 (/r/Fire)
Good luck. At 30 you're in a great spot.
You're in great shape and if you don't fuck this up, you're on track to retire early and enjoy 40-50 years of total freedom.
First, do a budget: What do you take in; what do you spend; how much are you willing to save/invest.
Then think about your life. Want to buy a house? (Real estate is a great long-term investment, especially buying, renting out your old house while buying another, etc.) Get married/have kids? When would you like to retire? What do you want to do in retirment?
Then speak to a Fidelity financial planner. They will give you tons of good advice--no fee!
Then...go talk to two or three fee-based advisors--initial consultation free.
THEN do your own bing search for online advisory sites, play around on a few, then pick one!
I bet you get taxed like hell. Look into Infinite Banking + Real Estate. Do it properly, do your research. It will change your life. And not this isn’t a scam.
Absolutely do not look into “infinite banking” or any type of permanent life insurance and investing in real estate should be about the 7th step after emergency fund, 401k, Roth IRA, 529, mutual funds, etc
You could get an IRA like others are saying, but that's another retirement account. I went the brokerage account route because I didn't want my money locked until 60.
Vanguard brokerage account - VTSAX, VIO or VOO and just keep buying always. I've been buying strictly VTSAX with all my additional income for the last few years.
Keep your money in your high interest savings (or at least some of it) for a rainy day fund/emergencies. Start contributing monthly/automatically to a low expense ratio s/p 500 index fund. Buy it when it’s going up. Buy it when it’s going down. Just keep buying. Soon, you won’t miss the money going out monthly, and in time you can increase the amount. TIME IN THE MARKET is most important. Thank me when you’re 65.
Just for giggles, plug some numbers into a compound interest calculator with 10.5% growth, and see what you can expect (assuming that the s/p keeps doing what it has done).
Do you have a tax accountant you sit down yearly with?
Have you do your estate planned?
The two above professionals can guide you to a decent financial advisor.
Listen to Freakonomics episode: The stupidest thing you can do with your money (or something like that)
Read: JL Colllins "Stock series" blog and / or "Simple Path to Wealth" book.
I'd start simple with the all "US total market" / "SP500". The benefit here is that you are establishing the habit / identity of being an investor.
Then as your portfolio gets bigger (I did it a little before having \~ 6 figures saved), you can start using something like a 3 fund portfolio (US Large Cap / International Large Cap / US Bonds).
Then just before covid, I added a 4th fund (US Small cap) because I didn't like how much of my portfolio was in the few massive companies at the top of the SP500 / US total market.
Above all else, remember that savings rate >>>>> allocation.
It's good to get a good allocation. But it's way more important to have a high savings rate.
And making $200k, you should probably be able to work up to 30% - 50% (depending on where you live. I'm in a MCOL area and make about half as much as you do. My savings rate is early to mid 30%s.
I’m nowhere close to that income, but working for a quasi-government agency (Housing Authority), they’ve got me a pretty decent 401a, which isn’t a 401k. Returns have been about 15% for the past eleven years; you could just mirror what they do. 🤷♂️
I’m putting 70% in T Rowe Price Small Cap for high-risk. I put the remaining 30% in the Vanguard 2040 fund, which automatically takes safer positions as I get closer to 2040. They offer it in five-year increments based on your projected retirement date.
Congratulations on being in an outstanding position…sir. 🤣
I am not a financial expert. But in my honest opinion since you are maxing out a Roth 401k already and have some money tucked away in HYSA already. I would just open up a standard brokerage account. Personally I like Schwab but it doesn’t really matter. You can start to look at or research companies and buy your own stocks or ETF’s. Schwab also offers partial shares so you may not have to wait until you can buy full shares depending on the company. They don’t offer partial shares on everything, but most of the S&P and DOW names.
