If the thought of saving money sounds exhausting, focus on what you can control – what you’re invested in today, how you earn that money, and how you spend it.
Phase 1: The Basics – $0 to $100K
Work and get the salary paid
Invest in 1 or 2 index funds
Phase 2: Growth – $100K to $1M
The amount you invest in a bond fund will depend on how long you have until retirement. If you’re more than 5 years out from retirement, you could skip that step altogether. Once you’re closer, a major market correction could delay your retirement date. At that point having some part of your portfolio in bonds can help.
Your goals during this phase:
Learn how to optimize your portfolio for fees, while keeping an eye on diversification.
Learn how to use bonds to normalize your returns – even if you don’t actually start investing in them yet.
Stick with it
Investing isn’t like buying a lottery ticket. It’ll take years – decades even – to grow your wealth. By investing in index funds (and thousands of different stocks), you’ll get there eventually.
The sooner you can internalize that, the less you’ll try to chase speculative investments and the better you’ll position for long-term investment growth.
Phase 3: Retirement – $1M and Beyond
Once you’re about 5 years away from retirement, it’s a common approach to start making a few changes:
Lower your risk by moving slightly more money out of stocks and into bonds.
Optimize your taxes and daily spendings
By investing in the entire stock market (in the US and internationally) you’re already investing in everything!
Ditch (捨棄) your financial advisor
Your goals for this phase:
Understand how much you’re paying in fees and optimize it
Figure out how you’ll withdraw funds from your accounts in a tax-optimized way
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