Quote:
Originally Posted by Isaac Zachary
Sounds good! So far:
0. I'm good with my Emergency Fund I think - I've never had a 401K, so I'll have to figure out how to open one.
- I don't have any debts.
- We have an HSA account. So I could do that.
- I don't have an IRA or ROTH. I guess I better figure out the difference.
- Um, ok.
- I'll figure that out if I get to that level.
- I don't have any debts.
- Ok.
Aside: I probably could make more money elsewhere. I'm just not sure what that is though. I'm making more money than I ever have, and I've had many different jobs over the years.
Aside Aside: I was thinking of investing in the stock market for that very reason. I wonder if a 401K, IRA or ROTH can be a stock market investment, or are those just a type of savings account?
I guess you're saying don't put any cash towards a car than necessary? |
A 401k would be offered by your employer, and you would need to talk to HR to find out if they do employee matching. If they do, it's free money. Normal match limit is 4-6% of base salary.
I've not gone beyond step 4, so I haven't had to figure out 5.
401k, IRA, and Roth absolutely can be stock market. Index funds are essentially very low cost mutual funds, which is why everyone advises these instead of picking individual stocks or paying a ton for a managed portfolio (managed portfolios don't outperform the market).
If you go the 401k route, be advised that the default fund is usually a managed fund with high fees, so you will have to log into the website and choose something else.
The reason investing in the stock market is #8 on the list is because it has no special tax advantages like the other options. That said, it is a way to keep your money fairly liquid should you need it quickly. Can't withdraw from an IRA without incurring a penalty.