If You Have A Big D..brain Come Here - Topic

SBD

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#21

Jul 26 2017 03:22pm

Quote (Slater420 @ Jul 26 2017 05:09pm)

high risk

Yeah, that is near angle investing to me. I think theres articles around of it tanking right now too haha.

VivaciousBamby

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#22

Jul 26 2017 03:49pm

Quote (wesley123 @ Jul 25 2017 11:05am)

You're still investing into ETFs in your 401k.. So no one answered the question above as he's inquiring what financial vehicle people are recommending.

Also I'd have to disagree with the other two posters . They clearly didn't think of tax consequences which is a sign of poor financial investing.

A 401k should be contributed to when you're earning a high income often once you have matured in your career progression and are near your highest earnings. It will have the greatest benifit to you at that point.

A Roth Ira is better when you are just putting away small amounts at a time sporadically.

Judging by your post you don't have high earnings or you would not be on jsp asking what to do with 5k.

Upon making your Roth Ira you then transition to 401k.

A 401k should be contributed to all throughout your adult life. That is how it is most beneficial to you. Old money grows.

SBD

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#23

Jul 26 2017 04:01pm

Quote (StealthGodx @ Jul 26 2017 05:49pm)

A 401k should be contributed to all throughout your adult life. That is how it is most beneficial to you. Old money grows.

It does in a Roth IRA as well. The amount you save off of taxes because of a 401k though in your early years of salary increases is minimal. You will have a greater impact when contributing to a 401k on your taxes and thus more money to reinvest.

Higher salary = higher incremental tax rate = more value of a 401K contribution. Thus a Roth IRA is better to max first as a younger person who probably is on the lower end of the earnings scale compared to what they will be by the time they max their IRA.

Now if your company has a matching plan to 401K or RRSP if Canadian you obviously contribute the min (ie. 2.5% matching) to meet the dollar for dollar matching as to now throw away free money than all excess goes to Roth IRA or TSFA if Canadian.

This post was edited by wesley123 on Jul 26 2017 04:10pm

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