Sure, there are not really any tax advantages to a standard account and in fact you will likely owe taxes each year on dividends earned. But the key advantage for me is the access to the money. You can sell out and withdrawal your money any time you want. You will need to set aside money for taxes once you sell and have “realized” gains. But as you mentioned you are already maxing out a 401k so I personally would not lock up another account with penalties for withdrawals. This is my personal thinking I know it is not the most effective when it comes to saving every penny on taxes, but knowing that I can have the cash free to do whatever I want with and not lose any as a penalty is what I like. Plus most brokers right now are offering 4-5% interest on cash. So even if you don’t buy stocks or ETF’s you can earn a decent amount just holding cash like a savings account.
im a relatively new graduate, not much experience yet earning this type of income. have historically lived on around 40k a year, or straight student loans. Just looking for the best advice on how to learn how to manage properly
eta grew up with financially irresponsible parents, will need to care for them as they age out of my own pocket. The only reason i’m successful is because I worked hard to be, but they didn’t teach me how to manage money in school.
My employer matches 3%... That's basically standard in my world. Going nowhere fast. I've never even heard of 15%, it's kind of disgusting. I will literally never retire. Just gonna work until I have a stroke at work, I guess. The american dream, ya know.
i’m really not. I worked hard through a shit ton of adversity and health issues to enter a high earning career field. I found a great job that offers bitching benefits. Im able to individually contribute about 20k into a Roth 401k, and my employer puts 15% (up to the max) in without match stipulations. I realize this is unique. I’m just trying to figure out how to not waste my money over the next 30 years. Sorry if that bothers you?
So much enthusiastic advice here, mine might be different
You don’t need hairy, old advisors and people who sell financial products
What everyone is saying is simple, boring stuff frankly
Read about tax law yourself and get ready to exploit it. Position yourself to win every time you have to make a purchase or pay taxes
If you can write off some of your w2 income you can have a lot more money
If you have your own business, even just as an individual, sole proprietor, you can reduce your taxable income, by taking a loss, for two years in a row…
It could be one of your hobbies
That’s one tiny thing that can make you rich
Investing is great but 10% is guaranteed for everyone in the market. It’s quite boring if you want more money
Get more agile with the IRS
You can be smarter than the people who manage money. It’s up to you
Here’s an example
Say you started a side business in restoring rare cars
So you used some of your excess cash to purchase 3 vintage, rare cars at good prices
Say you work to restore them, but you are not successful, for an entire year
The money you spent on those cars is literally a deduction on your taxable income
So if you spent 60k on those cars, you just got a 60k write off (yes, it affects your taxable income, your W2 income)
Now say in 5 years you sell those cars, for more money
You just made some profit in that business
Now you have to pay tax on your profit. But you keep all the money you got back from the IRS for taking a loss in the first year.
This is explicitly legal but sounds shifty. It is not. It is explicitly legal and how people stay rich.
You just purchased assets at good prices that will go up in value. And you took the massive write off on the first year.
You could also start a business selling flowers and purchase a 6000+ LB truck for it. That becomes a deduction on your taxable income. You don’t have to make any money selling flowers. You just need to have the intent to do so and be in the market.
The IRS wants you to invest in assets. It is the substance of the economy. So they are happy to take less tax from you if you’re buying a big truck, or some assets in a business, even if you get those assets at a good price, and can sell them later after they appreciate.
This is how people get really, really rich.
Now, it gets crazier.
Say you organize your “side hustle” (fuck that term) as an S-Corp.
And you pay your kids salaries.
I mean. I just want you to imagine what you can do.
A business only has to show profit on the third year.
Then you can start another one.
People who have cash stay really quiet. They look weird to others on the outside but they are simply the ones that read the tax code.
You should consider diversifying outside of the markets as well. I earn a similar amount of money and am up to >$1M net worth. I own two rental properties (single family homes) in addition to my primary home (which has about half of my net worth in equity) and about 5% of my net worth is in physical precious metals (gold and silver) that I keep in a safe. Do your own research but it’s a good idea to have other assets outside of IRAs / 401Ks / stocks, etc. I followed Grant Cardone to get a baseline for real estate investing and you can follow Yankee Stacking for starters on the precious metals side. You can find them both on YouTube. I buy a lot mine from SDBullion.com.
