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I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.

What I don’t understand is, on one hand we are told the stock market will crash and yet on the other we are told ways of investing in the stock market. Oxymoron or paradox? I'm considering investing over 150k, but I'm uncertain about risk mitigation strategies.

Concluded 2023 with a 20% decline in the S&P 500, long-term investors find a promising entry into 2024. Noteworthy ETFs include: $VOO for S&P 500, $VTI for total US market, $QQQ for tech growth, and $SCHD for growth with dividends. Calculating my annual dividends, I'm thankful for $167k-attributing it to discipline and focus.

My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless.

When I started investing last year, I avoided significant mistakes. I've focused on investing modest sums in stable businesses for the long term. If stocks perform well, I hold onto them; otherwise, I reinvest losses into profits. Recently, I made $9.5k from a $4k investment in NVIDIA.

I'm 42 with $300k in my 401k and a stock and crypto portfolio worth a combined $850k. I started investing just 2 years ago after working for 15years and having just short of 70k in savings. I'm still with the same company but my decision to invest has made the difference for me and my family. Investing is your best friend. The sooner you start, the better off you are.

Great content Tae, this is a crucial topic that needs to be addressed, buying and getting in has never been an issue, however exit points and selection and picking of stocks got me more in the red, I’m open to more positive and smarter methods;

I admire your dedication to educating your audience. We all aim for financial stability and a better life. Achieving this is possible through wise investments, frugal living, and careful budgeting. I'm grateful that I learned the importance of working hard for financial freedom at a young age.

Honestly, this concerns me and has left me uneasy. Especially this potential depression, no more a recession. I'm unsure about my $130K account strategy, considering the uncertainty of this whole recession mostly.

I was advised to diversify my portfolio among several assets such as stocks and bonds since this can protect my inherited portfolio of about $2.5m. I’m used to just buying and holding assets which doesn’t seem applicable to the current rollercoaster market plus inflation is catching up with my portfolio. I’m really worried about survival after retirement.

As a high income earner of proud $7.25 an hour, I find this video very useful

Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?

As a starter learning more about stocks, I’m putting 6% earnings into my individual account with an intelligent investor and I’m cashing up some blue chip stocks at a cheaper price.

Buying a stock is easy, but buying the right stock without a time-tested strategy is incredibly hard. Hence what are the best stocks to buy now or put on a watchlist? I’ve been trying to grow my portfolio of $560K for sometime now, my major challenge is not knowing the best entry and exit strategie;s ... I would greatly appreciate any suggestions.

I will be forever grateful to you, you changed my whole life and I will continue to preach on your behalf for the whole world to hear you saved me from huge financial debt with just a small investment, thank you Victoria Taylor

I usually watch most KZfaq videos on 1.25-1.75x speed, but I can't with your videos. This is a GREAT THING!

This is quite possibly the most concise video on order of investing I've seen. Well done!

I love the pace that you speak and don't waste a single moment. Good content. Please keep making more such videos.

I’m considering whether to retain $3 million in single-family rentals, we have $900,000 left on mortgages. What is the possibility of maintaining $70,000 annual income by selling and investing in stocks and bonds?

This was very nice and straight to the point. The taxable brokerage account stage is the rate limiting phase here and where a lot of people (like myself) lose a lot of their hard earned funds. Don't rush into this stage blindly, you must either be very informed on how to properly go about this or get the services of a professional. Made a couple of thousands last year this way after finding out the hard way. Goodluck!

eliminating high interest debt usually will take precedence over investment depending how high the interest rate. People dont realize the compounding effect can work in reverse. Great video.

“Passing on to our children the value of hard work and ingenuity”. What a novel concept. Right on!

I'd move up HSA contributions before full 401K precisely because of the triple tax benefit. In addition, if you are on the cusp of max FICA wage, HSA contribution will reduce that, so you'll pay less FICA, without much downside to you SS. That's an instant boost. Another thing before full 401K will be limited scope FSA, as long as you spend it all.

Recently started to brush up my financial acumen. Will be a high earner soon after graduating residency and I can say without a doubt your videos are the best for financial education on KZfaq after watching 100s. Very clear and to the point. Thank you very much and continue to make amazing content !!!

