What to do with 130k

Hi everyone, so I just started as a an1 I have 130k in liquid cash/savings. I’m not commenting this to boast or anything at all, I made this during the peak of drop shipping in college and just saved it and looking for real advice.

But what is the best way to save/allocate this. Genuinely do not know where to start especially just starting in my career. Thanks!

 

park it in VOO. dollar cost average it if you're feeling crazy

 

Spend money to make your life easier. House keeper, noniron clothing, high-quality versions of stuff you have, etc. Consider if there are any courses or training you could take to make you better or more efficient at your job. If you've already maximized these, invest the rest into your favorite low-fee index funds.

 
Most Helpful

Financial order of operations:

  1. Deductibles Covered: This step involves having enough money in savings to cover any insurance deductibles.

  2. Employer Match (Free Money): If your employer offers a match on retirement contributions, take full advantage of it.

  3. Eliminate High-Interest Debt: High-interest debt, like credit card debt, should be paid off as quickly as possible.

  4. Emergency Reserves: Save 3-6 months of living expenses in an easily accessible account for unexpected expenses or income loss.

  5. Max Out Roth/Traditional IRA: If eligible, contribute the maximum allowed to a Roth IRA or traditional IRA for additional tax advantages.

  6. Max Out HSA (if applicable): If you're eligible for a Health Savings Account (HSA), consider maxing out your contributions. HSAs have triple tax advantages: the money you put in is tax-deductible, it grows tax-free, and withdrawals for qualified medical expenses are also tax-free.

  7. Max Out 401(k), 403(b), or 457: After you've maxed out your IRA and HSA, consider maxing out your workplace retirement plan.

  8. Taxable Investment Account: After maximizing tax-advantaged accounts, consider investing in a taxable brokerage account.

  9. Low-Interest Debt: This step involves paying off any remaining low-interest debt.

  10. Prepay Mortgage: The final step is to prepay your mortgage, if you have one.

 

Financial order of operations:

  1. Deductibles Covered: This step involves having enough money in savings to cover any insurance deductibles.

  2. Employer Match (Free Money): If your employer offers a match on retirement contributions, take full advantage of it.

  3. Eliminate High-Interest Debt: High-interest debt, like credit card debt, should be paid off as quickly as possible.

  4. Emergency Reserves: Save 3-6 months of living expenses in an easily accessible account for unexpected expenses or income loss.

  5. Max Out Roth/Traditional IRA: If eligible, contribute the maximum allowed to a Roth IRA or traditional IRA for additional tax advantages.

  6. Max Out HSA (if applicable): If you're eligible for a Health Savings Account (HSA), consider maxing out your contributions. HSAs have triple tax advantages: the money you put in is tax-deductible, it grows tax-free, and withdrawals for qualified medical expenses are also tax-free.

  7. Max Out 401(k), 403(b), or 457: After you've maxed out your IRA and HSA, consider maxing out your workplace retirement plan.

  8. Taxable Investment Account: After maximizing tax-advantaged accounts, consider investing in a taxable brokerage account.

  9. Low-Interest Debt: This step involves paying off any remaining low-interest debt.

  10. Prepay Mortgage: The final step is to prepay your mortgage, if you have one.

This needs to be required reading to access WSO. +1

 

Agree with the consensus here - open an investment account (think Fidelity or Schwab, not Robinhood, so you aren't forced to close it when you start) and put it into VOO, SPY or IVV (all really the same - you want broad market exposure here)

Then forget about it for 20 years, just go in once a year and reinvest the dividends. Passive wealth building becomes very easy.

 

They didn’t want us to win. GOD DID 🫡 160% return

 

I completely understand that time is a valuable asset. We do have franchise and other business opportunities that offer a more hands-off approach where you can be an absentee owner or passive? This could be a lucrative way to put your cash to work without requiring a significant time commitment on your part. Happy to discuss this further if it piques your interest!

 

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