{"id":1063,"date":"2020-03-11T23:44:08","date_gmt":"2020-03-12T05:44:08","guid":{"rendered":"https:\/\/modernfimily.com\/?p=1063"},"modified":"2020-12-09T23:45:34","modified_gmt":"2020-12-10T06:45:34","slug":"investing-101-part-7-putting-it-all-together","status":"publish","type":"post","link":"https:\/\/modernfimily.com\/investing-101-part-7-putting-it-all-together\/","title":{"rendered":"Investing 101 – Part 8: Putting It All Together"},"content":{"rendered":"
Over the last 7 posts on the Investing 101 Series, you learned about the following:<\/p>\n
If you haven’t read through the rest of the series, check it out here first<\/a> as this post is mostly a summary.<\/p>\n And for anyone still confused on the US accounts vs Canadian accounts, please check out this awesome US\/Canadian FI Glossary<\/a> by my friend Chrissy from East Sleep Breathe FI.<\/p>\n Don’t confuse the TYPE of account with WHAT GOES IN the account.<\/p>\n For example, the question “Should I invest in a Roth IRA or in index funds?” does not make any sense as that’s not a choice you’ll be making.\u00a0 You can invest index funds WITHIN your Roth IRA.\u00a0 Think of the accounts as the different buckets available to you and the funds are what you can fill those buckets up with.\u00a0 The financial institutions are the locations where your buckets are held making sure your money is protected.<\/p>\n So you do your research, pick the financial institution that best suits your needs (aka low fees to save you money), open up an account with them, then allocate money from your current checking account into this particular account instead.<\/p>\n So now you have contributed cash into this account.<\/p>\n THEN you INVEST that cash with a specific fund.<\/p>\n From the example above, you open up a Roth IRA, contribute cash, then invest that cash in index funds.<\/p>\n All those accounts listed above essentially work in the same way.\u00a0 You open them with a bank or brokerage.\u00a0 You’ll get an account number.\u00a0 They hold stuff. They all are slightly special in their own way.<\/p>\n When thinking about your investing, make sure you understand that all your accounts are just empty buckets. The magic happens when you invest INSIDE of those accounts by buying the funds listed above.<\/p>\n As to which funds to select?\u00a0 That’s again up to you and your risk tolerance.\u00a0 Personally, we are mainly invested in VTSAX in our US accounts and VUN.TO in our Canadian accounts.<\/p>\n Ok moving on.<\/p>\n There is so much noise out there when it comes to investing, but when you cut it out, it really boils down to this:<\/p>\n I cannot tell you which funds to invest in.\u00a0 Determining your asset allocation is strictly up to you and your risk tolerance. For most people, I would suggest to be 100% in stock index funds until you are approaching your retirement date. But again, it all depends on your personal goals and your risk tolerance.<\/p>\n Now, I could dive MUCH deeper on this subject but A.) you’re over complicating things in your head, it really isn’t that complicated when it all boils down and B.) we all make mistakes when we’re new – we made tons – you can’t be afraid to start and sit on the sidelines because you want to be 110% sure you’re making the right decision and C.) a legend has already created an extremely long and detailed series on this.<\/p>\n May I introduce you to the Stock Series<\/a> by Jim Collins.<\/p>\n Please, if you haven’t read this entire series or his book The Simple Path To Wealth (which is based off this series), stop what you’re doing and prioritize this.\u00a0 I’ve tried to simplify things down as best as I could but he goes into way more detail but the morale of the story is keep things simple.\u00a0 Invest in low fee index funds (or ETFs) that track the overall market.<\/p>\n I can let you know what we invest in, which we update you with each quarter<\/a>, but I cannot tell you if you should invest 100% in stocks or 60% in stocks.\u00a0 I don’t know you and your situation.<\/p>\n Ok guys, what did we miss?\u00a0 After reading this series, Beat the Bank by Larry Bates,<\/a> The Little Book of Common Sense Investing by John Bogle<\/a>, the <\/span>Stock Series by JLCollins<\/a> or his book <\/span>The Simple Path to Wealth<\/a>, AND the <\/span>Safe Withdrawal Rate series by ERN<\/a> – what additional questions do you still have? <\/span>If you have Instagram, check out my friend <\/span>Jeremy over at <\/span>Personal Finance Club<\/a><\/span> (<\/span>with almost 100,000 subscribers) who truly does an amazing job at <\/span>simplifying investing<\/span> with easy to understand graphics. Not going to lie, this was exhausting to put together but really hoping it benefits many people out there as this really isn’t covered in exhaustive detail in many other places. Would it be beneficial to have step-by-step screenshots of me opening an account within Vanguard and Questrade to show you how to open an account and place a trade?<\/span><\/p>\n If you haven’t already, check out the 7 other parts to the Investing 101 Series:<\/p>\n If you liked this article and want more content like this, please support this blog by sharing it.\u00a0 Not only does it help spread the FIRE, but it lets me know what content you find beneficial.\u00a0 Writing is NOT my strong suit and it honestly takes me hours to write each post so the more encouragement the better!\u00a0 Engaging in the comments below keeps me motivated.\u00a0 You can also support this blog by subscribing to receive emails anytime a new post is published.\u00a0 Thank you FImily!<\/p>\n We believe in stacking up life hacks to keep your enjoyment levels to the max without depleting your bank account.\u00a0 Here are some ways to further educate yourself and save thousands of dollars over your lifetime by making some simple adjustments:<\/p>\n Over the last 7 posts on the Investing 101 Series, you learned about the following: You need to determine what type of investor are you …<\/p>\n\n
Examples of Different Financial Institutions, Accounts, and Funds:<\/h2>\n
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Let’s Dig A Bit Further<\/h2>\n
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\nHere’s a Simple Rough Guide for an Investing Checklist Without Knowing Anything About You or Your Income:<\/h2>\n
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Keep It Simple<\/h2>\n
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My General Guidance:<\/h2>\n
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Here Are Some Things NOT To Do:<\/h2>\n
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Support This Blog<\/h2>\n
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