KISS It: The Retirement Edition

“Investing is not nearly as difficult as it looks. Successful investing involves doing a few things right and avoiding serious mistakes.”

-John C Bogle

When it Comes to Investing, My Best Advice is to KISS it!

 

In other words, Keep It Simple!

 

When it comes to successful investing, there are only a few things you need to know. You don’t need to learn how to day trade to be successful. In fact, day trading will probably not be successful at all.

 

 

MY SIMPLE INVESTING STRATEGY

 

I have a total of four investment accounts: a 401(k), a Roth IRA, a Traditional IRA, and a taxable account. My money is invested in ETFs, index funds and a few bonds. Of all of my long-term investments, three are tax advantaged (the Roth IRA, 401(k), and the Traditional IRA), meaning I get a tax benefit either when I deposit or withdrawal my money.

Taxes are important to note and consider. Taxes can take a massive chunk out of your future earnings, so it’s important to minimize their impact as much as possible. This is why I always recommend maxing out your 401k, Roth IRA, and if you have your own business or side hustle, a SEP IRA before investing in anything else. One cool feature of all the IRA accounts is that you can buy and sell stocks, index funds and ETFs inside them.

I love and prefer ETFs and index funds. They make investing and staying diversified so much easier. I also 100% manage my own investments. I have never used a financial advisor or firm.

(FYI: I typically don’t recommend mutual funds due to high commissions and fees. I don’t own any either).

 

 

“The index fund is a sensible, serviceable method for obtaining the market’s rate of return with absolutely no effort and minimal expense. Index funds eliminate the risks of individual stocks, market sectors and manager selection, leaving only stock market risk.”

-John C. Bogle

 

 

LONG-TERM INVESTING 

 

There’s a big difference between long-term and short-term investing. A lot of people don’t invest in stocks because they are afraid of losing money – which only really matters if you need the money in the short-term (say the next 10 years or less). But if you are investing for the long-term, then I don’t know of any better investment than the Stock Market (ie equities). Sure, stocks can go up and down drastically, but over any 10-year period in history they are always up at least 7% per year when the gains and losses are averaged out.

You can teach yourself how to invest through reading books and blogs. That’s how I learned how to invest successfully. The main thing you have to realize is that a lot of anxiety, fear and emotions get involved with investing, but that is usually simply due to lack of knowledge and education. However, taking just a little bit of time to do some research and learn from others that have been investing for decades. If you only have the ability to read one book on investing here’s my utmost, highly recommended book: The Simple Path to Wealth: Your road map to financial independence and a rich, free life by J.L. Collins.

 

“Time is your friend; impulse is your enemy.”

-John C. Bogle

TIME IN THE MARKET VS. TIMING THE MARKET

 

The down years (ie Bear Market) have an impact, but the degree to which they impact you is often determined by whether you decide to stay invested or get out. An investor with a long-term view may have great returns, while one with a short-term view who gets in, and then bails out after a bad year may have a significant loss.

No one will, or has ever been able to consistently time the market. They is no expert that can tell you when to get in and out and avoid the loss of down years, and then get back in time for the up turn.

If you are going to invest, you should expect the down years. You should know they are going to occur, and stick with your long-term investing plan. Not only that, you should see great opportunity in a Bear Market to buy “cheap” stocks.

 

 

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BROKERAGE FIRMS VS ROBO-ADVISORS

 

Vanguard and Fidelity are your best choice for low-cost brokerage firms. Both are pretty competitive on fees.

Brokerage firms like Vanguard usually have a $3,000 minimum for mutual and index funds, but there are no minimums or commissions for ETFs. So you can invest in Vanguard’s Total Stock Market ETF (VTI) with as little as the price to buy one share.

That’s just one of my favorites. There are hundreds of different ETFs and index funds to choose from to fit your personal investing needs and risk allocation. You can also invest in bonds. remember to keep your portfolio as a whole diversified.

If you are more interested in a robo-advsior (a more hands off approach), Betterment has been very successful in this arena and also has low fees and no commissions, but not as low as Vanguard! You can read my full review of Betterment here.

Either way you choose, I recommend setting up automatic deposits timed with each paycheck and “pay yourself first”.

 

LASTLY, DON’T INVEST IN ANYTHING YOU DON’T UNDERSTAND.

 

You have worked super hard for your money, don’t gamble it on investments, business or schemes you don’t 100% completely understand. If it sounds too good to be true, it most likely is. There is no “get rich quick” approach when comes to investing.

And, that’s about it. I invest in only things that I completely understand with low fees. Then, I continue to buy and hold whether the market is up or down (truthfully, I don’t watch the market day-to-day, because that’s when worry and doubt can set in).

 

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Why, When and How You Should Max Out Your Retirement Accounts

It’s never too late -or too early- to start saving for retirement. If you are just starting to save for retirement, focus on saving as much as you can now. Your biggest asset is time!

 

But, where to start? What type of retirement accounts should you have?

It can get confusing fast with all the different options, advice and opinions in terms of just where to begin. But, your overall goal is to start saving for retirement asap and work up to maxing out all avaiable retirement accounts.

Continue reading “Why, When and How You Should Max Out Your Retirement Accounts”

What You Need to Know About Your 401(k) Fees

What You Need to Know About Your 401(k):

Your 401(k) Might Be Charging You High Fees and Severely Decreasing Your Returns

 

You may have already heard or read about both high-profile brokerage firms and employers, such as Edward Jones, Brown University, Delta Airlines, MIT, NYU and Yale, being sued by plan participants and employees for high fees in their 401(k) plans. 

Employees and plan participants are fighting back against high, exorbitant 401(k) fees, and recent lawsuits decisions have proven that the courts are beginning to side with them. Continue reading “What You Need to Know About Your 401(k) Fees”

6 Habits You Must Start Now to Achieve Financial Independence Later

Financial Independence

 

According to Wikipedia, financial independence is “the state of having sufficient personal wealth to live, without having to work actively for basic necessities”. Many of the things we do right now to improve our personal finances are meant to reach this ultimate goal in which we no longer have to worry about money and/or its source (ie working).

This is also synonymous, and a prerequisite, for retirement. Continue reading “6 Habits You Must Start Now to Achieve Financial Independence Later”

Ally Invest is Coming (and I Am So Excited)

This page may include affiliate links. I may get paid when you click on a link and buy a product/service, but at no extra cost to you.

Ally Invest

If you haven’t figured it out yet… I am in love with Ally Financial. You can read about why an Ally’s savings account can increase your wealth here.

I am completely and utterly excited about Ally Invest coming this month. Ally bought TradeKing last year (2016) and is now Ally Invest.

Ally Invest offers a wide selection of resources to help investors of all experience levels make the most of their investments, including advanced charting tools and numerous calculators”.

Continue reading “Ally Invest is Coming (and I Am So Excited)”

Retirement: Roth vs. Traditional IRA

This page may include affiliate links. I may get paid when you click on a link and buy a product, but at no extra cost to you.Good Morning everyone!

Today I want to discuss IRAs. If you have not heard of them, they are an awesome retirement option for Millennials to utilize.

An IRA is an individual retirement account. Individually, you can put $5,500 per year into a Roth or Traditional IRA. With a Roth IRA, you contribute money after you’ve paid taxes on it and then your money grows tax-free. That’s actually a really awesome deal and usually the best investment option for Millennials. In a Traditional IRA, you put money in before you pay taxes on it. In addition, you can usually deduct this contribution from your taxes if you don’t already have a retirement plan at work or if you make less than $71,000 a year.

Continue reading “Retirement: Roth vs. Traditional IRA”