Personal Finance

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Can you offer investment advice? I'm debt-free, about to start earning $2k more per month than I need to survive. Please offer any suggestions for optimal investment method(s). (lemm.ee)

submitted 1 year ago* (last edited 1 year ago) by [email protected] to c/[email protected]

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48 years old, currently have no investments. My net worth is my car and the clothes on my back, and I don't ever want to be in this situation again.

(Edit: I don't need to buy a house or anything whatsoever related to a house, so please don't mention the "h" word in your response, it's triggering me for tangential reasons. Let me be clear, I will NEVER care about real estate whatsoever, mmmkay? Just trust me when I say I have a roof over my head and it's completely paid off, no property taxes, and No, I will never sell it, so the whole h-word" aspect of life is not a concern for me, k?)

Just looking for guidance where to invest this relatively small amount of money every month so in a few years when I'm older & frailer I'll have enough for retirement. I don't want it to just sit in my bank account, I want it to grow.

For reference, I've been living on approx $1500 per month for as long as I've noticed, so I don't need much per month, and the sooner I die, the less retirement fund I'll need, but we can never predict when anyone's death will happen, so let's assume I'll live to 100 because I'm ridiculously healthy & an exceptionally good driver, never been in an accident, one speeding ticket in my entire life, no social life so I never get into risky situations, so let's just plan for the possibility I'm going to live another 50 years.

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[–] avguser 12 points 1 year ago (6 children)

The Personal Finance wiki from that other site has a Prime Directive flowchart that spells out how you should allocate windfalls. Here's the US flowchart but they have them for other countries with their respective finance programs.

In short, if you already are able to live off a smaller income, build an emergency fund so you don't go backwards, then pay your future self. Don't inflate your expenses unnecessarily because that just makes the goal of retirement cost more in the end.

[–] nicholas_la_teethy 3 points 1 year ago

This flowchart was key to helping me logically lay it all out. As the chart and others have mentioned, get your emergency fund in order before you start investing.

The goal is essentially incremental financial independence, with retirement being the final “stage”. Early on, you want to limit higher interest debt and have the cushion to absorb day to day “surprises” without taking on more debt. Then you get to move into the exciting world of retirement saving, starting with employer tax-advantaged accounts and then into brokerage. I found https://www.bogleheads.org/wiki/Three-fund_portfolio helpful in simplifying the overall decision making (TL;DR index funds).

Definitely worth familiarizing yourself with the flowchart to give you the high-level familiarity. Then you’ll be hooked and pulled down the rabbit hole with the rest of us!

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