My company doesn’t offer a 401k. I had one at a previous employer and moved that to a Rollover IRA. I opened a Roth IRA and fully fund that every year. I also max out my HSA and invest those funds. I opened a brokerage account over a year ago and it has become my favorite account, next to my HSA. You can also buy fixed income products in your brokerage and IRA accounts. I max out my IRA on the first trading day of January. Then every 2 weeks when I get paid, I send a set amount to my brokerage account. I dollar cost average and keep buying more and more shares of my positions, mostly ETFs. It’s amazing how fast it grows when you are consistent. Even when the market is down, I keep on buying.
The long term capital gains are only owed on the growth, not the principal that a person initially deposited. I don't think that was mentioned. Brokerage accounts are a fantastic option for those who cannot invest more in their tax advantaged accounts.
My brokerage account is actually my largest because thats where i started when i got into investing. I love the ability to withdraw whenever i want. Going forward though ive been maxing out my roth IRA, putting some money into savings and some into my brokerage.
Two points I learned the hard way. (1) I started my brokerage account with an S&P index fund purchased with excess cash savings during an exuberant bull market and it lost value the next year. So timing is important when making purchases and it would have been much better if I had waited for a -20% bear market. (2) Paying tax on reinvested dividends is not fun, especially when the account loses value for the year. Had to pay short term investment dividend tax that first year, even with the lower fund value and not withdrawing any funds. That Sucked! The account is likely to double after 7 years total, but would have done so in 5 years if I had timed it better.
@@WealthyTiffany Timing isn't much of an issue with 401k employee accounts, because one should be making regular contributions, in both good times and bad. But the timing of a brokerage investment makes a HUGE difference! It's one of the major distinctions between the two investment accounts.
Definitely take advantage of employer match and max out roth ira and hsa. Keep six months of expenses in liquidity. Then tackle that brokerage account.
Thanks for all the great advice Tiffany. I have a brokerage account; an individual acct and a Roth IRA. I opened the account three years ago, so I'm a small time investor. I only have $74K invest thus far and I add each month. I'll never be a Millionaire, but I plan to have a nice nest egg.
Great content! Answered so many questions. Thank you for teaching this. It’s so important for people to understand. Generational wealth is something we all have access to. Thank you.
This is a great video Tiffany! Very comprehensive and informative. AND you just blew my mind with the info that the capital gains tax is 0% if you make under 40k!
You are correct with this tax aspect yet some additional clarity would be required. The 40K or $52500 with standard deduction is subject to income stacking. For example, if you made $50,000 of employment income or took a $50,000 IRA withdrawal only $2500 would be available at the 0% capital tax rate bracket. This benefit is ideal for early retirees that are living completely off their brokerage account. Yet if you earn any income or take any retirement account distributions.. except Roth then the income or distribution is stacked against that long term capital gain bracket. I think some may mis-understand and be surprised with a tax bill.
You are correct with this tax aspect yet some additional clarity would be required. The 40K or $52500 with standard deduction is subject to income stacking. For example, if you made $50,000 of employment income or took a $50,000 IRA withdrawal only $2500 would be available at the 0% capital tax rate bracket. This benefit is ideal for early retirees that are living completely off their brokerage account. Yet if you earn any income or take any retirement account distributions.. except Roth then the income or distribution is stacked against that long term capital gain bracket. I think some may mis-understand and be surprised with a tax bill.
Greetings tiffany, just opened my first taxable account with M1 Finance. VTI was the first selection. Hope you consider doing a video on building a tax efficient portfolio for a taxable account. I'd be interested in hearing what you have to share. It was useful information about the actual cost using fidelity's zero index funds. I hadn't heard that explanation before. Thank you.
Nice, thanks! I started investing in Late last year. Do we pay taxes when we sell our Stocks/Index Funds or no matter whether we sell or not, do we still pay the taxes? 2025 will be the first year when I will get a 1099 from Vanguard. Where do you invest after you have your $500K in Vanguard?
You're awesome! I've opened my IBKR account last week after spending an hour on the phone with them. Now I'm trying to decide how much I want to move over from my current brokerage account. How much did you transfer over?
I’m just scared that because of social security issues they will want to tax dividends even higher and also capital gains to shore up the system of social security
If you put all your money in a brokerage account and the market crashes wouldn'tt you lose all that money if you needed it to be liquid? I don't think it is is good advice to tell people to put all their on-hand cash in investments
I don’t think any of us like taxes. 😉 But if you are maxing out your tax advantaged accounts, then this account can make you more money than leaving it in a savings.
I'm shooting for as close to a tax free early retirement as possble. While i have a couple small brokerage accounts, I dont plan on building them up as part of my plan. Instead i would live off rental income and supplement it with IUL funds prior to actual retirement age. I've not seen anyone provide a plan without a taxable account, but I think it is possible with a good emergency fund. I do max out my Roth IRA, Roth 401k, and HSA. Thoughts? 🍻
im invested in a brokerage account but see alot of videos about ira roth ira an question if im doin my investing wrong i get worried about taxes and if im focusing waaay to much on a normal taxable account i run 5 indexs and have a long term thought process but still panic cause all the other shit i watch🤓😬
![Benefits Of A Brokerage Account [From a Millionaire]](/img/logo.svg){kind=logo}
