Investing Best 3 ETF Portfolio in ROTH IRA vs Brokerage vs 401k
Вставка
- Опубліковано 25 сер 2024
- How to invest in the 3 Fund Portfolio in the ROTH IRA vs. Brokerage vs. 401k. How you will get rich in ETF investing long term with growth ETF, dividend ETF, S&P 500 ETF and more! Allocate the correct percentage into each fund based on the different investing account.
#etfinvesting #growthetf #dividendetf
Join the Patreon Group for EXCLUSIVE content: / investingsimplified
Live stock purchases, live Q&A exclusive ZOOM for members only, and a very strong investing community to network with so we can all reach FINANCIAL FREEDOM FASTER!
Dividend Masters Course: investing-simp...
The ONLY Dividends course you’ll ever need!
For Private Financial Coaching 1hour Zoom Session: ProfessorG.invest@gmail.com
Click here for 5.1% APY+3% APY booster + Up to 15 Free Stocks ►j.moomoo.com/0...
Other Videos You'll Enjoy!
💰Ranking BEST S&P 500 Funds: • CONFIRMED: Ranking Bes...
💰Own THIS MANY Stocks and ETFs: Perfect Portfolio: • ULTIMATE Investing Por...
💰3 ETFS THAT MAKE YOU RIDICULOUSLY RICH: • 3 ETFs THAT MAKE YOU R...
💰 Best Order to Invest Your Money in 2024: • Optimal Order for Inve...
💰If I Started Investing Today (From $0), THIS IS WHAT I'D DO: • If I started Investing...
💰SCHD - BEST DIVIDEND ETF: • SCHD: SIMPLE PATH TO W...
💰 SAVE MORE MONEY (better than a budget): • SAVE MORE MONEY (witho...
💰5 Best ETFs FOREVER in ROTH IRA: • 5 Best ETFs to Buy and...
*All content on my UA-cam channel reflects my own opinions and should NOT be taken as legal advice, financial advice or investment advice. Please be safe and seek out guidance of professionally trained and licensed individuals before making any decisions.
DISCLAIMER: Links included in this description might be affiliate links. If you purchase a product or service with the links that I provide I may receive a small commission. There is no additional charge to you! Thank you for supporting my channel so I can continue to provide you with free content each week!
My Roth IRA just hit 52k for the first time ever!!:)) 💪🏻💪🏻💪🏻
Let’s gooooo!!
Cash it in and re-invest it into QYLD!!!
@@MDC249 😂😂😂
I don’t know you but I’m happy for you.
@@cordybluejeans thank you!! 🙏
You give us clear, concise, information without selling us anything. By far out of all the financial channels I’ve seen on UA-cam, I’d say yours is the best
Same I always look forward to new stuff!
In my 50s and have learned soooo much from your videos. I wish I knew this back in my 30s. Just sent this video to a 20 year old who asked me questions on this very topic. Keep up the good work and research!! 👍🏻👍🏻
Amazing! I’m glad I could help!
What are the titles of those books in your background?@@NolanGouveia
I started my daughter a Roth IRA: 50% VGT, 25% VOO & 25% VIG.
Nice!
Great choices. I have QQQM instead of VIG.
Good choices but maybe too much overlap of the 10 companies in VOO and VTI. Perhaps consider a Solid dividend ETF like SCHD or JEPI instead of either VOO or VTI
You have changed the game for me and my portfolio. Thank you for everything!
That’s amazing!!
This is a great video!!! And the clarity I needed at the perfect time as we are just starting to invest in our taxable bridge account, since we've maxed our 403b and Roth IRAs, and I was having a hard time finding videos explaining the differences. I learned a lot and it certainly makes our strategy and plan clearer now. Hooked on your videos!
Thank you so much for the kind words and feedback! I appreciate it so much 🙏
I'm 53 and have been investing since my 20s and whether it be from reading or discovering content such as yours, i'm always open to learning something new. I've adapted your 3 fund philosophy and i have to say it really does make sense. Even though i'm closer to retirement i've always been quite aggressive and the only bond exposure i have is in the Wellington fund. I will say that in taxable brokerage accounts i try to keep higher yielding stocks and funds to a mimimum and stick with growth and blend. Thanks for the new perspective!
One comment on the brokerage. While taxes can eat up a portion of the dividend payments, the tax on them can be as low as zero, depending on your income. This can be great for a person in retirement.