I love how clear and concise your videos are.

I love the content and the pace of content. So many other content creators, keep repeating themselves and speak so slowly. Great job.

Some details that Tae left out, probably to reduce the length of the video: 1. For the Backdoor Roth, income tax is paid on the *GROWTH* of the After-Tax funds contributed, as well as all Pre-Tax funds converted. The After-Tax funds are not taxed, because they have already been taxed. The less growth, the less tax, so there is an incentive to make the conversion earlier rather than later. Regardless of how you commingle or do not commingle Pre-Tax funds and After-Tax Funds (e.g., different accounts), types of funds converted are allocated by percentage of each type of fund in ALL IRA accounts. If you have $20,000 in Pre-Tax IRA money, and add $5000 of After-Tax money, the ENTIRE $25,000 would have to be converted for all of the $5000 in After-Tax to be converted. You would pay tax on $20,000, and have $25,000 in Roth IRA funds. I would ordinarily suggest making IRA contributions before maxing the 401(k) contributions, but if you will be regularly making Backdoor Roth contributions, you'll probably want to Zero-out your IRAs so that the only funds to convert each year are After-Tax funds. Again, it behooves you to convert with as little growth (and Pre-Tax funds) as practicable. 2. For the Mega Backdoor Roth, the earnings attributed to "Post-1986 After-Tax contributions" (i.e., the kind being made nowadays) must be withdrawn with the After-Tax funds being converted. ("Pre-1987 After-Tax contributions" can be withdrawn without their earnings.) You can either pay tax on the earnings to make them Roth funds, but you should also be able to bifurcate the two fund "sources" and direct After-Tax to a Roth IRA (no tax) and its earnings to a Traditional IRA (no tax.) 3. When you hit retirement age, you're still probably going to want to have some funds in Pre-Tax, either in a 401(k) or a Traditional IRA, so that you can enjoy these benefits: a. You will likely be able to arrange your withdrawals so that you can have a few years in which you can withdraw a lot of tax-deferred money that you paid 22% or higher tax on at a tax rate of 12% or lower. (Financial planners call this "tax rate arbitrage.") b. If you make charitable contributions, once you reach Age 70 1/2, you can have a Traditional IRA (convert 401(k) funds to IRA funds if necessary) from which you can make Qualified Charitable Distributions, aka "QCDs." QCDs count against your RMDs (when you reach RMD age), but are not counted in your income, so your taxable withdrawal is lower. You also get the benefit of making your charitable contributions with Pre-Tax money, which is like getting a discount on your charitable giving.

My ESPP is truly one of my favorite things I have ever had access too. A built in savings plan with automatic 33% returns. Sell when it's inflated and invest into an index, unbeatable. ESPP also helped me save for a down payment on my first house.

Reading books on investing is impressive! It's great to see such dedication to financial education. The real key to getting rich is applying what you've learned consistently and making smart, informed decisions. Keep up the great work!

"passing on to our children the values of hard work and ingenuity" I love this perspective. I feel the same way. I sometimes feel that my children should be 100% responsible for their education because in the pursuit of funding it they will learn many valuable lessons. College is more for certification than it is for learning.

I was just thinking about this topic and your video came up on feed. Excellent summary of this topic, thanks for making it.

This is awesome, took me years to figure out all these moving parts, great comprehensive list sir, much appreciated

I appreciate the emphasis on finding what works for you. So much financial advice is prescriptive and "go do this now!" in nature. This type of approach is informational and reasonable. Work with you financial advisor and take stock of what matters to you. Thanks!

*Tae Kim deserves all attention. Making money is action and growing money is knowIedge, do this.*

Thank you for this. Love that you provide an actual structure

Best channel on Financial Advice on the Internet hands down! No BS, love it!

I didn’t realize I now qualify for a mega backdoor roth & can finally get even more money into the market in a tax protected Roth. thanks!

I have been looking for this exact information presented in this exact format for 7 years! Thank you!

I needed this.....FINALLY a video for those of us who do not qualify for a ROTH. Thank you! 🎉

@16 i made $7 an hour. Now i work 4 days a week and $2000 a week on average. Step 1 Desire to earn respect. Step 2 Hard Work is Happy Work.

