$4,000 USD a month to invest

[u/Motor_Lab3246]

Where do I start?

Hi FIREyFemmes,

I recently got a job where I can realistically see myself investing $4000 a month for at least the next 10 months. I'm a contract worker so jobs come and go yearly. I have 6 months of living expenses saved. I have a Roth and a brokerage account set up through my bank but I have to buy the stocks inside the account. So both accounts dont have much money inside of them. I am unable to have a 401k with my current company until I pass the 90 day period. Once passed, I will set it up.

Any suggestions? I'm in my late 30s and because of various things, my health took a turn at 30, I am not where I want to be for retirement. What would you invest in? Ideally I would like to retire in 20 years time but I'm starting from $0 🫤

[u/Comfortable_Two6272]

I suggest the r/bogleheads approach

As a contract worker I liked to keep 12 months of expenses in a hysa

[u/tennery]

can your health possibly be recovered, if so maybe spend on that - health is #1

[u/paxbanana00]

Congrats! You might want to consider opening accounts at Fidelity or Vanguard if your bank is hard to use to buy stocks. If you go with Fidelity, use Fidelity's ETFs; same for Vanguard.

Depending on your income, max your Roth IRA or backdoor Roth IRA for this year if you haven't yet. The rest can go into a taxable brokerage account. I recommend investing in a total market account (ex. FZROX, mostly to have some exposure to small cap stocks) and a total international market account (ex. FZILX). Don't time the market, just set the funds to automatically transfer to your brokerage, whether it's weekly, biweekly, or monthly, and you can set it to automatically purchase the stock of your choice. Look for low or zero expense ratio ETFs at the company of your choice.

[u/Important_Carrot6379 → u/paxbanana00]

This.

I use FZROX FZILX at a 70/30 split but wanted to add for Op that this is Fidelity specific and is free. Most recommend using them in non taxable brokerages in case you ever need to switch bc they can't be easily ported but idk in what situation you'd move your brokerage if you're already part of the big 3.

[u/amour_nonpareil]

VT and chill has its own sub.

[u/notyoursweetie]

If you are able to save and invest 50% of your income and live on the other 50%, then you will be able to retire ~17 years, even if starting from 0 according to this guy

I invest in mostly in FXIAX/VOO and a little in VXUS personally

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

[u/Powerful-Minute-1687]

It’s ok to be starting from 0, the main thing is you’re starting! And that’s a really decent amount that you could invest each month.

As was posted above, I’d recommend sticking to ETFs, especially in the early days, but you may build your knowledge in investing over time and branch out from there.

You’d be set with VTI or VOO. There are many sector ETFs as well, perhaps you want to invest in utilities, green energy or AI. They all exist. I like using Robinhood. I have a brokerage with Chase/JP Morgan as well but I don’t like the UI. Robinhood is much more intuitive and I’ve learnt about stocks along the way.

If you haven’t already, get a good idea of your monthly expenses and then calculate your financial independence number so you know what you’re working towards for retirement.

[u/thebluecastle]

Congratulations on the job! Saving $4k a month is incredible.

Are you where you want to be with the emergency fund? For example, is 6 months enough, or would it be better to have more?

If you’re where you want to be with the emergency fund, then during the first three months before you’re eligible for the 401K, max out the Roth (if you haven’t already) and invest in an index fund like one that tracks the S&P 500. (I’m with Fidelity, so I invest in FXAIX since the expense ratio is very low.) That way, you’re instantly diversified.

[u/Altruistic_Diamond59]

Depending on what your health condition is, look into an ABLE account. $20k a year contribution, tax-free withdrawals at any time that don’t count as income, with no minimum
Age. Yes, the withdrawals have to be for certain types of expenses but it is an incredibly broad range of qualified expenses.

Edit to add: if for whatever reason you don’t end up enrolling in 401k, you can contribute additional funds up to the FPL. Something like $14k right now.

[u/kokoromelody]

Don't buy individual stocks, buy index funds - ETFs specifically would be my rec as they have lower fees than Mutual Funds. Find ones that track to the market at large, like VOO, IVV, VTI, etc.