Broke Millennial Takes on Investing

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Broke Millennial Takes on Investing Page 25

by Erin Lowry

Sullivan, Paul, 214

  Swell, 102, 144, 157, 159–60

  target-date (all-in-one) funds, 60–61, 64

  Tax Cuts and Jobs Act, 193n

  taxes, 4, 52, 186

  financial advisors and, 150–51

  investing advice and, 215, 217

  and investing while paying off student loans, 86, 89–90

  investment terminology and, 30, 42, 44–45

  micro-investing apps and, 125, 131, 136

  nonretirement account investing and, 70, 74, 77

  retirement investing and, 57–58, 62, 64–69, 74, 77

  robo-advisors and, 140–43, 146, 150–51, 154, 192

  selling investments and, 190, 192–94

  and starting to invest in market, 94–95, 102, 105, 110

  and tactics of wealthy people, 199n, 200, 202, 205, 208

  tax-loss harvesting, 190

  definition of, 44–45

  robo-advisors and, 140–41, 143, 146, 154

  and starting to invest in market, 102, 105

  term life insurance, 178, 186

  Tesla, 111, 159

  Thin Green Line, The (Sullivan), 214

  time, time horizons, timing, 121, 216

  and case for investing, 4, 6–7, 9–12

  and investing while paying off student loans, 79, 82, 84, 87, 89–90

  investment terminology and, 31, 34–36, 38–39, 42–43

  market crashes and, 167, 173–76

  micro-investing apps and, 129, 135

  and misconceptions about investing, 19–20

  nonretirement account investing and, 72–74

  retirement investing and, 58–61, 71, 76

  risk and, 51–52, 60

  robo-advisors and, 141, 145–46, 149

  selling investments and, 190, 192

  and starting to invest in market, 2, 93–94, 103, 105, 110

  and tactics of wealthy people, 199–200, 204, 207

  trading (transaction) fees, 100, 107, 122–24, 133, 142

  Trinity study, 75

  T. Rowe Price, 101, 215

  tulip mania, 44, 55, 165–66

  12B-1 fees, 42, 108–9

  25 Rule, 75–76

  Unchained, 212

  UN Sustainable Development Goals, 157–58, 160

  USA PATRIOT Act, 95

  Vanguard, 36–37, 52, 65, 101–2, 129, 132, 145, 161, 180–81, 213

  investing advice from, 214–15

  robo-advisors and, 142, 144–45, 150

  vesting schedules, 63–64

  Virta, Julie, 10, 19–20, 22–24, 48, 85

  Volkswagen, 159

  Wall Street Journal, The, 11, 211

  Wealthfront, 102, 144, 150, 215

  Wealthsimple, 102, 114, 140, 149–50, 160

  investing advice from, 215–16

  overview of, 143

  wealthy people, 19, 134, 214, 220

  Barrett on, 206–7

  Boneparth on, 204–5

  Bruno on, 205

  Fox on, 198–201

  Jaconetti on, 202–3

  Krawcheck on, 201–2

  Krieg on, 203–4

  in protecting assets, 199–200, 207

  Schlesinger on, 204

  self-made, 195–98, 203

  tactics of, 195–208

  websites, 1, 118, 169, 178

  investing advice and, 210–11, 214–17

  micro-investing apps and, 128, 130–31

  robo-advisors and, 142, 144

  and starting to invest in market, 95, 99, 104, 107

  Wells Fargo, 101, 159

  whole life insurance, 178, 186

  wills, 66

  XY Planning Network (XYPN), 152

  ABCDEFGHIJKLMNOPQRSTUVWXYZ

  About the Author

  Erin Lowry is a personal finance author and speaker who loves helping others #GYFLT and #LUYM. (She’s a Millennial, so is contractually obligated to lean in to using hashtags.) Her first book, Broke Millennial: Stop Scraping By and Get Your Financial Life Together, was named by MarketWatch as one of the best money books of 2017 and her style is described as refreshing and conversational. Erin lives in New York City with her husband. She also loves tweeting, so you can reach out to her @BrokeMillennial or on Instagram @BrokeMillennialBlog.

  ALSO BY ERIN LOWRY

  * The compound interest calculations performed in this book are done using my favorite online calculator, from the US Securities and Exchange Commission, which you can find here: https://www.investor.gov/additional-resources/free-financial-planning-tools/compound-interest-calculator.

  * But it caps your eligible compensation at $275,000.

  * In 2018, $18,500 was the maximum amount you could contribute to a 401(k) or 403(b). For information on current limits, visit www.IRS.gov/retirement-plans.

  * If your brokerage is an SIPC member and ends up in financial trouble, the SIPC insurance will help protect you against losses. However, it doesn’t bail you out if the market takes a tumble. You can learn more at https://www.sipc.org/for-investors/what-sipc-protects.

  * You can go back to chapter 6 for a refresher course on expense ratios and fees.

  * Volkswagen had a major emissions scandal that broke in 2015 while Wells Fargo had a series of scandals from 2016 to 2017, including account fraud and employee mistreatment.

  * That means you want to see an ESG rating of BB, BBB, A, AA, or AAA.

  * At the time of our interview.

  * It started with only twelve companies.

  * Large-cap refers to companies that are valued at more than $5 billion. This value is determined by something called market capitalization. Market capitalization is (stock price) × (number of shares issued). For example, let’s say Joey’s Donuts issued 500,000 shares to investors, and each share is worth $130. Joey’s Donuts’ market capitalization would then be ($130) × (500,000) = $65,000,000. Large-cap companies are usually seen as stable and, dare I say, safer investments because their sheer size makes them less likely to go under. While not entirely true, the phrase “too big to fail” comes to mind.

  * It depends on your tax bracket specific to long-term capital gains and dividends, not your ordinary income tax bracket. These changes occurred under the Tax Cuts and Jobs Act.

  * This is actually a really fascinating example of how the wealthy think differently. I highly recommend checking out NPR’s Planet Money episode 823: “Planet Monet,” which digs into the world of buying, selling, and storing art as a means of protecting your wealth and shielding yourself from paying taxes.

  * I wrote this book before we actually said “I do,” but it was published after our marriage, so it was exciting to be writing “husband” for the first time!

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