How to invest

Facebook Ibtccni
May 1 35 Comments

Hey! I’m new to US and would like to start investing some of my cash.

What I did so far: maxes out 401k/Roth Ira/got around 6 month spendings in Ally saving.

What’s the best to invest to start with? Buy some mutual fund in Fidelity, that follows sp500 + some FAANG stocks through Robinhood?

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TOP 35 Comments
  • Google / Eng Bergey Sin
    Max out 401k. Any extra cash you can save, put in VTSAX. Over the long term, you'll beat 95% of the strategies people will tell you.
    May 1 12
    • Facebook Ibtccni
      OP
      But it has transaction fee of $75, which is 0 in Vanguard I believe. Any reason to buy it instead of FXAIX, for example?
      May 1
    • Google / Eng Bergey Sin
      Yes, FXAIX is an excellent substitute for VSTAX. If it has no transaction fee, it's a better choice.
      May 1
    • Microsoft / Eng
      MgIr74

      Microsoft Eng

      PRE
      Amazon
      MgIr74more
      Also sell all your RSUs on vest.
      May 1
    • Facebook Ibtccni
      OP
      To buy some index?
      May 1
    • Microsoft / Eng
      MgIr74

      Microsoft Eng

      PRE
      Amazon
      MgIr74more
      Yep
      May 1
    • SAP / Eng igpay
      ^^ Do you have personal account in fidelity or vangaurd to buy index funds or do you use the account given by the company?
      May 1
    • Microsoft / Eng
      MgIr74

      Microsoft Eng

      PRE
      Amazon
      MgIr74more
      My Roth IRA and taxable brokerage accounts are with Vanguard, but Fidelity is also a good option.
      May 1
    • SAP / Eng igpay
      Thanks
      May 1
    • Microsoft HINs46
      You can open an account with vanguard if you like. Then vtsax will be free to invest for you.
      Opening an account is free but 10 min. paperwork.
      May 1
    • SAP / Eng igpay
      Thanks a lot @Mglr74
      May 2
  • Amazon
    ps.ily

    Amazon

    PRE
    Google
    ps.ilymore
    Mega backdoor Roth if you’re at FB
    May 1 9
    • Facebook Ibtccni
      OP
      But what if need money earlier than 59?
      May 1
    • Amazon
      ps.ily

      Amazon

      PRE
      Google
      ps.ilymore
      You can withdrawal your principal Roth contributions penalty free before 59
      May 1
    • Microsoft / Eng
      MgIr74

      Microsoft Eng

      PRE
      Amazon
      MgIr74more
      You can also do the mega backdoor Roth at Microsoft and google.
      May 1
    • Facebook Ibtccni
      OP
      Btw, should I max out 401k before mega backdoor?
      May 1
    • Microsoft cWww76
      If your company matches contributions and have good options in 401k, then yes. Otherwise, it depends on whether your tax bracket will be lower when you retire or higher. Also, in addition to mega back door, you can contribute up to 6k after tax money to Roth IRA (search for backdoor Roth).
      May 1
    • Facebook Ibtccni
      OP
      Um, I think I’m confused a little. I want to do mega backdoor and put my money to Roth IRA. To do that I need to transfer money through after tax. To do that I need to know my contribution (which will be 19k) + my employer portion. Then I should transfer 56k - amount to 401k. So do I need to first max it out or making math and sending the right amount is enough?

      Btw, I did regular backdoor
      May 1
    • Microsoft cWww76
      I usually contribute before tax to 401k and MS matches it. Then, I do after tax contribution to 401k, which isn’t matched by MS. I have two options for after tax contributions: I can do in plan conversion (it is converted to 401k Roth and stays in plan) or out of plan conversion (it is converted to IRA Roth). If your question was about whether you should wait till you hit AT limit, then in MS you don’t have to wait. You can do conversion multiple times.
      May 1
    • Facebook Ibtccni
      OP
      Not sure about MS, but I think FB doesn’t instantly match 401k, that means I’ll have all money only Dec 31, so looks like I just need to do math
      May 1
    • Facebook Ibtccni
      OP
      @cWww76, great summary! Can you do unlimited 401 Roth -> Roth IRA converts? And can I take my money (not interest earned) from Roth before 59?
      May 2
  • LinkedIn taaaa
    Mutual fund that follows sp500: YES
    Cheap thrills like robinhood: NO
    May 1 1
    • SAP / Eng igpay
      Not even when the thrill is very cheap?
      May 1
  • LinkedIn letLive
    Read investing basics here: www.firetobiz.com/investing-basics

    Start tracking your expenses and net worth here: https://share.personalcapital.com/x/dAZF5R
    May 1 0
  • Chase McJU43
    All in on BTC
    May 1 0
  • Microsoft / Product oeUv00
    Do you invest in ESPP?
    May 1 3
    • Facebook Ibtccni
      OP
      No, I assume
      May 1
    • Microsoft / Product oeUv00
      Do you have espp option?
      May 1
    • Facebook Ibtccni
      OP
      I don’t think so=\
      May 1
  • Microsoft / Product oeUv00
    Kids? Do 529.
    May 1 1
  • Microsoft / Product oeUv00
    Take FD with ally
    May 1 0
  • Microsoft / Product oeUv00
    Do after tax Roth
    May 1 0