Great video, Tae! Your delivery encouraged me to subscribe. My wife and I are doing two of the ten suggestions, but we will implement them in the upcoming year. Keep up the great work, and we look forward to learning more.

I do HSA first because that is money I will NEVER pay taxes on. Even with a 401k I’ll have to pay taxes eventually. With HSA I immediately gain ~34% because of the tax benefit.

Great video with some excellent suggestions and points made! For ESPP, it’s a great opportunity but I recommend to research outside of the plan documentation before jumping in. As an employee of a company with dividend stock, note when the purchase date and the dividend date are to just be aware of the impact of the potential post-dividend share price drop. Also consider the stock’s alignment with your asset allocation strategy if you hold. My company is ex-US so rebalancing upon both stock bonus vesting and ESPP purchase is necessary to stick to my desired US/ex-US and single-stock/index portfolio proportions.

Live your videos Tae! Very insightful and simple to follow.

I will say... Our HSA is a fantastic benefit. We have had one for like 5 years now, i got it as soon as it was sn option for me. Wow, it is epic.

Great video as always. One word of caution regarding HSAs. Be careful to check your eligibility beyond just having an HDHP - especially if your spouse has their own Healthcare plan. If you are covered by a spouses’ non-HDHP plan in any capacity, regardless of your own HDHP plan, you lose eligibility. Common mistake is when a spouse has an FSA plan. Most FSAs cover spouses by default, even when no dependents are listed unlike like other policies, so invalidate your own HSA eligibility while that spouse’s FSA plan is active.

Because I paid off my mortgage by ignoring financial advisers, I was able to then pay off all other debt. Now I just do cash>Roth>CMA. All that money that would be going towards interest is now going towards my investments instead.

Had literally never heard of the mega backdoor Roth before today - very informative stuff.

Great tip on HSA! I’ll def max this out too ! I already max out my 401k

Needed this. Thanks brotha 🎄🙏

Love this video. It lists all the common sense, unglamorous investment ideas that actually work. I have done all of these and have been very thankful I dis. Compounding and tax minimization are wonderful things

The final rule - have kids, ignore all previous rules. Feed kids all money and hope for the best.

Thank you, Tae. I like all of your videos, but this one is one of my recent favorites 😊

Merry Christmas Tae. Thank you for giving us the gift of financial education!

Thank you for the backdoor Roth IRA information. This is the first year I have this good problem to have.

I went from making $30k a year to $145k a year and although I already knew some stuff that were mentioned here, I was able to learn a few new ones such as the triple tax benefit an HSA account has (I didn't know about this). Really good video Tae! Thank you

Excellent video! Please do one explaining the Mega Backdoor IRA 😀 You explain concepts extremely well, so this will be very valuable to us

Great video, nice to find a concise and informative personal finance video that doesn’t try and sell you on anything

I've been waiting for this video from your channel!

For the Roth IRA, if you are only slightly above the max income, you can still contribute, but at a reduced amount. You can wait until you file your taxes to see how much you can contribute for the previous year; you are allowed to contribute to a Roth for the previous year if it's before April 14th, I think.

And this approach works for everyone even at $20/month. It’s the behavior not the numbers that make it work.❤

From one Tae Kim to another, keep up the great work! Merry 🎄 Christmas

You're the first person I've seen that agrees with the strategy my wife an dI use.

Covid changed my attitude. Had about a months worth of expenses saved up when it hit and I was legitimately worried about my job lasting. Almost 4 years later I have 3 x years of savings tucked away. I know I don’t need that much but the reassurance makes me sleep better at night. All on my mortgage offset account

That ESPP advice is great, thank you!

I'm not sure I understand why max out 401k is before max out HSA since HSA is quadruple taxed advantaged if you use for healthcare expenses and in the 'worst' case where you don't have sufficient expenses, it gives the same tax advantages for money withdrawn at/after 65

Good video! I second your list. Very well explained.

I’d love to hear your thoughts on MBCBPs (Market Based Cash Balance Plans). It’s being sold as an alternative to traditional pensions because it’s technically a defined benefit plan, but it’s funded like a defined contribution plan. Also, would love if you cover the Solo 401k.

Wow this is insanely well-produced and high-quality (and free!) content. Thanks for sharing!

