Middle-aged and want to take a more informed role in managing money. Where to begin?

[Anonymous]

Your best option is low-cost index funds. Where you may want to branch out/get involved is in the market exposure of the index funds.

For example, some here will say buy VTSAX and call it a day. That's an index fund invested in the broad US stock market.

Sounds fine, right? But do you want exposure to interntional markets also? It's a bit more risk, but also can be more reward. Here's my mix:

US market: 50% of portfolio, up 7.07% YTD
Foreign (developmed market) stocks: 18%, up 19.34%
Emreging markets: 15% of portfolio, up 13.46%
Crypto: 10%, up 9.46%
Foreign market bonds: 3%, up 7.21%
US bonds: 3%, up 3.87%

So overall I'm up 10.37% in 2025. VTSAX is up 6.16%. All my investments above are in index ETFs, in each of thoe categories.

Now, next year it may be different in each of those groups.. maybe foreign market stocks will be down, but US market stocks will be up higher or whatever the case. But the idea is, just like you diversify across the US market, why not look at the world market for diversification?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If you did 401k and 529, you have lost a lot of money because of fees, rules, bad service, their lousy investment options, and the fact that you learned nothing holding them. You still have many rules to follow and RMD.
Since you make decent money, you will be fine.
Open an account with Fidelity, buy 5-8 stocks and keep buying. The best if you could do it inside of a Roth.
I bought my stocks inside of a Roth on low income. I learned to buy low and sell high. I make 100% a year easily tax free.
This came about exactly because 401k wasn't available to me ever and because I followed a few stocks for years.
Youtube will show you how to buy a stock with Fidelity or call them.
If you have 18+ kids, then Robinhood account for them also. RH gives them info and services and other banks don't. RH also allows buying stocks and crypto other banks don't allow.
Do your homework into stocks. If your stocks happens to go down, you buy more as you are getting a discount now. Don't forget that you don't lose money until you sell. Don't sell. Buy the stocks for 20 years.

I’m confused. First you advocate buying low and selling high, and then you advocate buying and holding for 20 years.

Which is it?

Just ignore that person. Terrible advice overall

Yes, and s/he posts on every single investment thread. Always advocates investing in only post-tax accounts, which for most people who have a workplace 401k with company matching is really dumb. It’s almost copy-and-paste identical each time.

granted at first most people should max out their 401k or Roth 401k at work to save for retirement. And then supplement that with a Roth IRA account. After that, building wealth over time in taxable accts is also a good idea. With the recent tax changes, taxable accts for the long term have some advantages for estate planning. Heirs to taxable accts get a stepped up cost basis on the investments, so no tax due on transfer to heirs. Which is different for the beneficiares of traditional IRAs or 401-ks. All of those proceeds are taxable.

[Anonymous]

You could also just read some of John Bogle’s books. Little Book of Common Sense Investing, etc.

[Anonymous]

1) maximum amount in 401(k) ($23,500 per person)
2) max out Roth IRA ($7k)
3) Mutual funds or total stock index funds (whatever amount of slush money you have after the first 2 options, make deposits automatic if you can)
4) 529 contributions
5) any cash you are holding (like an emergency fund of 6 months expenses)
should be in a HYSA.

It doesn't have to be complicated. Do these things and just get used to putting your extra money in the market and you'll do pretty well.

[Anonymous]

OP you have already invested "20 percent in a set-it-and-forget-it 401k plans".

So you have done it right because the best investment plans are the ones you don't think about at all (assuming you didn't put it into a Conservative Portfolio).

Its a fact.

[Anonymous]

Anonymous wrote:If you did 401k and 529, you have lost a lot of money because of fees, rules, bad service, their lousy investment options, and the fact that you learned nothing holding them. You still have many rules to follow and RMD.
Since you make decent money, you will be fine.
Open an account with Fidelity, buy 5-8 stocks and keep buying. The best if you could do it inside of a Roth.
I bought my stocks inside of a Roth on low income. I learned to buy low and sell high. I make 100% a year easily tax free.
This came about exactly because 401k wasn't available to me ever and because I followed a few stocks for years.
Youtube will show you how to buy a stock with Fidelity or call them.
If you have 18+ kids, then Robinhood account for them also. RH gives them info and services and other banks don't. RH also allows buying stocks and crypto other banks don't allow.
Do your homework into stocks. If your stocks happens to go down, you buy more as you are getting a discount now. Don't forget that you don't lose money until you sell. Don't sell. Buy the stocks for 20 years.

lol @ 100% / year.

