Junior eng. here who is really confused on what to do with his paycheck. I've heard of things like betterment/vanguard, low cost index funds, bonds, etc. What's the best way to invest money so I can save for the future reliably with peace of mind?
Dont know much about finance or economics in general.
- Mentor Graphics entrepHere is something that I would do if I could go back 15 years at the start of my career:
1. Create a rainy day fund of 6-9 months of expenses. Mostly cash and money market
2. Put 80% of intended savings in S&P500 and Nasdaq every month. With the rest 20%, buy some brands that you use daily and love (at that time it would’ve been Netflix, Apple, Nike, Google etc).
3. When you have enough savings, buy a house and rent out one/two bedrooms if you are still single.
- Google / EngprodaccessmoreRead "The Simple Path to Wealth".
A summary: buy VTSAX and hold for 40 years.
- Nintendo woodThrow one egg each in all the below buckets and you will thank yourself and me in the future. :-)
1. Kids education bucket even if you don't have kids as of today,like 529 plan.
3. Term life insurance
4. Stock market
6. Improving your skills
7.Fun and travel
Happy to know if I missed any bucket.
- Google tsukinopassive/long-term investing in S&P with developed market bonds ETFs as primary hedge (depending on your personal risk profile), and optionally a small percentage of real estate and gold if you are really paranoid about black swan events; example of semi-aggressive portfolio: 60% equities, 25% bonds, 10% real estate, 5% gold
to better understand risk (which is different from volatility), consider looking at graphs of how cointegrated pairs and return correlations break down in crises; illiquidity premium becomes very expensive during such times, so make sure you can ride out the waves
- Amazon / EngtyliumWatch these videos. Follow the advice and you will have a strong strategy to building long term wealth with minimal risk https://www.bogleheads.org/wiki/Video:Bogleheads®_investment_philosophy