So now that I know where I am going to put my money; and in my particular case I will max out a Roth IRA (6k), and then put 50k in a regular brokerage account. Both accounts being a Target Date Index Fund. What is next? Should I try and contribute as much as I can each month? I was going to try and set up an auto contribution of about 150-200$ for BOTH accounts each month. Thoughts? Thank you!!
Hey dude! That’s awesome. A few thoughts:
- Since you have so much in a taxable state, definitely make sure your maxing out tax advantaged accounts each your (IRA, 401k, etc). Even if that means ramping your 401k all the way up and living on that 50k in your brokerage account… that essentially moves money from taxable growth to tax free or tax deferred growth
- I would set up auto contributions to max out those retirement accounts first. (i.e. if your 2020 Roth IRA is already maxed as it should be, you could set up a $500/month contribution starting in January 2021)
- If you can still invest on top of those tax advantaged accounts, then yeah, whatever else you have to invest each month, set up an auto contribution to the taxable account.
I love those auto investments. The early and often, set it and forget it, invest like a robot strategy will make you very rich!
Here’s the priority in which I’d fill up accounts:
And here is more motivation to keep investing like a robot.
Sounds like you’re killing it! The remaining task is to set up those auto contributions, then just “stay the course” no matter what the market is doing. Wait a couple decades and you’ll be rich! 