So with an initial investment of $1000, you should be sitting at about $32M after 15 years, is that right? $1B after 20? Uh huh.

[Anonymous]

You mentioned your 401k. First I would see what exactly it’s invested in. Move it to something that will grow, my workplace 401k is in the S&P500 with a low expense ratio.

Next you can start an IRA. If you make good salaries, you might make more than the annual limit ($150k) but if you don’t, you can put it into a Roth. If not, traditional. You can contribute $7k per year and more if you’re over 50.

If you have HSAs available you can contribute to that. Triple tax advantaged. You need a high health deductible though, not everyone is eligible.

Then you can start with a taxable account. If you don’t want to DIY I recommend a roboadvisor like Betterment. If you want to do it yourself, put it in VTI/VXUS and maybe some bonds depending on your age. This is the Boglehead 3-fund strategy. VTI means total US stock market, VXUS means total world market. You want to have more in the US, people vary with their preferred allocation, generally I see 60/40 recommended or less world.

Your cash should be in a high yield savings account.

My boyfriend uses Fidelity and I am going to use E*Trade. I have also used Betterment.

[Anonymous]

Anonymous wrote:1) maximum amount in 401(k) ($23,500 per person)
2) max out Roth IRA ($7k)
3) Mutual funds or total stock index funds (whatever amount of slush money you have after the first 2 options, make deposits automatic if you can)
4) 529 contributions
5) any cash you are holding (like an emergency fund of 6 months expenses)
should be in a HYSA.

It doesn't have to be complicated. Do these things and just get used to putting your extra money in the market and you'll do pretty well.

I’m PP and generally agree with this person. My response was more detailed though. 529s don’t grow as fast as other investments so that is up to you.

[Anonymous]

What you're doing is good—great job on the 401k and 529 plans. Read Bogleheads. And if you're not already doing it, add monthly contributions to a brokerage account in broad index funds (which you'll learn about reading Bogleheads).

[Anonymous]

Anonymous wrote:

Anonymous wrote:1) maximum amount in 401(k) ($23,500 per person)
2) max out Roth IRA ($7k)
3) Mutual funds or total stock index funds (whatever amount of slush money you have after the first 2 options, make deposits automatic if you can)
4) 529 contributions
5) any cash you are holding (like an emergency fund of 6 months expenses)
should be in a HYSA.

It doesn't have to be complicated. Do these things and just get used to putting your extra money in the market and you'll do pretty well.

I’m PP and generally agree with this person. My response was more detailed though. 529s don’t grow as fast as other investments so that is up to you.

That's just false, and you are confusing people. My kids' 529 plans have tracked VTI just like my brokerage account because they are invested in the same equities fund, without almost the same fees. If your 529 plan is losing to the market, that's a you problem, not a 529 plan problem. My oldest has over $200k in earnings in their 529 plan.

[Anonymous]

Anonymous wrote:Do you have an account with vanguard or fidelity? If not start there? Start small.

Agreed. You can also get a financial advisor through either of these, which is very necessary.

[Anonymous]

I have been on a personal finance journey for the last 2 years.

You could start with Ramit Sethi - I will teach you to be rich. I also like the psychology of money, and YNAB.

[Anonymous]

Anonymous wrote:1) maximum amount in 401(k) ($23,500 per person)
2) max out Roth IRA ($7k)
3) Mutual funds or total stock index funds (whatever amount of slush money you have after the first 2 options, make deposits automatic if you can)
4) 529 contributions
5) any cash you are holding (like an emergency fund of 6 months expenses)
should be in a HYSA.

It doesn't have to be complicated. Do these things and just get used to putting your extra money in the market and you'll do pretty well.

If you cant afford it all, top of order should be
1) 401k to the max value where you get any matching (free money).
2) ROTH IRA (backdoor if needed)
2.5) rest of 401k space

[Anonymous]

Don’t confuse being more informed with being more active. If you pick the right things (low-cost index funds or ETFs), “set and forget” will beat the overwhelming majority of attempts at timing the market or investing in more exotic instruments.

Nth the rec for Bogleheads. Read their Wiki first.

[Anonymous]

Ramit sethi YouTube videos are great.

Also the library has tons of great stuff.

In addition to personal finance sites like nerd wallet and bogleheads, I also recommend the book A Random Walk Down Wall Street.

Also, old episodes of Suze Orman.

I’ve heard Planet Money podcast is good too.