[tracknut]

Originally Posted by MaxVO2

****Investing in Berkshire-Hathaway (Warren Buffetts "fund") has done well for me these past 6 years or so. My cost basis is quite low and I purchased several chunks of BRK-B over the years as it ebbed and flowed.

Thanks much for this recommendation! I will put some money in it (and sell my Beanie Baby stock).

[MaxVO2]

Originally Posted by tracknut

Thanks much for this recommendation! I will put some money in it (and sell my Beanie Baby stock).

****It's amazing how well it has done for me in the six or so years I have owned it. The market in general has been very very good the past year or so, but the BRK-B has helped me reach some significant financial goals I have had much sooner than I had ever imagined.

There are other funds, and many individual equities (stocks) mostly tech based that have done better, but they are IMO a bit riskier as they invest in some rather volatile equities that could go either way way up (NVIDIA, Tesla) or way way down (AMD, Intel, etc...). I have those as well, and other equities in a variety of other sectors (consumer goods, defense, healthcare, pharma, raw materials, etc..)

It's good to be diversified and have a number of investment vehicles to better weather market fluctuations that may affect one sector more than others, etc..

I've been investing for some time and no question it has helped me to reach the kind of financial security that my parents never enjoyed as they were a bit scared of the stock market and mostly had their money in CD's, Money Market Funds, etc.. which are "safer" perhaps but the lessened risk of a major downside IMO not as beneficial as the tremendous potential upside as the market grows in general - especially if the money is not needed for some time and can be allowed to grow with the magic of compounding interest, dividends, etc..

There comes a point where even a small increase in the market earns one a LOT more money than they typically would earn in their "day" job. It isn't even remotely close during strong market years as we have had recently - ones wealth can grow remarkably quickly in such a time.

Two chicks money! (Office Space joke...)

[tracknut]

Originally Posted by MaxVO2

There are other funds, and many individual equities (stocks) mostly tech based that have done better, but they are IMO a bit riskier as they invest in some rather volatile equities that could go either way way up (NVIDIA, Tesla) or way way down (AMD, Intel, etc...). I have those as well, and other equities in a variety of other sectors (consumer goods, defense, healthcare, pharma, raw materials, etc..)

Quite a while ago I realized that my choices for individual stocks, and even stock funds, were cancelling each other out. For each one where I was a "genius" there was one where I was a "goat", and the overall trend was not good. Over time I moved my portfolio to largely S&P and NASDAQ index funds with a component of just treasuries and cash for the occasional market crash.

It has been vastly better, and I retired at 49 (66 now) to enjoy life more. Started drawing from my IRA at 50 or so, which is something my accountant suggested I do to help balance my tax situation going forward. The OP's interest in putting retirement money away makes me think he will someday be doing the same.

[Vindicator3]

Originally Posted by MaxVO2

There comes a point where even a small increase in the market earns one a LOT more money than they typically would earn in their "day" job.

The day I decided to really start diving into acquiring my own investment knowledge (and discipline) was the day 25 years ago or so when I read (and comprehended) that for most income paths, if you start investing early and not too cautiously, your investment earnings will be your number 1 source of lifetime income, eclipsing your working earnings.

As commonly attributed to Einstein -

"Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it."

[chassis]

^good post^

Mosaud1998 you are getting some good input on this thread.

[Rob411]

Great exchange of info on this thread.

A couple of things to add:

If your new 401(k) plan is with Fidelity...you may have access to more investment options through opening a BrokerageLink account. (see image attached of what to look for). The option is available in my employer 401(k) which is through Fidelity but it may be specific to my employer's plan offering. Do the homework on fees if choosing to set this up.

One thing that may be worth mentioning about a 401(k) plan. The protections for IRA and ROTH IRA vary by state.
"In general, your retirement plan is safe from claims by other people. Creditors to whom you owe money cannot make
a claim against funds that you have in a retirement plan."
https://www.dol.gov/sites/dolgov/fil...compliance.pdf

Also see this interesting article "How to Protect Your Retirement From Lawsuits": https://www.investopedia.com/article...sp#citation-13

[iX nOOky]

I'm in my mid 50's and desperately saving for retirement. If I was in my 20's again I would do things so much differently. I'd put whatever is required to meet my employers 401k match only, and start a Roth, and put as much as I could into an HSA if that is available. I do not dabble in individual stocks, too risky for my hard earned money.

