#InvestingForEarlyRetirement
Understanding Investing Basics
If you’re feeling lost when it comes to investing for early retirement, you’re not alone. Many people find themselves in a similar situation, unsure of where to start or how to make the most of their money. But don’t worry, with some guidance and education, you can take control of your financial future and work towards your goal of early retirement.
Assessing Your Current Situation
Before you can make informed decisions about investing, it’s essential to understand where you currently stand. Take stock of your savings, retirement accounts, and any debts you may have. Knowing your financial picture will help you make more strategic choices moving forward.
– Savings: $65k
– Roth IRA: $30k (invested in total stock market)
– Traditional 401k: $65k (invested in S&P)
– Crypto: $3k
– Debt: $20k student loan, $450 credit card debt
Setting Clear Goals
To make the most of your investments, it’s crucial to have clear goals in mind. What age would you like to retire? How much money do you need to live comfortably in retirement? By defining your objectives, you can tailor your investment strategy to meet your specific needs and timeline.
Seeking Professional Advice
Considering consulting with a fiduciary could be a wise choice. A fiduciary is legally obligated to act in your best interest, providing unbiased advice and personalized recommendations based on your financial goals. They can help you navigate the complexities of investing and create a customized plan to achieve early retirement.
In conclusion, while it’s normal to feel overwhelmed by the world of investing, taking proactive steps to educate yourself and seek professional guidance can set you on the right path towards early retirement. Stay focused on your goals, continue to learn about financial literacy, and don’t be afraid to ask for help when needed. With the right approach, you can turn your uncertainties into opportunities for financial growth and prosperity. 🚀
Remember, it’s never too late to start investing in your future and working towards the retirement you dream of.
If you have 65k in savings why not just pay off the 20k of student loan debt and the $450 CC debt? I’d do that today.
If your savings account isn’t earning at least 4% interest you are getting screwed. Many online banks offer what are referred to a High Yield Savings Accounts (HYSA). They are able to offer higher interest because they don’t have all the overhead expenses of running physical branches: real estate, electricity, property taxes, etc etc.
Ally Bank is a popular one.
[https://www.ally.com/bank/online-savings-account/](https://www.ally.com/bank/online-savings-account/)
I would be very careful about going to see an advisor. You need to educate yourself a little bit first otherwise I’d be afraid you are an easy target to sell expensive, inappropriate investments. If anybody tries to talk you into buying whole, variable or universal life insurance run. If anybody tries to sell you an annuity run faster. If anybody tries to sell you an annuity inside a retirement account grab your purse/wallet because you are about to get robbed.
Idk what your interest rate is on your student loans, but I’m willing to guess you’ve wasted quite a bit just paying off the interest as you’ve sat on your hands.
The total forgiveness is almost certainly never going to happen. The momentum for it is gone and Biden is focused on other things. Unless you’re a public servant, there’s some loop holes for that – but you’ll need to have been paying them off for 10+ years.
My two cents, in order of operation:
1. Pay off all debts. You can’t even claim that your cash is earning more interest than your debts, and that’s why you haven’t done it. Just do it.
2. Max out your Roth IRA. You can’t get those tax advantaged years back and how much you put in is limited per year. Something like $7,500
3. Establish what your cash is waiting for. What’s the timeline for those goals? That should inform where you’re parking the money. Car? House? Vacation? In general, it should be going to a HYSA or money market. I have my liquid cash in SPAXX at Fidelity at 4.9%
4. Make sure you’re getting all the free money matching your job may be offering. This means 401k matching, but also maxing out HSA if they offer it
You’ve done well to be invested in whole market funds. In general, these are very good for wealth building, and 90% of the time outperform stock picking. (Plus it takes less effort so win win)
Pay off your credit card debt now.
What is the interest rate on the student loans? If it’s higher than the interest rate you’re getting on your savings, then pay that off too, but you absolutely should get a HYSA. They are zero risk (FDIC insured up to $250K), and you can transfer back to checking in 1 business day. Not having one is throwing away $1K+/year at current rates.
Also, you didn’t tell us your monthly expenses, but $65K is probably too high in cash. You should have more in the markets unless you have a large purchase planned in the near future, at your age you don’t want more than 6 months of expenses in cash generally, unless your income is particularly unstable, in which case you may want 9-12 months (i.e. a contractor on short-term projects, etc.).