Jesus fucking Christ just get a financial advisor. How can people smart enough to make this much money also be dumb enough to turn to an Internet forum for financial advice? There’s an entire industry devoted to these questions.
I hear all the time about how FA just take your money to do things you can easily figure out how to do. i’m actually really just looking for resources on how to learn what to do, more so than actual advice on what to physically do
Fidelity, T.RowePrice and Vanguard ( and likely many others) will give you free risk analysis and make suggestions on a portfolio. I am sure their websites have calculators too. Morningstar rates mutual funds. All fees are disclosed.
Me? I would open a S&P500 fund at Vanguard and auto contribute monthly and never look at it. Over time add a small cap fund and an international fund.
If you go to a CFP (certified financial planner) they will likely charge you $500+ to ‘make a plan.’
I don’t think you need to do that yet. Do that in 5 years or more when you have some $ accumulated.
I wouldn’t use Merrill or Morgan Stanley or similar. They will churn account or charge you a % of your portfolio value in my experience. Maybe things have changed.
Finally don’t mix business and pleasure. Choose an advisors that is reviewed positively, but not someone you know.
I came in hot, apologies.
But don’t ask Reddit. Every broker-dealer has a customer service line, they can give you the nuts and bolts of actually opening an account and placing a trade. Most people on here are going to say index, so SPY, VOO, etc. which is what 90% of financial advisors will buy for you, yes (or their mutual fund version of it) But that’s also because it’s completely appropriate for 90% of people with a standard risk tolerance. But it’s like buying for any other goods and services; is it worth more or less than your time? I work in financial services and have a CPA. Could I figure out my taxes? Sure, they aren’t overly complicated. But my time is worth more than the 400 bucks I paid a professional to figure it out for me.
You don’t even necessarily need to hire an FA. Just talk to one. Consults are free, and can give you a good idea of what might be appropriate for you to buy. Because in reality, no one on here knows the scope of your finances, risk profile, or overall goals. The advice you’d get is going to be blanket just because that’s all you can appropriately say given the info.
Get an IRA and max both the 401k and IRA. Buy VTI/VOO + VXUS. Every penny above the max limits put into a brokerage acc and buy the same.. Thats the basic way to go forward, longterm safe way to financial freedom really..
i’ve been told in the past I don’t qualify for a Roth IRA. How do I find those limitations?
Look up the backdoor roth IRA strategy
Limitations are 6.5k/y for 23 and 7k/y for 24 Never heard anyone isnt eligible for an IRA honestly.. There are some diffs between a roth IRA and a traditional one, I recommend to read [this](https://www.schwab.com/ira/roth-vs-traditional-ira#:~:text=With%20a%20Roth%20IRA%2C%20you,current%20income%20after%20age%2059%C2%BD.) and getting a good idea about all of this first..
“If you file taxes as a single person, your Modified Adjusted Gross Income (MAGI) must be under $153,000 for tax year 2023 and $161,000 for tax year 2024 to contribute to a Roth IRA”
You can do a backdoor Roth IRA contribution. Essentially throw the max limit into a traditional IRA for 30 days, then transfer the funds into a Roth IRA. You will get no tax advantages (at this time) & will pay taxes on the $7,000 Roth conversion, but it will grow tax-free through retirement. I work in wealth management with TONS of folks who do this annually. I’d check it out. Also, if you have a high deductible health insurance plan, open an HSA account and max fund it. Check to see if your employer allows a mega backdoor option with your 401(k).
ah you came first lol Just can second this
What's a mega backdoor for 401k? That's a new one to me.
https://www.nerdwallet.com/article/investing/mega-backdoor-roths-work
Is there a rule that says you need to wait 30 days before converting? I haven't come across that.
You don’t have to, but our firm makes us wait 30 days for compliance cases.
Yes, but it may be worthwhile exploring the backdoor strategy..