From browsing online the most common question I see among older folks thinking about retirement is "should I convert my regular IRA into a Roth, and take the tax hit". I'm convinced an HSA is a better vehicle for the tax savings, and when you turn 65 that money can be used for anything, not just medical expenses.

My motto is "don't pay interest, earn it".

[Mosaud1998]

Wow, didn't think this thread would "blow up". I've got a couple of $100s in my ROTH IRA. Now I am trying to figure out how to invest it I've been sick for the last two days so I think I might have lost a few brain cells cause I feel like I'm 70 years old not 26 (No offense).

From my understanding, I should put the majority of the money from my ROTH IRA into S&P?

[Rob411]

Originally Posted by Mosaud1998

Wow, didn't think this thread would "blow up". ...
From my understanding, I should put the majority of the money from my ROTH IRA into S&P?

Ha hah... it is an interesting topic as most everyone is interested in making sure they have a good future. I agree that an S&P Index is a good place to start. You may also look for an 'aggressive growth fund' that is technology oriented for a portion of your allocation and additionally a percentage of the funds in an 'international fund'.

The attached are graphs showing my own personal investment performance by charting the growth of a $10k investment over the last 10 years as well as a chart of my CURRENT asset allocation (likely a bit different 10 years ago and I have since moved more into fixed income).

The graph depicts the growth of a $10,000 investment from 12/2014 until 12/2024. I use Quicken to track my investments and this is a feature within that tool.

Cash would be the worst performing investment for growth, a NASDAQ like stock doing the best). One can see the volatility over time and why a longer look horizon is important vs. focusing on a downturn in any one year. (although the bear market of 2022 was unnerving!)

I included my own asset allocation for reference...it is not necessarily what you should choose. I am 25 years further down the road from you an much closer to a retirement age. That being said my risk tolerance is not what it was when I was 26 and had a long time to recover. As I continue to invest in the future, I am looking at dividend paying stocks and guaranteed returns (for a while CDs were paying 5.5% to 6%...those days are gone).

How to Achieve Optimal Asset Allocation
The article gives a good description of the sub-classes of asset allocation and the risk/reward associated with them.
https://www.investopedia.com/managin...et-allocation/

Mixing It Up: Asset Allocation and Diversification
Another good article with an example showing a mixture of Aggressive vs Conservative growth.
https://fa.wellsfargoadvisors.com/ma...ion.c10257.htm

Finally, don't forget to keep an emergency fund to weather things like a downturn in employment, medical emergency, or unexpected expense/repair.

Hope this all helps and that you feel better soon.

[2000cs]

I agree about asset allocation (diversification), but it is important to consider this across all assets owned. You don’t need to be diversified in each account. It is best to have dividend payers in tax deferred accounts and growth in non-deferred accounts because dividends are taxed at a higher rate than capital gains. That’s just one example where account-level concentration makes sense - then look at the accounts together to evaluate overall diversification. Also consider real estate owned (including residence) before buying residential REIT’s, for example.

[kscarrol]

Originally Posted by 2000cs

I agree about asset allocation (diversification), but it is important to consider this across all assets owned. You don’t need to be diversified in each account. It is best to have dividend payers in tax deferred accounts and growth in non-deferred accounts because dividends are taxed at a higher rate than capital gains. That’s just one example where account-level concentration makes sense - then look at the accounts together to evaluate overall diversification. Also consider real estate owned (including residence) before buying residential REIT’s, for example.

The tax rate on dividends and long term capital gains depends on income. Lower income has a 0% rate, income of roughly $95k up to roughly $580k (married filing jointly) pays 15% and above that is 20%, The scale is slightly different for long term capital gains and dividends but the window for a 15% rate on both covers most earners.

Edit: And yes, if you aren't using the dividends for living expenses (like I do), you want that in a tax deferred account.

[XutvJet]

Originally Posted by Vindicator3

I have to disagree here. I agree with the index fund advice, but that excellent advice pretty much negates the advantage of a taxable brokerage account giving you "full reign to invest in what you want." Some employer plans of course have terrible options, but most have at least a basic suite of index funds so if yours does then getting more investment options that you won't use is not a reason to forego the tax advantages of a 401k.

A 401k plan would have to be pretty bad for a taxable account to be preferable IMO, assuming liquidity is separately addressed and these are truly retirement funds, especially if the plan offers a Roth option and the investor is young and in a relatively low tax bracket compared to where they plan to be later in their career.

