Roth IRA

Deciding where to invest is just as important as deciding what to invest in. If you put money into your Brokerage account before maxing your 401(k) match, you are literally throwing away free money. If you max your 401(k) before paying off credit card debt, you are losing a guaranteed 20% return to pay for a potential 8% return. To build the 75% / 25% split efficiently, you need to follow the Financial Waterfall. You pour your income into the top bucket, and only when it overflows do you move to the next. ...

In the playground of personal finance, people love to argue about the “ultimate” investment account. “Roth is King!” screams the young influencer. “Defer taxes forever!” shouts the high earner. “Liquidity is power!” says the real estate investor. The truth is, investing is just a high-stakes game of Rock, Paper, Scissors. No account wins every time. Each one has a specific weakness that another account can exploit. Here is how the game is played, and how you can win by holding all three “throws” in your portfolio. ...

Everyone loves the Roth IRA. It is the golden child of the personal finance world. “Pay taxes now,” they say, “so you never have to pay them again!” It sounds great emotionally. Mathematically, for the average engineer or professional, it is often a mistake. If you are earning $100,000, you are firmly in the 22% Federal Tax Bracket (plus state taxes). By choosing a Roth, you are volunteering to pay that 22% rate on money you don’t plan to touch for decades. ...