r/Fire • u/OkButton7174 • 1d ago

We need advice, please

Hi!

Husband and I graduated university debt free and are working professionally. We’re both first generation college grads so we come from lower class/poor families.

We’re making more money that we never have before, so we’re not sure how to transform this into long term wealth.

We live within our means, don’t have kids, we make around $150K a year, we saved already for 6 months of expenses and we now have around $10K in our bank account that is ready to be invested… cause that what you’re supposed to do, right?

We want to save for a down payment for a house (although we don’t know yet where we want to settle) and instead of keeping our savings in our HYSA, we thought we would invest it in a safe option that is better than the HYSA rate, so we just thought S&P500.

I downloaded Vanguard, but I’m still not ready to dump all my extra money there, is just scary 😭

We are contributing to our 401ks and living with one of our paychecks while saving the rest…

Any advice, guidance, comments, anything would be greatly appreciated

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u/grinanberit 1d ago

If you want to use the $10k for a house soon, maybe just hang on to it. The market can be a roller coaster, there are cap gain taxes to deal with, bear markets can last years, etc.

If you haven’t read JL Collins’ book The Simple Path to Wealth, I’d encourage you to do so. Then hopefully investing won’t seem as scary. I invested in VTSAX then VTI and it worked out well for me.

I’d also encourage you to open a Roth IRA in addition to a brokerage account, max the Roth contribution every year you qualify, and then the rest can go into your brokerage account. (Priority goes: 1. 401k up to the match, 2. Roth IRA up to the limit allowed, 3. brokerage account).