This video should be REQUIRED with annual refreshers and a "must pass" Quiz in all curriculums 7th Grade through Doctorial Candidates😂

You saved us so much money. Big fans of your channel. Thanks for everything you do.

Great video! This is precisely why only 33% of my income hits my bank account. With 401k, after tax 401k, ESPP, and HSA, the remainder covers my monthly expenses with a little left to save for vacations.

Really appreciate your content. It’s actionable instead of an upsell paywall of some sort, which is valuable but let me know how I can do this! Saw you on bigger pockets money. Immediate subscribe. I’m in my mid 30s and finally woke up and starting over. Can’t wait to learn more from you!

You should do a video defining who qualifies as a High Income Earner on net… Can look at locale, DTI, marital status, course of income etc… Might be helpful for goal setting, evaluating current priorities etc.

FYI In Canada HSA has a limit of 2 years with 1 year of rollover so the HSA idea works if you use the money expiring in 1 year.

What a great informational video! Thank you!

Thanks for reminding me to up my 401k contribution in case I get randomly laid off this year (normally I'd spread it across the year for DCA)

Merry Christmas! I noticed you didn’t have government bonds to this mix. It’s a good alternative to CDs especially for those in high income tax states where many high income earners reside. Tbill also has benefit of realizing gains only when you sell or upon maturity

Small correction: You don't necessarily have to max out your tax-advantaged 401k bucket before making after-tax contributions. At least not in all 401k plans. I make traditional (before tax) contributions along side after-tax contributions (which then get converted to Roth) throughout the year.

Great video! Thanks so much - that adds helpful structure to our financial journey.

Investing in alternative income streams that are independent of the government should be the top priority for everyone right now. especially given the global economic crisis we are currently experiencing. Stocks, gold, silver, and virtual currencies are still attractive investments at the moment.

I would say this is more a guideline. I have grad school loans at 3% that i don’t pay off as my money goes into a higher interest fund. Comes out more positive.

Complete agree with your point on 529! This is the way! Work hard, get the degree if it will help you do what you want to do. Don't just go to college because that's what society tells you to do. I got my degree after I figured out what I wanted to do as an adult.

Don't snooze on the taxable brokerage. You can supplement this with RSUs, but I'm building this one up for those early retirement years where I convert $29,000+ of future equivalent traditional 401k funds to ROTH, wiping it out with the standard deduction, and then living off $65,000 equivalent and paying 0% tax.

This applies if you intend to retire in the US. If you’re on a visa and/or likely to retire abroad, you may be taxed at a higher rate, or your local tax authority may want to tax you again in case of roth ira.

really insightful playbook! caution though as no 2 people's situations are the same and with different priorities & circumstances there's actually a very low likelihood that all "high earners" should follow this workflow

Great video! Nicely organized as well.

HSA max out should be up around the ESPP - certainly ahead of maxing out 401k. Not only is it triple tax free and a fantastic retirement benefit, it can also be used currently for medical expenses tax free. Thus, it can be thought of as part of your emergency cash savings.

Thank you for the easy to follow information.

Excellent summary. Very succinct and ticked all my boxes! 👍🏼

This was very helpful, direct, and with just the right amount of insight into the decision-making process, much appreciated. An additional note that may be of use: some HSA’s offer mutual fund options in addition to the traditional savings account. One can mix and match as needed. Some companies will even fund a portion of your HSA.

I'm a low income earner and I'm still going to do all these steps. Checkmate.

I hold ESPP at least qualified disposition date is met so I only have 23.8% tax rate for the gain.

Great video! I’m totally debt free and a high income earner. My wife and I are maxing out all of our retirement accounts, have 529s for our kids, and opened a taxable brokerage account. I want to increase my cash pile and start investing in real estate for 2024.

Love your channel. Taught me a lot as someone who has moved to the US 7 years ago. So thank you. Do you have a video on best way to build generational wealth. 529, trusts, utma, custodial Roth Ira, etc?

Damn, dude, a lot of useful information. Thanks!

Owning your own house is the must. Don't worry about all those government plans. Just do long term investment for high dividend ETFs should be fine.

Merry Christmas!!! 🎉

Great video. I love the content!