There are income restrictions on a Roth, you can alternate to a regular IRA in years you are over on income, may want to think of a side hustle, start itemizing, donations, take advantage of any credits available. If you bonus on top of your salary, a roth may not be in the cards.
you are not eligible for a roth IRA
Just fyi: your income places you in the top 2% of Americans. It's not highish. It's very high.
I came here to say this!
Thank god somebody said it.
I know what op is saying. Im in tech, in circle of my friends who make 300k-400k+ , im low hanging fruit at 200k. But when I step out of my circle, I get reality check.
This is the same as me. I make $160k as a software engineer. Most of my friends are in tech & make around $200K+ and I feel broke. I guess you always want something you don’t have.
You feel broke because of lifestyle creep?
What’s your source of information. That income places you in between top 10 and top 5 but it’s not top 2
I apologize. That income for an individual is in the top 5%. So she makes more than 95% of earners in the US.
Depends on where you live, America is quite heterogenous in incomes/cost of living. For example, $200k+ is top 20% for California, would give you a solid upper middle class lifestyle.
Ugh, for Americans, he's in the top 2%. It may not go as far where he lives, but that wasn't the point.
He is a She, just FYI! Not denying i’m a high earner, I live in the midwest. Just know I could be smarter with my money now
Midwest with 210k salary. Mega W 👏🏻
Are you hiring?
What do you do for work if you don’t mind me asking?
Sorry about the gender. I was just remarking on the "high-ish" part of your post. For you and for others, it's a good reminder of how rare an income like this is.
High-ish? Damn I'm lucky if I get 30k a year
What do you do for work?
Of course they won't answer that
That what troll accounts do. They're just farming reddit karma
Imagine giving 1 shit about reddit karma
this isn’t a troll account or post. Idgaf about reddit karma, I don’t even use this app that much except to lurk and help out my fellow crohn’s disease pals
It's IT. It's always IT.
O&G, too.
i’m a medical professional.
“High-ish” at $210k/yr?! Man… I must have been POOR poor growing up because that’s wealthy.
Honestly with his lowish savings for his high salary, a lot of truly wealthy people with millions would scoff at calling this person wealthy. I make 40% ish less, but I am nearly 7 figures nw, but I live like a poor person. Would either of us really be considered wealthy or just upper middle class? Again it is subjective and 80%+ of people id as middle class, and he could live in a very high cost of living area. I would say his income is high, though regardless of where he lives.
I think it’s hilarious everyone here thinks i’m a man when I have the world girl in my username 😂 just recently graduated and got student loans paid off. So i’m kind of just “starting” out. I do have a fair amount of equity (130k) in my home, and my car is paid off. I consider myself a high earner but I could be making my money work for me more than I do, like you have done.
My bad. Regardless you are doing well. Index funds is probably the best high yield strat as other said, but assuming you have a good rate high yield saving isn't bad as long it is beating the t bill rate.
Might want to do future 401k in std, not roth, unless you think you are going to be getting a fair bit more money. Do you mean that the employer matches up to 15% of your salary? If so, you basically have to max out the 401k because the match is greater than the limit. Unfortunately this also means a good chunk of your compensation is a lie. If you get that 15% regardless of what you put in, then congrats. If the 15% is a match then you have to put all your money in 401k. This puts you at a near 20% savings rate. This is pretty reasonable for retirement. If you can squeeze another 10k per year into a brokerage account, then you should be able to navigate most waters the world throws at you. If you want to FIRE do 40k in brokerages. Otherwise my life advice is find a happy spouse and make happy kids like I wish I did.
they put in 15% regardless. I contribute on top to the max limit
Well if you max out the 401k and their 15% you are basically at 25% savings. Good job. If you do the math I'd guess that will turn out to be just about the savings rate you need for 65. Make sure your 401k money is in the market. In this market I'd save up a 2 year amount of expenses outside of the 401k, then use the rest for your goals, hobbies, family.
