Retirement & Wealth Growth

šŸŒ± 1. Core Principles of Wealth Growth

āœ” Automate Savings

  • Pay yourself first: automatic transfers to investment accounts.
  • Aim for 20ā€“30% of income toward savings/investments (adjust to your reality).

āœ” Own Productive Assets

  • Long-term wealth comes from stocks, real estate, business equity, or a combination.
  • Cash loses value to inflation; keep only 3ā€“6 months in emergency savings.

āœ” Time > Timing

  • Consistent investing beats trying to time markets.
  • Compound growth accelerates dramatically after 10ā€“15 years.

šŸ¦ 2. Retirement Accounts Strategy

If you’re in the U.S. (adjustable for other countries):

šŸ”¹ 401(k)/403(b)

  • Always capture employer match ā€” it’s free money.
  • Favor low-cost index funds (S&P 500, total market).

šŸ”¹ Roth IRA

  • Contributions grow tax-free; great for younger investors.
  • Max contribution if possible.

šŸ”¹ HSA (if eligible)

  • Triple tax-advantaged; can double as a stealth retirement account.

Priority Order (General Guide)

  1. Employer match in 401(k)
  2. Max Roth IRA
  3. Max HSA
  4. Return to 401(k)
  5. Taxable brokerage for extra investing

šŸ“ˆ 3. Simple Long-Term Investment Portfolios

Beginner Portfolio (Very Easy)

  • Target-date retirement fund (automatically adjusts risk)

Core Three-Fund Portfolio

  • 50ā€“70% U.S. stocks
  • 20ā€“40% international stocks
  • 10ā€“20% bonds

Passive Wealth Builder

  • S&P 500 index fund (VOO/SPY) + Total world fund (VT)
  • Rebalance yearly.

šŸ” 4. Real Estate As a Wealth Lever

  • House hacking (renting rooms/units) can reduce or eliminate housing cost.
  • Rental property builds equity + cash flow.
  • REITs if you want property exposure without being a landlord.

šŸ” 5. Protecting Wealth

  • Emergency fund
  • Health, disability, life insurance
  • Diversification across assets
  • Avoid high-fee financial products
  • Avoid high-interest debt

šŸ”® 6. How Much Do You Need for Retirement?

Quick rule:

25Ɨ your annual spending (based on the 4% rule).
Example: Spend $60k/year ā†’ Target retirement amount ā‰ˆ $1.5M invested.

šŸ“… 7. Stages of Retirement Planning

20sā€“30s

  • Maximize investing habit and income growth.
  • Aggressive stock exposure.

40sā€“50s

  • Increase contributions (highest-earning years).
  • Add more bonds for stability.
  • Pay off major debts.

60s+

  • Sequence-of-returns protection (more bonds/cash).
  • Tax-efficient withdrawals.

Claim Social Security strategically.