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This is quite educational. It's crucial for newcomers to keep in mind that the financial markets are highly irrational in the short run. You should constantly be ready for the unexpected. That is how chance operates. Because of the inherent risks in the market, I always favor long-term investments.

Considering the shaky economy, I'm keen to know best, how people split their pay, how much of it goes into savings, spendings or investments. I’d be retiring/working much less in 5 years, and sometimes earn up to $160K per year, but nothing to show for it yet.

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 already have over $2 million in my retirement account and now I want to build an aggressive portfolio. I plan to invest $400,000 in stocks but I'm unsure of the best strategies to pursue.

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.

I'm convinced that investing $50k-100k in the right company before it goes big is more important than saving for retirement. However, picking the right company is so hard. I have around $200k in a HYSA and want to invest. What are the best opportunities now?

A couple of years ago I considered getting into a Roth IRA and 401k without much knowledge and decided to have a consultation with a fiduciary, and it was incredibly insightful. A few years down in, I truly cannot stress enough how helpful experts in this field are! Great video brother.

Tae Kim. doesn't disappoint. It was stupid of me to sell $76,000 worth of NVDA stocks without reinvesting. I might turn to cash soon if I don't. Any particulars? (Buying bonds or CDs is not for me).

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.

It's a common misconception that when a stock you buy skyrockets, the smart thing to do is sell it (or at least sell some of it) to lock in your profits. But the context matters. If the stock has increased sharply because the business is performing exceptionally well, it could still be a bargain. I'm still looking for companies to make additions to my $350K portfolio, to boost performance. Here for ideas...

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.

While i admire long term investors, I really don't know what to expect. For instance, if i invest 500k what would my portfolio look like in 2030?

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.

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.

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.

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

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.

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

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

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.

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

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

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.

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 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 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

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

I love how clear and concise your videos are.

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

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.

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

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!

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.

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.

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

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!

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!

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.

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

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

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.

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

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

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?

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.

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

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

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.

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

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!

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!

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.

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.

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

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

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

Needed this. Thanks brotha 🎄🙏

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.

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

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

"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.

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

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

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

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

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

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

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

What a great informational video! Thank you!

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.

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

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.

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)

Thank you for the easy to follow information.

That ESPP advice is great, thank you!

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.

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.

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.

Great stuff. Thanks! Do you have a video similar to this but if you are targeting early retirement?

Great video! Nicely organized as well.

This is the most useful video you will see today. And maybe tomorrow.

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?

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.

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!

Great video. I love the content!

Would you please do a Mega backdoor Roth? While searching for backdoor Roth IRA, I found your channel, and your video was very helpful. Thank you so much! I had never heard of Mega Backdoor Roth until watching your video. Please do a video explaining the steps for Mega backdoor 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.

Hey Tae, love the channel! Thats great your wife works in the NICU, just like mine.

Great video. Thanks Tae!

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.

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

Great video but I'd bump HSA ahead of non-matched 401(k). HSA is better, because at 65 it acts like a 401(k) anyway but prior to that anything spent on medical is tax-free. And the limit is low compared to 401(k).

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.

Sometimes an employer will make an HSA contribution or match. I'd put this on par with the 401(k) match.