Investment is very important for raising family, kids' education, and retirement. For most of us who earn an income from working for a corporation, investment does not need to be a complicated thing. Here is a set of questions and answers to help you in your investment journey.
Do you max out your 401(k)?
You should make 401(k) contributions as soon as you start working. If your company has 401(k) contribution matching, that is free money and you are getting a raise. If you cannot max out your annual 401(k) contribution, you need to at least contribute the minimum to get your company's matching. Here is my general guideline of asset allocation in a 401(k) plan.
http://blog.wenxuecity.com/myblog/72332/201712/14092.html
Do you put money in 529, Education IRA (Coverdell) or UTMA accounts for your children's education?
As of September 2023, you will need about $280k for a 4-year private university education for each child. I have seen or heard plenty of examples about kids admitted to top private universities, but their parents can't afford them. In the new tax bill, 529 can be used for K-12 education as well, not just for college which is another plus for 529. I would suggest any parents to open a 529 account as soon as a child is born, this gives you 18 years investment horizon to cumulate the investment gain. Here is the website with more 529 information.
http://www.savingforcollege.com/
Do you qualify for Roth IRA?
If you do, do you put money every year?
http://blog.wenxuecity.com/myblog/72332/201707/3110.html
Do you have 6 month of living expense as an emergency fund?
You need to have the money for living expenses while not working, like layoff, short term disability, family matters, etc.
Do you have a life insurance to protect your family?
Here is my post about the importance of a life insurance.
http://blog.wenxuecity.com/myblog/72332/201712/12835.html
Do you have an umbrella insurance to protect your asset?
Here is my post about the importance of an umbrella insurance.
http://blog.wenxuecity.com/myblog/72332/201804/33493.html
Do you read investment books to educate yourself?
http://blog.wenxuecity.com/myblog/72332/201801/33373.html
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