The Beginner Investing Roadmap
Four principles: diversification, low fees, long horizon, automatic contribution. Eight vehicles, added over years, never all at once. Three layers: security, growth, diversification.
1. Employer plan, to the match
If there is a match, capture all of it. It is compensation you already earned. Beyond the match, better homes usually exist.
If there is a match, capture all of it. It is compensation you already earned. Beyond the match, better homes usually exist.
2. Roth IRA at a low-cost brokerage
The default home for early retirement dollars. Pay known tax rates now, withdraw tax-free later. Broad index funds inside, on autopilot.
The default home for early retirement dollars. Pay known tax rates now, withdraw tax-free later. Broad index funds inside, on autopilot.
3. Solo 401(k), if you have self-employment income
Any Schedule C income opens it. Higher limits, Roth and Traditional flavors. Worth a conversation with a qualified plan provider.
Any Schedule C income opens it. Higher limits, Roth and Traditional flavors. Worth a conversation with a qualified plan provider.
4. Self-directed IRA, for alternatives
Real estate and private assets inside a tax-advantaged wrapper. Sharp-edged rules. Reputable custodian and legal advice first, always.
Real estate and private assets inside a tax-advantaged wrapper. Sharp-edged rules. Reputable custodian and legal advice first, always.
5. Taxable brokerage
After the match and the IRA are full. Broad, boring, low-cost index funds. VOO, VTI, FXAIX, SWPPX and their peers.
After the match and the IRA are full. Broad, boring, low-cost index funds. VOO, VTI, FXAIX, SWPPX and their peers.
6. Precious metals, small
A low single-digit slice that holds value when paper wobbles. A hedge, never a path to wealth.
A low single-digit slice that holds value when paper wobbles. A hedge, never a path to wealth.
7. REITs, for real estate exposure
A broad REIT fund is the beginner's honest way into real estate. Direct ownership and syndications belong to Volume 2.
A broad REIT fund is the beginner's honest way into real estate. Direct ownership and syndications belong to Volume 2.
8. Cash-value whole life, optional and slow
For patient savers whose situation fits. Not a first investment. Two professional opinions before you fund one.
For patient savers whose situation fits. Not a first investment. Two professional opinions before you fund one.
The order never changes: match, one-month buffer, double-digit debt, full buffer, retirement past the match, everything else. The full order-of-operations page is in Chapter 12 of the book.
Before you buy anything, check the expense ratio. Above roughly 20 basis points, ask exactly what you are paying for. Boring wins, quietly, decade after decade.