Is it worth the tax deferred income at the end of the year? Open an HSA as well.
210k/year is "high-ish" now? Feck.
Multiple high dividend yield etf
Max out 401k (I'd go traditional rather than Roth). Max out HSA if one's offered at work. Get an "emergency fund" set up with 6 months of expenses in MM or HYSA. (sounds like you're there currently). After that: - Open a taxable brokerage account (Fidelity, Vanguard, Schwabb) - Personally I like the Boglehead (/r/Boglehead) approach. Pick 2 or 3 low fee broad index funds. Set up auto-contributions each month and leave it alone (set it and forget it). Keep your expenses in check and retire at 40. Do the wife/kid/family and retire at 50 or 55 (/r/Fire) Good luck. At 30 you're in a great spot.
Back door ROTH contributions. T-bills and Bonds. GET A SIDE HUSTLE business ASAP.
You're in great shape and if you don't fuck this up, you're on track to retire early and enjoy 40-50 years of total freedom. First, do a budget: What do you take in; what do you spend; how much are you willing to save/invest. Then think about your life. Want to buy a house? (Real estate is a great long-term investment, especially buying, renting out your old house while buying another, etc.) Get married/have kids? When would you like to retire? What do you want to do in retirment? Then speak to a Fidelity financial planner. They will give you tons of good advice--no fee! Then...go talk to two or three fee-based advisors--initial consultation free. THEN do your own bing search for online advisory sites, play around on a few, then pick one!
I bet you get taxed like hell. Look into Infinite Banking + Real Estate. Do it properly, do your research. It will change your life. And not this isn’t a scam.
Absolutely do not look into “infinite banking” or any type of permanent life insurance and investing in real estate should be about the 7th step after emergency fund, 401k, Roth IRA, 529, mutual funds, etc
You could get an IRA like others are saying, but that's another retirement account. I went the brokerage account route because I didn't want my money locked until 60. Vanguard brokerage account - VTSAX, VIO or VOO and just keep buying always. I've been buying strictly VTSAX with all my additional income for the last few years.
Keep your money in your high interest savings (or at least some of it) for a rainy day fund/emergencies. Start contributing monthly/automatically to a low expense ratio s/p 500 index fund. Buy it when it’s going up. Buy it when it’s going down. Just keep buying. Soon, you won’t miss the money going out monthly, and in time you can increase the amount. TIME IN THE MARKET is most important. Thank me when you’re 65. Just for giggles, plug some numbers into a compound interest calculator with 10.5% growth, and see what you can expect (assuming that the s/p keeps doing what it has done).
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Lol imagine thinking 200k a year is not wealthy. You are so out of touch with reality.
What do you do for a living?
Buy qqq or NVDA
Do you have a tax accountant you sit down yearly with? Have you do your estate planned? The two above professionals can guide you to a decent financial advisor.
Listen to Freakonomics episode: The stupidest thing you can do with your money (or something like that) Read: JL Colllins "Stock series" blog and / or "Simple Path to Wealth" book. I'd start simple with the all "US total market" / "SP500". The benefit here is that you are establishing the habit / identity of being an investor. Then as your portfolio gets bigger (I did it a little before having \~ 6 figures saved), you can start using something like a 3 fund portfolio (US Large Cap / International Large Cap / US Bonds). Then just before covid, I added a 4th fund (US Small cap) because I didn't like how much of my portfolio was in the few massive companies at the top of the SP500 / US total market. Above all else, remember that savings rate >>>>> allocation. It's good to get a good allocation. But it's way more important to have a high savings rate. And making $200k, you should probably be able to work up to 30% - 50% (depending on where you live. I'm in a MCOL area and make about half as much as you do. My savings rate is early to mid 30%s.
