What are the things you've always wanted to know about but have been too afraid of asking? What do you need to retire? Is your financial advisor working on your behalf or just raking in fees? What does it all mean?
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is there a explain like im 5 area for what exactly ETFs & brokerage accts are for?
i kno they are for buying/trading but why would the average person who doesn't know anythin about stocks/shares, want them??
An Exchange Traded Fund might be a collection of stocks or something that has value but not some single owner like gold or bitcoin.
A brokerage account gives you the flexibility to invest on your own. So you'd use something like that if you were investing money on top of what you were sending automatically to something like your 401k. Within it you can set up an IRA or just do regular trading.
You don't necessarily have to know a lot about stocks or care that much about them to have a brokerage account, as a lot of people will invest in something like an index fund, which is a somebody-else-managed collection of stocks.
Me, I hate my 401k options, so while I still send money there I prefer doing it on my own and so I trade within a brokerage account. You can make one pretty easily through Fidelity or Schwab or several other places. And they'll offer you a complete document at the end of the year to do your taxes.
Thank u sooo much for taking the time to explain this!!! Im comin into some extra funds and I'm tryin to research as much info so i make the most of this but I was getting lost lol
Another potentially dumb question: With these brokerage accts, is it something u just leave alone for years and just add to it occasionally?? Or would I need to monitor it/the stock market?
Definitely. You can set up recurring deposits or even recurring purchases to whatever interval and account type you'd like. So it'd be no problem to do something like a regular $500 monthly purchase of some Index fund to an IRA you set up (simple to do) to make sure you're maxing out your yearly contribution.
At that point pretty much the only time you'd need to look at it is to download the 1099 they give you to do your taxes. Or some folks like to have a few different funds to a certain percentage of their money overall and they'll just go in and re-balance them once a year or so.
A lot of index funds are great to just blindly buy on an interval and just never look at again. And if you did it that way you'd be in good company--boring investing is best investing.
Thank you so sooo much for all of the explanations!! This is alot more understandable now and has definitely helped give me some insight!
Nobody in my family knows about this kind of stuff. Theyre the "put ur savings under ur mattress" type and I'm tryin to evolve my financial literacy beyond hiding money in my house lol
Thanks; glad to hear that helped. It all can definitely be intimidating at first but you'll have the hang of it in no time.
Some people don't end up caring for it, but over the past good few years I've really gotten a kick out of playing around with compound interest calculators and projecting retirement income and savings and all that.
I think for me any additional preparation i can do for retirement, the better. Im lookin into buying back some addtl service credit for my pension as well. I'm in my mid 30s but I also don't want to be stuck forced to work until retirement lol
somehow missed this comment, but whoa thats huge! i just looked into mine it's about 2yrs but im considering doing like a down payment and then payroll deducting the rest.
i have considered the overseas idea too!! Definitely way down the line for me but the simple living and LCOL and better healthcare just seems like a no brainer. i hope it all works to plan for u!! i have seen/heard of so many who are able to live their dream life internationally!
Exactly! I know for me I have always wanted to do the simple living lifestyle + travel but it just isnt realistic/sustainable for me here in the U.S. Id rather live elsewhere especially where it's a part of the culture instead of it being against the grain like it is for many here.