Current Events > ITT: Investment hierarchy.

(+) Yeah! (+)

After you paid off all your bills, you got some money left?

Well here's what you do with it, in order of importance:
1.1) Liquidity- Keep a thousand or two in your checking account, and move the rest into your savings account. You want your total checking and savings account to grow until you feel comfortable (e.g. have 3x monthly bills; 6x monthly bills; 1x monthly bills... whatever you feel safe at).

1.2) Really High Interest Loans- While you start saving, consider starting to pay more than the minimum payments for any debt you have that are greater than 10% APR. Finish paying off these debt before moving on to step #2.

2) Employer-Assisted- Max out any employer-assisted investment accounts. For example, if your employer matches 4% contribution into your Roth/Traditional 401k, contribute 4%. Be sure to use these funds to actually invest in something, and not just keep it as cash.

3) High Interest Loans- Pay down the principle of any debt you have that are greater than 6% APR.

4) IRA- Deposit up-to $5,500 (per year, cycling from April 15th) into a Roth/Traditional IRA. Just like your 401k, be sure to actually invest this. Some low-fee roboadvisors to help you get started: Betterment, Wealthfront, Schwab IP.

5) Contribute More into HSA- Your HSA can be a tax-advantaged investment account! Contribute as much as you can afford in here, and convert your HSA funds into mutual funds. Contact your HSA administrator for more details.

6) Other Investments- Increase your contributions into your 401k, or open up a traditional investment account and start investing into it. Some low-fee brokers to help you get started in "easy" stock investing: Robinhood, Acorns, Schwab ETF, E-Trade ETF.

7.1) Low/Medium Interest Loans- Pay down the principle of any debt you have that are under 6%.

7.2) High Risk Ventures- Have fun and use your excess money in high risk ventures.

Crypto or bust
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8) Shitcoins
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1.0) Crypto
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Just put it all on black.
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@Darkman124
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invest in memecoin
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OP has it correct, although liquidity should really be six months' cost not "whatever feels safe"

the reason is an investment itself: time. if you lose your job, you don't want to be in a position where you have to consider a lower-paying job to ensure other assets won't need to be tampered with to make ends meet

ideally every job change should come with a salary increase.

also, high-risk ventures should be things like buying a single stock. that will demand extra research.

I reached that point this year and dropped $20k in GE. worked well for me.
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GAMERCAMRY posted...

1.0) Crypto

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where is give back to the community you hoarders?
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Darkman124 posted...

the reason is an investment itself: time. if you lose your job, you don't want to be in a position where you have to consider a lower-paying job to ensure other assets won't need to be tampered with to make ends meet

That is true. The rule of thumb is expect a month of job searching for every $10k you want.

Speaking of tampering with investments to make ends meet, this is where Roth IRAs shine: you can pull out the money you put into it without any penalties.

beechesfreeman posted...

where is give back to the community you hoarders?

LMAO

the poor still begging for donations

IdiotMachine posted...

Darkman124 posted...

the reason is an investment itself: time. if you lose your job, you don't want to be in a position where you have to consider a lower-paying job to ensure other assets won't need to be tampered with to make ends meet

That is true. The rule of thumb is expect a month of job searching for every $10k you want.

Speaking of tampering with investments to make ends meet, this is where Roth IRAs shine: you can pull out the money you put into it without any penalties.

yes, but none of the earnings, and i don't believe you can put it back later past the annual contribution, although i might be mistaken about that.
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also, investing in stocks really requires a certain discipline that can be very hard

right now it is tough to want to buy equities. there is a perception and it is not invalid: right now equities are insanely highly valued and buying now means probably losing money over the next year

but it doesn't definitely mean that, and if you're wrong you WILL lose money because you have to buy sometime and in the future they will be higher

you have to think about return in 20 years and the potential short-term dips are meaningless when youre expecting a 200-400% return on the money you invest right now
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