Gen Z Guide to FI

While on my trip to Canada, my homie asked “how do I invest?” or something similar at least. I got really excited because friends who finance together are friends forever right? *am I lonely?..* But on a serious note, I missed my friends. It was nice to know that I have people I can talk about anything with, especially personal finance since FIRE is a major life goal of mine.

This one is for you bro.

I personally have a Vanguard account. Within my Vanguard account, I have a TAXABLE brokerage account and a Roth IRA. A brokerage is an account where you can easily buy and sell stocks/shares of companies. There is no penalty to sell shares but you have to pay taxes on any capital gains (if the selling price of your share is higher than when the price you bought it). In the 3 steps below, you can create your Vanguard account.

To open a Vanguard Roth IRA, click here. A Roth IRA is a retirement account which has tax advantages especially if you make below a certain income ($36,500 or less). You can pull your original contributions anytime but there are restrictions (taxes & penalties) to take note of if you want to pull out capital gains. I can go into greater detail on the Roth in the future. In 2023, you can only contribute $6500 to a Roth IRA. It takes less than 10 mins to create. Your future self will thank you.

I invest exclusively in Vanguard’s total stock market index fund VTSAX which has had over 7% rate of return since its creation decades ago.I’m a lazy, long term investor. I’m not trying to pick stocks and lose all my money. Until I learn more about other investment vehicles, VTSAX is my ‘safety’ plan.

I have a 401k with Fidelity and I know Fidelity has brokerage accounts as well. The set up is pretty simple as well. I attempted to set one up and since I already have a 401k, both accounts link together under one profile. Here, you can create a fidelity brokerage account.

Fidelity has its own popular index funds such as FXAIX and FSKAX similar to those at Vanguard.

I am not too sure which is better than the other but the end result is same. Long term & consistent investing in the entire US stock market is a lower risk, high return investment.

If you have any other index funds to recommend or any questions or rabbit holes I can dive in, comment below. You can also dm me @genzfirebaby on instagram.

xoxo Gen Z Fire Baby