Very true! Good call
Qualified dividends and long term capital gains tax are rewards for holding investments for over a year
this is exactly the way I think. Capital gains on couples married filing jointly can be zero percent up to about $90k in income for a taxable brokerage account. There is no zero percent tax bracket on a 401k. Any money you withdraw even dividend are taxed as income. If you have a Roth 403b/457b I like to max that out even if the investment choices are not as good. Just like Nolan I put all my Roth 457B into an low cost S&P 500 fund. Also I use the proceeds from my brokerage account to replace my income from my paycheck until I hit the max. Yes you take a tax hit from dividends in a brokerage account, but a great quote I once heard is never be afraid of paying taxes because that means you made money. In a regular brokerage account you can always turn DRIP off, and pay the taxes quarterly then reinvest the rest. Personally I let it drip for the first three quarters and then just pay me in cash the last quarter of the year. Then turn over Q4 proceeds to my greedy uncle SAM.
Could be as low as zero, but for most, unlikely
@@matthewcalton4686 Actually, that's incorrect. For a couple, with a standard deduction of about $27,000, they can earn over $115,000 and have 0% Federal tax on qualified dividends.
Thank you so much professor !! you nailed it..this is exactly i was searching for since last 2 months!
Amazing!
You forgot to mention the Rothp 401(k). The brokerage account is somewhat tax advantaged. It is generally taxed at only long term capital gains rates (as long you’re not day trading or something), and it’s initially tax free to heirs, due to the step up in basis. If it grows after being inherited, the heirs will only owe taxes on the new growth.
I like it. I do a 50/50 growth (QQQM) and market (VOO) fund in the Roth. The idea is to sell at retirement and convert it to a dividend fund such as SCHD and JEPQ for more income all tax free. You can play with the percentages based on the income needed.
Love the videos! You should talk about the benefits of long term gains taxes in a brokerage account compared to how withdrawals at retirement age from a retirement account are taxed.
That’s a good idea!
You touched on it a little could you talk more about qualified and unqualified dividends as well as short and long term capital gains tax and how they apply to the brokerage account.
keep pumping out those financial informational videos Professor G!!!!
I use 100% FXAIX in my 401k since it's my best option (it's a low cost S&P), 100% QQQM in my brokerage account because it's great for a taxable account and I feel like it's the single best fund I'll never regret buying since my goal is long term growth, lastly I use a 50/50 split between SCHD AND SMH semiconductors in my ROTH IRA, this way I can have the dividend diversity without the tax hit.
Was investigating this yesterday. Great timing! 😀
Amazing! Did you come to similar conclusions?
@NolanGouveia I haven't finished yet, but found largely the same considerations. My accounts are not very well balanced in size, so I expect that the allocations within each account may be more extreme than you suggested to optimize the advantages of the account type. My 401k has some pretty poor fund choices, so that is probably all S&P500, whether I want it there or not. Will also be splitting the ROTH between Dividend and Growth. Taxable will be where I adjust to get the right overall allocations. Cheers!
This information is so much better than the investment class I took in college
I appreciate the support and great feedback!
Best financial UA-cam channel out there!! Keep up the grind prof G!
Thankyou so much!
Love it Professor G!
I’m heavy in Splg, Schg, Schd plus i mixed in Ftec and SMH
Professor, I want to thank you for sharing your knowledge! I'm a fan of the KISS principle, so your videos appeal! I love the modern balance of your three fund portfolio concept. One thing I have considered is going heavy on a growth ETF in our ROTHs, then converting (tax free) to a dividend focus closer to our slow go years. Haven't pulled the trigger because you never know where the market will be, esp with the growth funds. I'll probably stay with the three fund. Again, thank you!
Blessings,
Matt and Angie
Definitely an understandable strategy and could be the best one! But I do agree that probably staying a bit more balanced will be very wise
Professor you’re the best ! I’ve learned so much from you. Very simple and to the point ❤ God bless you
Thanks for the kind words Francine!
Hi Nolan, always enjoy your videos and insight. I am very close to retirement (3 years away) and would like your thoughts on what you think a good retirement portfolio would be. Something like high dividends for living (reinvesting some of that as well to keep things growing) while still having some of the portfolio in more traditional growth ETFs, etc. I would be looking to replace a low 6 figure salary on say a $1,500,000 401(k) at retirement. Just some general recommendations if you think this would be a good video, etc. I think it would be a video that your "older" audience would enjoy and find specifically useful. Thanks again!