Roth IRA outside the plan (for those who qualify) vs Roth investing within the plan (once the employer match has been maximized) is a much closer call to me. Taxable accounts should be a last resort for folks who've matched out the tax-advantaged accounts, or used for funds that may need to be accessed prior to retirement, IMO.

Yeah, I agree, my advice wasn't good at all I meant to say only do the company 401K up to the match, then open a Roth IRA and a brokerage account at a place like Fidelity, Vanguard, etc. By having your own Roth IRA, you can buy the exact funds you want rather than being stuck to the often crap offerings from most company 401K providers.

And yeah, when you're young, you should be maxing what you can in things like a 401K and Roth IRA. The nice thing about a taxable account like a brokerage account is that you push any dividends (taxed every year of course) from stocks and funds in that account to a higher yield money market account which can then can be used to fund your rainy day account or as a means to generate extra cash when you need it. More importantly, if your goal is to retire really early, having a taxable investment account is a great way to fund yourself without penalties when you need that money until you can start withdrawing from your retirement accounts.

My goal is to retire in about 2.5 years at 53 thus I have a fairly sizeable amount in my brokerage account, thus I'm a bit different than most. I'm not waiting until my 60s to be free of "the Man". I also shove the dividends from that brokerage account into a money market account which is also serves as our rainy day account (~1 year of net salary) and the account from which I can pull funds to pay for my daughter's club volleyball and associated travel (which ain't cheap), and buy cars, cover home improvement things, etc. The money market account makes over 5% a year which is nice too.

I'm in no way saying my approach is ideal, logical, money-savvy, smart, etc. It's what works best for my situation, what I'm comfortable with, and goal to retire and continue to live well below my means and simply but with nice cars, a cool little 1,200 ft2 house on some property, and be able to travel around with my wife.

[tracknut]

Originally Posted by XutvJet

My goal is to retire in about 2.5 years at 53 thus I have a fairly sizeable amount in my brokerage account, thus I'm a bit different than most. I'm not waiting until my 60s to be free of "the Man".

Just in case you're not aware, you can withdraw money from your IRA also (without penalty), you just have to make consistent draws and not just random amounts. Check with your accountant if you need to do it. I retired at 49 and drew from my IRA from about 50y to now (66).

[TallGibbs]

Originally Posted by tracknut

Just in case you're not aware, you can withdraw money from your IRA also (without penalty), you just have to make consistent draws and not just random amounts. Check with your accountant if you need to do it. I retired at 49 and drew from my IRA from about 50y to now (66).

Yep, if you want to learn more on drawing from "non-taxed" accounts early, its called a "72(t)" distribution. Here is some general reading on it:

https://www.irs.gov/retirement-plans...iodic-payments

[omasou]

I've always rolled previous employer's 401Ks into a Vanguard IRA. Lowest fees and no 12b1 feeds

VGT and/or VOO for set it and forget it.

NVDA, APPL, VST for growth this year and forward.

Also watch ASML, ARM, etc.

Hyperscalers should start to show returns this year but will continue to blow there budgets on Blackwell, Rubin and every year after now that NVDA has taken a page out of APPLs playbook and are releasing faster chips on a yearly cadence, e.g. AMZN, GOOG and MSFT

I'd also watch NVDA, I have a feeling they are going to introduce some sort of AI cloud solution that will somewhat compete w/the hyperscalers. Read about NVDA's digital twin solution.

TSLA is fine to jump into and out of but it acts too much like a meme stock for my taste but when you get in low and it skyrockets for no reason, there's nothing better.

[omasou]

Originally Posted by Mosaud1998

Wow, didn't think this thread would "blow up". I've got a couple of $100s in my ROTH IRA. Now I am trying to figure out how to invest it I've been sick for the last two days so I think I might have lost a few brain cells cause I feel like I'm 70 years old not 26 (No offense).

From my understanding, I should put the majority of the money from my ROTH IRA into S&P?

Roth all the way. Also trade in your IRAs, no capital gains and no income tax forms to complete until you withdraw.

I've grown my traditional IRA so much that now I'm in the position of paying more taxes on the conversions than I what I saved in the past when I contributed.

Don't listen to the general advice of lower taxes when you're older. It's BS if you make a decent income.

[omasou]

Oh, last thing.

Don't listen to the BS about 60/40 and target year funds. They will only insure that you reach retirement with less money.