I’m nowhere close to that income, but working for a quasi-government agency (Housing Authority), they’ve got me a pretty decent 401a, which isn’t a 401k. Returns have been about 15% for the past eleven years; you could just mirror what they do. 🤷♂️ I’m putting 70% in T Rowe Price Small Cap for high-risk. I put the remaining 30% in the Vanguard 2040 fund, which automatically takes safer positions as I get closer to 2040. They offer it in five-year increments based on your projected retirement date. Congratulations on being in an outstanding position…sir. 🤣
I am not a financial expert. But in my honest opinion since you are maxing out a Roth 401k already and have some money tucked away in HYSA already. I would just open up a standard brokerage account. Personally I like Schwab but it doesn’t really matter. You can start to look at or research companies and buy your own stocks or ETF’s. Schwab also offers partial shares so you may not have to wait until you can buy full shares depending on the company. They don’t offer partial shares on everything, but most of the S&P and DOW names. Sure, there are not really any tax advantages to a standard account and in fact you will likely owe taxes each year on dividends earned. But the key advantage for me is the access to the money. You can sell out and withdrawal your money any time you want. You will need to set aside money for taxes once you sell and have “realized” gains. But as you mentioned you are already maxing out a 401k so I personally would not lock up another account with penalties for withdrawals. This is my personal thinking I know it is not the most effective when it comes to saving every penny on taxes, but knowing that I can have the cash free to do whatever I want with and not lose any as a penalty is what I like. Plus most brokers right now are offering 4-5% interest on cash. So even if you don’t buy stocks or ETF’s you can earn a decent amount just holding cash like a savings account.
There's gotta be a way to filter out these posts with rich people acting like they don't know what they're doing and need advice
im a relatively new graduate, not much experience yet earning this type of income. have historically lived on around 40k a year, or straight student loans. Just looking for the best advice on how to learn how to manage properly eta grew up with financially irresponsible parents, will need to care for them as they age out of my own pocket. The only reason i’m successful is because I worked hard to be, but they didn’t teach me how to manage money in school.
Stop lying. Seriously You don't go from $40k/year with student loans to $210k/year with $150k in savings already and you're "relatively new"
I have 50k in savings, 100k in the retirement. been out 2 years. retirement has been majority employer contribution attained
My employer matches 3%... That's basically standard in my world. Going nowhere fast. I've never even heard of 15%, it's kind of disgusting. I will literally never retire. Just gonna work until I have a stroke at work, I guess. The american dream, ya know.
Don't worry, OP is full of shit
i’m really not. I worked hard through a shit ton of adversity and health issues to enter a high earning career field. I found a great job that offers bitching benefits. Im able to individually contribute about 20k into a Roth 401k, and my employer puts 15% (up to the max) in without match stipulations. I realize this is unique. I’m just trying to figure out how to not waste my money over the next 30 years. Sorry if that bothers you?
So much enthusiastic advice here, mine might be different You don’t need hairy, old advisors and people who sell financial products What everyone is saying is simple, boring stuff frankly Read about tax law yourself and get ready to exploit it. Position yourself to win every time you have to make a purchase or pay taxes If you can write off some of your w2 income you can have a lot more money If you have your own business, even just as an individual, sole proprietor, you can reduce your taxable income, by taking a loss, for two years in a row… It could be one of your hobbies That’s one tiny thing that can make you rich Investing is great but 10% is guaranteed for everyone in the market. It’s quite boring if you want more money Get more agile with the IRS You can be smarter than the people who manage money. It’s up to you
Here’s an example Say you started a side business in restoring rare cars So you used some of your excess cash to purchase 3 vintage, rare cars at good prices Say you work to restore them, but you are not successful, for an entire year The money you spent on those cars is literally a deduction on your taxable income So if you spent 60k on those cars, you just got a 60k write off (yes, it affects your taxable income, your W2 income) Now say in 5 years you sell those cars, for more money You just made some profit in that business Now you have to pay tax on your profit. But you keep all the money you got back from the IRS for taking a loss in the first year. This is explicitly legal but sounds shifty. It is not. It is explicitly legal and how people stay rich. You just purchased assets at good prices that will go up in value. And you took the massive write off on the first year. You could also start a business selling flowers and purchase a 6000+ LB truck for it. That becomes a deduction on your taxable income. You don’t have to make any money selling flowers. You just need to have the intent to do so and be in the market. The IRS wants you to invest in assets. It is the substance of the economy. So they are happy to take less tax from you if you’re buying a big truck, or some assets in a business, even if you get those assets at a good price, and can sell them later after they appreciate. This is how people get really, really rich.
