Step 1: Investing / Opening a Brokerage Account

To build a strong investment foundation, you should follow the 3-Bucket Investment Strategy, which prioritizes tax efficiency and long-term growth.

You should aim to invest in all three buckets, but in the right order to maximize tax advantages.

You don’t need to pick individual stocks or time the market. The simplest and most effective strategy is to invest in broad-market index funds like VTSAX (Vanguard Total Stock Market Index Fund) or VTI (Vanguard Total Stock Market ETF). These funds have historically delivered 7-10% annual returns, making them a reliable choice for long-term growth.

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🏆 1. Tax-Advantaged Accounts (Max These Out First)

🔹 401(k) (Employer-Sponsored Retirement Plan)

✔ If your employer offers a match, contribute at least enough to get the full match—this is free money.

🔹 Roth IRA or Traditional IRA

✔ Contributions grow tax-free.
✔ Choose based on your tax situation:

• Roth IRA: Pay taxes now, withdraw tax-free in retirement.
• Traditional IRA: Pay taxes later, reduces taxable income now.

🔹 HSA (Health Savings Account) – Triple Tax Benefits

✔ Only available if you have a high-deductible health plan (HDHP).
✔ Triple tax benefits:

• Contributions are tax-free.
• Investments grow tax-free.
• Withdrawals for medical expenses are tax-free.

🚀 Pro Tip: After maxing out these accounts, move on to taxable brokerage accounts.

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📈 2. Taxable Brokerage Accounts (After Maxing Out Tax-Advantaged Accounts)

If you don’t already have a brokerage account, open one with:
✔ Vanguard
✔ Fidelity
✔ Charles Schwab

These accounts will grow your money over time and provide flexibility once you reach FIRE.

Important: Only invest in a taxable brokerage account after maxing out your 401(k) and Roth IRA, since these tax-advantaged accounts should always be prioritized.

💡 What to Invest In?

Invest in low-cost index funds such as:

• VTSAX (Vanguard Total Stock Market Index Fund)
• VTI (Vanguard Total Stock Market ETF)

✔ No tax benefits, but gives you more flexibility for early retirement withdrawals.

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🔄 Set Up Automatic Contributions

One of the most effective ways to build wealth is to automate your investments.

✔ Set up automatic contributions to your 401(k), IRA, or brokerage account.
✔ This ensures you stay consistent and avoid the temptation of timing the market.
✔ Keep it simple—just invest regularly, and over time, your portfolio will grow exponentially.

🚀 The key is to set it and forget it! No need to overcomplicate things with market timing or complex strategies—just stay the course and let compound growth do the work.