Instead maybe do a 60 (Index EFTs, VGT & VOO) and 40 in individual stocks. Depends on your tolerance to volatility.

Most of all don't gamble. Stick with companies that won't go belly up, yes they can go down and maybe for a while but if it's a good company they will eventually comeback.

Also don't play with margin, don't play with options and especially don't listen to anyone on WSB, just read it every now and then to laugh at the losers.

[omasou]

Originally Posted by MaxVO2

****Investing in Berkshire-Hathaway (Warren Buffetts "fund") has done well for me these past 6 years or so. My cost basis is quite low and I purchased several chunks of BRK-B over the years as it ebbed and flowed. It's done better for me than the S&P 500 Index Funds I also own and have contributed to over the years. Diversity and all that..

Really happy with BRK-B compared to other investments (Beanie Babies, Tulips, Cheese of the month club, etc..)

5 year performance of BRK-B vs S&P Index below.

I watched BRK/B all last year with the thought of investing in it but some Index EFTs and individual stocks have beaten his returns.

Now granted he's forgotten more about the market than I will ever know but I'm not sure lately what he's doing and why he's holding so much cash. No one does.

Like I said he knows more than me but I just plain don't understand his investments in SIRI.

[Mosaud1998]

Okay, a lot of good information here! I think what I am going to do is for a month or two, I am going to split my monthly contribution of $400~. $200~ I'll put in the Fidelity Go ROTHA IRA and let the "robots" invest my money; the other $200~ I'll invest myself in the normal ROTH IRA.

I don't think I'd enjoy researching the market often to see where I should put my money long-term. At least, not for right now.

[MaxVO2]

Originally Posted by omasou

I've always rolled previous employer's 401Ks into a Vanguard IRA. Lowest fees and no 12b1 feeds

VGT and/or VOO for set it and forget it.

NVDA, APPL, VST for growth this year and forward.

Also watch ASML, ARM, etc.

Hyperscalers should start to show returns this year but will continue to blow there budgets on Blackwell, Rubin and every year after now that NVDA has taken a page out of APPLs playbook and are releasing faster chips on a yearly cadence, e.g. AMZN, GOOG and MSFT

I'd also watch NVDA, I have a feeling they are going to introduce some sort of AI cloud solution that will somewhat compete w/the hyperscalers. Read about NVDA's digital twin solution.

TSLA is fine to jump into and out of but it acts too much like a meme stock for my taste but when you get in low and it skyrockets for no reason, there's nothing better.

****I've been investing in Nvidia for a long time now and it has done a LOT better than Tesla over the past five years or so. I own both, but have been buying more Nvidia on dips as they are less volatile and have a lot of products and services with amazing demand. They can't make their products fast enough and plenty of entities eagerly await their latest iteration of products.

I don't jump around with many equities, and mostly buy and hold, reinvest dividends usually for more of the equity (DRIP plan). BRK-B has done well for me, but so have many many other things. All about diversity in ones portfolio to maximize chances of doing well.

Nvidia has over double the returns of Tesla over the past 5 years or so.

My portfolio has over 100 different companies, funds, ETF's, Closed end funds, REIT's etc.. in different sectors. Currently tech has been doing well but I still have exposure in areas not tech (mostly consumer goods, defense, pharma, oil/nat gas, etc.. )

Nvidia and Tesla 5 year returns below.

Cheers.

[floridaorange]

Another one here agreeing with Berkshire - our money manager continues to add to our holdings in that stock and he knows the market much better than most. Index funds aren’t rocket science either and are the safest route.

I did well in individual stocks up until I felt untouchable or the market became volatile - then I couldn’t get out fast enough. Fortunately I bought a few things I was able to enjoy and sell or keep and can write off the losses as well.

[omasou]

Originally Posted by floridaorange

Another one here agreeing with Berkshire - our money manager continues to add to our holdings in that stock and he knows the market much better than most. Index funds aren’t rocket science either and are the safest route.

I did well in individual stocks up until I felt untouchable or the market became volatile - then I couldn’t get out fast enough. Fortunately I bought a few things I was able to enjoy and sell or keep and can write off the losses as well.

When selecting an investment I take the price/share into consideration.

For example, if Stock(orEFT)A is $400/share and Stock(orEFT)B is $200/share. "I" will invest 2X in StockB. If they both go up $10/share, my ROI is 100% more with StockB.