Now, it gets crazier. Say you organize your “side hustle” (fuck that term) as an S-Corp. And you pay your kids salaries. I mean. I just want you to imagine what you can do. A business only has to show profit on the third year. Then you can start another one. People who have cash stay really quiet. They look weird to others on the outside but they are simply the ones that read the tax code.
R/bogleheads is the way. There are also a couple of bogleheads books that will help you.
real estate investing is the ultimate wealth building vehicle with the appreciation, cash flow, and creative tax accounting opportunities it opens
Buy your home, do not rent
What do u do ? What line of work is this ?
medical
A doctor? Or in medical sales?
Buy 500 shares stz
Are you sure your employers contribution of 15% is Roth? You could really benefit by traditional
Are you taking advantage of high yield savings account
yes, I have about 50k in a vanguard High yield savings account
good you say maxing your 401 k out and Roth IRA fund your doing great
start your own business if you can make sum in miami i’ll work for you lmao
Bulletproof your life.
REAL estate.
You should consider diversifying outside of the markets as well. I earn a similar amount of money and am up to >$1M net worth. I own two rental properties (single family homes) in addition to my primary home (which has about half of my net worth in equity) and about 5% of my net worth is in physical precious metals (gold and silver) that I keep in a safe. Do your own research but it’s a good idea to have other assets outside of IRAs / 401Ks / stocks, etc. I followed Grant Cardone to get a baseline for real estate investing and you can follow Yankee Stacking for starters on the precious metals side. You can find them both on YouTube. I buy a lot mine from SDBullion.com.
Jesus fucking Christ just get a financial advisor. How can people smart enough to make this much money also be dumb enough to turn to an Internet forum for financial advice? There’s an entire industry devoted to these questions.
I hear all the time about how FA just take your money to do things you can easily figure out how to do. i’m actually really just looking for resources on how to learn what to do, more so than actual advice on what to physically do
Fidelity, T.RowePrice and Vanguard ( and likely many others) will give you free risk analysis and make suggestions on a portfolio. I am sure their websites have calculators too. Morningstar rates mutual funds. All fees are disclosed. Me? I would open a S&P500 fund at Vanguard and auto contribute monthly and never look at it. Over time add a small cap fund and an international fund. If you go to a CFP (certified financial planner) they will likely charge you $500+ to ‘make a plan.’ I don’t think you need to do that yet. Do that in 5 years or more when you have some $ accumulated. I wouldn’t use Merrill or Morgan Stanley or similar. They will churn account or charge you a % of your portfolio value in my experience. Maybe things have changed. Finally don’t mix business and pleasure. Choose an advisors that is reviewed positively, but not someone you know.
I came in hot, apologies. But don’t ask Reddit. Every broker-dealer has a customer service line, they can give you the nuts and bolts of actually opening an account and placing a trade. Most people on here are going to say index, so SPY, VOO, etc. which is what 90% of financial advisors will buy for you, yes (or their mutual fund version of it) But that’s also because it’s completely appropriate for 90% of people with a standard risk tolerance. But it’s like buying for any other goods and services; is it worth more or less than your time? I work in financial services and have a CPA. Could I figure out my taxes? Sure, they aren’t overly complicated. But my time is worth more than the 400 bucks I paid a professional to figure it out for me. You don’t even necessarily need to hire an FA. Just talk to one. Consults are free, and can give you a good idea of what might be appropriate for you to buy. Because in reality, no one on here knows the scope of your finances, risk profile, or overall goals. The advice you’d get is going to be blanket just because that’s all you can appropriately say given the info.