Harness Money

This is my favorite step.

Your money machine.

This is essential to building long term wealth. In this step you will be creating your money machine. Every single month your money should automatically move from your paycheck into the appropriate investment account and then be automatically invested into your stock investment of choice.

Investment accounts every individual should have in order:

– Health Savings Account

– ROTH IRA or Traditional IRA or SEP IRA

– 401k or 403b

– Stock brokerage account

Every single month money should automatically move from your checking bank account into the appropriate investment account.

Determine how much money you can afford to move each month. But I want you to move something, even if it is just $10.

As you earn more money increase the amount that you contribute to each of these accounts. Every bank should now have an online presence. Log in to your bank account and connect it to your investment account. Choose a time once or twice a month to have money move from your checking into your investing account.

Once the money is in your investment account make sure that you set up the process for the money deposits to be invested into your chosen investment.

Make it your goal to max out each account.

Order I would max out each account:

1. $3,000 to your HSA

2. $6,000 to your ROTH IRA

3. 401k – contribute enough to get the max

4. $10,000 Series I Bonds

5. Unlimited Stock Broke

Unlimited to your stock brokerage account

What should you invest into?

The easiest and safest way to invest is into an ETF. I like VOO – Vanguard S&P 500 Index Fund. It has low fees and you are putting money into the 500 largest US stocks on the market.

If you start early this is the only investment you will need for life.

If you want a little less volatility you can add in BND – Vanguard Total Bond Fund. You could also invest into individual bonds.

Series I Bonds

This is a US Treasury bond that is tied to inflation. As long as there is inflation in the market this bond will pay out that percentage to the owner. It is issued and backed by the US government. The buyer is limited to $10,000 per year.

I recommend getting a solid foundation of money into an ETF like VOO. Once you build up a solid foundation then you can start investing into other assets. My solid foundation number was $10,000. Some people may want to make this number much larger to feel more secure.

Keep in mind that if you are maxing out your 401k chances are you already investing into mutual funds or ETFs.

You do not have to invest in any other asset if you do not want to. Warren Buffett has said repeatedly that he recommends to his family to invest in a diversified S&P ETF for long term growth.

There are many different investments for you to choose from. Pick one that you will enjoy learning more about and can easily manage.

– Real Estate

– Individual Stocks

– Crypto

I enjoy picking individual stocks. I want to support businesses that I believe in. Always invest to protect and grow your wealth. Preservation is more important than growth. Invest in a way that makes you feel most comfortable.

Recommended Tools

– M1 Finance – ROTH IRA, stock account

– Fidelity – HSA, Stock account

– Series I Bonds – Treasury Direct

– Compound Interest Calculator – Government

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