r/Bogleheads•
wd522

22 years old, 50k/year, how should I invest?

Hello fellow bogleheads, this is actually my first ever reddit post. I am 22(M) and just finished up college, thankfully no debt at all. I currently make around 50k/year and live in a cheap apartment paying $400/month after splitting with my roommate. I also live close to home and eat a few meals with my family every week. I want to hear thoughts on how I am investing without a owning full 6 month emergency fund.

I live well below my means at the moment, putting away roughly 55% of my income into savings/investing. Here is how I am delegating my money on a weekly basis:

40% of income into HYSA with Wealthfront (5% APY)

15% of income into Taxable account (80% VTI & 20% VXUS)

30% of income into needs

15% of income into wants

If I stay at this rate, I will have my emergency fund fully build up by the end of this year (4ish months). I was thinking I would start my Roth IRA (I am a contractor, no employee match on 401k) once my emergency fund is in place. Meaning I would replace that percentage going into my HYSA with maximum Roth IRA contributions. I would have roughly $70 left over every week from that 40%, which i would use to increase my investing in my taxable account. I understand you're supposed to start a Roth IRA before a brokerage account, but I have a goal to purchase a home within the next 8 years, and wanted that time in the market.

I would like to hear your thoughts on the matter. Do I pause on investing and get aggressive on my HYSA? Do I stop with a Taxable account and max my Roth IRA first? Or because this is just 4 more months it will work.

Posted Aug 20, 2024, 4:35 PM UTC

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