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Comment by vuciv1 | Hacker News Reader

I don't know. I am a 22 year-old software engineer who has never had money before. I have been maxing out my 401k and my Roth IRA.

My 401k, upon my (fiduciary) financial advisor's advice, is 100% in Vanguard's 2065 retirement date. I consider this my conservative account.

My Roth IRA is pretty risky, but I am allowing a high risk tolerance because of my age. I am about 50% in various ARK ETFs, and the other 50% are in long term stocks I believe in. AMD, SNAP, etc..

And then I have complete $1000 for gambling in robinhood that i refuse to put more money into. I just buy weekly/monthly options with this account.

I don't know where I was going with this. I just don't really know what I'm doing if I'm being honest, unfortunately.

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The VG 2065 is only 'conservative' on paper. There was a time, 20 or more years ago that it would also be true. The issue is that there is little, if any, upside left in bond prices and they have also become far more correlated with equity returns. So if the stock market tanks, the current allocation of 9% of the 2065 tracking corp bonds (by bond fund) will likely also tank. How quick and far the eventual recovery is of course anyones guess (remember too bond mutual funds are not the same as owning individual bonds).

My 2cent, non-advisor opinion: I would skip the target funds and instead pick an equity fund and allocation (ie, 80%) and put the balance in USFR or VRIG. You won't forsake much in the way of yield with far less downside risk. And unlike a bond mutual fund, floaters reset to current market rates - you won't be stuck with a portfolio filled with low coupon bonds if 5 or 10 years from now rates are at more historically normal levels.

I would just caution to keep a psychological wall of separation between investing and gambling. In the future you may encounter harder times and you may be tempted to gamble more, if you think you have learned something about gambling with your $1000.

Personally I don't gamble with individual stocks at all, both because of my risk tolerance and because I wouldn't want to make it a habit.

Advice I would have given my 22 year old self: Mirror with an individual brokerage account what your employer does with your 401k. Just dump $X/month into that blended target retirement index/mutual fund. It's not perfect, but it will give you reasonable exposure to a broad class of assets and will make you rich slowly while you focus on your life and career.

Thank you, I really value this type of advice from older and wiser people. I don't have anyone in my family who knows money well so I need to learn from others

Sure, I recommend opening a regular brokerage account with Vanguard. you can open it in 10 minutes, and it might take a few business days to transfer in the initial batch of funds.

Then once you have one of the vanguard mutual funds (let's say Target 2060), you can literally have it automatically pull from your bank account every 2 weeks and invest it straight into the fund. You'll never even have to log in after that. Bump up your monthly investment whenever you can, and over a couple years (or a decade or so) you'll end up excellent financial security and even possibly real wealth without realizing it.

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