Going to hit 100k in savings by the end of 2024 if everything goes well. I haven't invested anything and contribute minimum to 401K. I have read that investing in ETF and Index Funds is the safest way to accumulate wealth, however, they are also at all time high so I am scared of investing. I tried to learn investing on Robinhood but lost 10k on penny stocks. Give me some advice so I can create lots of wealth. TC: 190k YOE: 2
VTI, QQQ, SOXX recurring every month
A target date fund 20 years out will have some smallish bond allocation and international diversification. That's a bit more conservative and theoretically better than just buying a stock. If you already have a 401k with Vanguard or Fidelity just use the same one for convenience. Mutual funds is fine, you don't need ETFs.
I was exactly where you are year ago, here is what I have been doing since past one year. I max out my 401K Buying VOO every week instead of trying to time the market( I assume this money I will be withdrawing after least 5 years)
For a long while now, even if you only invest at all time highs your returns are still in line with any-day-averaged returns so long as you are a long term investor (3+ years). Don't try to time the market--just trust in long term growth.
Why are you not taking advantage of 401k? Do you have a goal for investing? If not then read up a little more about it before you learn investing in stocks. Start with the flowchart on Reddit r/personalfinance and optimize for tax benefits I would highly recommend choosing a very small number of ETFs if you are a beginner as your primary funds and staying away from hype ( crypto, Nikola, tesla and other shit influencers keep promoting). You can keep a small amount aside to play/learn/gamble on stock selection. You will soon figure out your investment style, level of commitment, interests and sources that work for you. Penny stocks seems stupid if you aren't an expert. Losing money can be discouraging but we all have been there. It's a part of the cycle.
Great job on saving 100k. - Open a high yield savings account if you don't already have one, save 6months of your expenses in that account and forget about it till you have a life emergency. - The remaining, slowly invest into the market. Pick a low cost ETF. Something simple like SPY will do. - Dollar Cost average the remaining amount weekly so that it slowly gets into the market over the next year. - Keep aiming to invest this way every week and you'll be in really good shape long term - Another option is Wealthfront or Betterment. Low cost robo investors are a better option than picking your own ETF as they diversify better. DM me if you want a Wealthfront referral - On 401k always atleast invest the amount matched by your employer. Maxing out that also makes sense in many scenarios All the best!
Amazon only matches 2% to your 4% 401k contribution. If I’m doing putting all my 401k into SPY fund, what other investments do you recommend to do through regular brokerage?
I look at 401k slightly differently compared to any other recurring investment account. 401k money is mostly for retirement (future) and tax benefits (every year). You ideally won't have that money accessible till you retire (you could but, let's keep it simple and say you won't take the penalty, etc). So that money can't really help you if you want to say buy a home. So even if you invest more in SPY or something similar via a regular brokerage, that money is still easily accessible before retirement if needed. So you could get more of SPY, or say you are bullish about tech you can get QQQ and so on. Now if you start getting into picking specific stocks, you could make money that way too (potentially faster) but that has an associated time cost as you'd have to do research, take a call when to sell, etc. If you like that, that's great, you can learn technical analysis, simple option trading strategies etc. But Id rather have my time spent not looking at money, and let it build slowly over time. Do look into these robo investors, they have a good blend of things they invest in apart from just the US stock market. They do things like emerging markets, dividend stocks, bonds and even crypto iirc. This kind of mixed blend will obviously grow slowly over time but you won't have to spend your time on it.
Read intelligent investor . Also rich dad poor dad is a good read for you start . Disconnect emotion from your investment and start small. For stocks , I would say overtime create a framework for you that works for you . Also, I would diversify my portfolio with real estate , stocks, bitcoin , ether, find stocks that pay dividends, etc. there are many companies that are offering annual apr of 5 percent until you figure out what to do what your money. Last advice , do not ever be greedy and try to rich fast because you will become poor fast. Good luck.
2060 retirement etf
bogleheads.org or robo-advisor if you'd rather spend your time on growing your TC. That's all there is to it.
Don’t try to time the market. Read up on boglehead. Buy and hold a low fee index fund like VOO and let it be.
+100 to Boglehead approach