I will start working as a full-time employee starting next Spring in California. I am interested in pointers on how to start investing?
As I am originally from India, should I prefer investing in India in Fixed Deposit (6-7 % return) as opposed to anything in states?
TC: 170K (Base)
Y.O.E.: 2 yrs before grad school
- Still a really good one. Congrats.
If you plan to go back and settle then invest in India if not strongly suggest to keep the money here — couple of things
1. Max out on 401k
2. Atleast 50% of max allowed in HSA too. You can max out here too.
3. Learn stock investing basics maybe put some money aside for it
4. Pay off high interest (11-13% I guess in India ) education loan if you have one.
Diversify your portfolio and control the urge to splurge on depreciating assets like a car.Dec 6, 2019 3
- Apple IkTl81OPThanks for the advice!
1. I will definitely do this.
2. Correct me if I am wrong, but HSA is taxed in California. Moreover, as my company provides pretty decent Health care coverage for a minimal fee, does it make sense to put money in HSA?
3. Does it matter if I do this in India vs the US, especially in terms of taxes?
4. No Loan
- If you have a HDHP health plan then yes HSA is allowed and you’d still escape the federal tax if not state (ca suckers tax HSA too i know) or possibly reduce your tax bracket.
If you are someone who’d like to clearly understand how you are taxed you’d plan accordingly how to reduce your tax bracket.
- Amazon / Product DTtw27moreDepends on what you want to do with those funds.
First things first. Have 6-12 months of expenses in cash. Do not lock up cash in investments till you have an emergency fund.
Get supplemental life insurance even if you don’t have dependents. The rates will be cheaper now vs when you apply after having kids.
Want to use those funds to pay for expenses in India? Put them in India.
If not, keep funds in $s. A recession is around the corner and the $ will get stronger vs the INR. Holding funds in a weaker currency destroys value.
Setup a 401k and a Wealthfront account. Build up some ‘safe’ investments
While you collect money for all the steps highlighted above. Learn about investing and why picking individual stocks is tough and you will almost always lose.
- Simple path to wealth by JL Collins. I am also a new investor and found it really helpful to understand history of US market. You can Google around for a PDF.
The author J.L.Collins also has an online blog which contains parts of this book.
The author is biased towards just investing on total stock market index like VTSAX or VTI from Vanguard than stock picking and trying to time the market. Seems to be a good advice