How Do You Invest?

1 point·100011_100001··3 comments

I am finally at a point that I have enough emergency fund money on the side and my 401K is maxed out.

Luckily I still have money left over. I never paid attention on investing due to my finances, but now that I can I am at a loss. Is there a good hacker style document or blog I can start reading to educate myself and make some good financial decisions for my future.

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I saw this linked a few days ago here on HN (since I look at "new" sometimes). The thread didn't get much traction but it seems like it might be right up your alley. No affiliation with the author, but it covers a lot of the basics and gives you a good starting point to do more of your own research.

https://www.danhacks.com/money/simple-investing.html

Lazy way 1: https://www.bogleheads.org/wiki/Three-fund_portfolio - either rebalance that once/twice a year, or just keep adding money to the position that's underperforming two others, betting on eventual reversion to the mean.

Lazy way 2: Schwab's pre-mixed fund-of-funds of bonds + dividend stocks + real estate https://www.schwab.com/mutual-funds/mutual-fund-portfolio/mo...

The second option is kinda income-heavy, something to watch out for if at your level every new dollar is taxed at top tax rate.

You have a 401K. Investing in a taxable account need not be much different -- you can open a brokerage account and buy ETFs or the mutual funds available on the broker platform. Depending on your tax bracket, municipal bonds may be indicated over taxable bonds for the bond portion of your portfolio.

You can of course buy individual stocks, which can be interesting but which typically produces a lower Sharpe ratio due to underdiversification.

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