This was a great video. I really appreciate the explanation you provide. It really gives me things to think about for retirement in about 5-7 years. I’m currently working with the new three fund portfolio and a brokerage account thinks your videos and knowledge. 👍🏾
Thank you so much for the kind feedback!
I’m curious if you have a video or could make a video explaining the reasons to choose ETFs over mutual funds
It usually comes down to fees. If the fees are similar then you are good
Excellent video! I actually proposed this exact question on the video you posted 3/4/24.
Not just you Professor G most people forget that if you're in the two lowest US federal tax brackets your qualified dividends and long-term capital gains are taxed zero percent in a taxable brokerage account. Now if you're in a state that has a state income tax regardless of holding period your capital gain is taxed as ordinary income.
Thank you! Side note: you sound exactly like JP Sears 😊
I’ve heard haha! Thanks for watching
Very informative, thank you Professor G! Hope to talk to you soon. -Nick
I like your simplified and effective approach. It might be good to mention the lower tax rates for qualified dividends and long term capital gains associated with some of these ETSs. I’m retired and think it’s great how most of the dividends from dividend ETFs like SCHD or VYM are qualified and essentially free income even from my taxable account.
I see your stellar list of books. Have you done a top recommended books video?
You're amazing very helpful,
I don't see in near future 12/24/36 months a need for my cash I saved.
How should I invest it to :
1. maximizing my growth.
2. not pay taxes on the savings.
3. Is it possible if need it to pay taxes on the growth when I Withdraws .
P.s we plning to retire overseas.
Thanks a million
I love you videos as always. They give me alot of ideas of how to structure my investment. I’m your true fan!!!! 😊😊😊😊
Thank you!
Regarding a brokerage account, it's very important to understand short term and long term capital gains tax. If you need to sell shares to rebalance or adjust, make sure to sell shares that you have held for over a year.
I'd love to hear more folks talk about the Roth 401k... more and more employers are offering standard and roth contributions to their 401k accounts.
I have had a Roth 401k since 2014. 💪🏾💪🏾💪🏾💪🏾 all my retirement money will be tax free Roth 401k and Roth IRA. If I keep maxing them out I can retire 2 or 3 yrs earlier at 58 yrs old. Luv me a Roth
Hell yea!! Cheers to you and the almighty Roth 💪
@@rolandosouffrain7957wouldn’t someone want some in traditional, like up to the standard deduction?
Excellent video and explanation Prof. G.... as usual.... Always a quality informative presentation..... Looking forward to your future quality presentations and lessons....!!!
Thank you so much!
Great info! May I request a video on paying taxes on dividends in the different tax categories (and how you can pay zero taxes) and also one on paying taxes on long- and short-term capital gains? I've learned a lot from you. Keep up the good work! :)
You should add SPYI. Nice video!
Awesome Video.
Thank you!
Great info here! Thanks Prof.! Would you mind digging more into rebalancing optimal strategy to be smart on taxes, fees etc.? Thanks
Definitely will be doing that soon!
@@NolanGouveia Greatly appreciate it!!! 🔝
Reading Ryan Holiday, good choice!
👌👌
Great video Professor G
Thankyou!
SCHG, SCHD, SPLG MY ONLY 3 in my roth. Brokerage im working on trying to set up 🤷🏻♂️
I would choose fidelity, Charles Schwab, or Robinhood as a brokerage account. I have all 3 plus Vanguard as I feel its best to have your money spread out but I don't really like that Vanguard because unsettle money you can only use that in Vanguard ETF and you can also only buy fractional shares in there ETF. You can buy other ETF's or stocks but you got to wait about a week for the money to settle. I trust Robinhood the lease but I find it the easiest to use for really anyone. Theres plenty of youtube video just show how to set these up and only takes amount 20 minutes.
This was awesome wow.
Thanks!
In roth one can buy SPYI etf or VOO or BIL etf
The logic I have been following is to use my 401k for my foundational bucket, Roth for my growth bucket to maximize tax free growth, and my brokerage for dividends since i will hopefully never be selling them off (not having to pay capital gains and thus worrying less about nav erosion) and only having to pay taxes on the dividends that i can drip or use as income
For tax purpose, roth is good for long term growth funds and that are used for cyclical exposure; brokerage is more appropriate for municipal bonds, index funds, long term growth as well. Ira is best for high turnover and high yielding funds, of course long term growth funds don't go wrong either.
This is awesome! What is the best way to maximize HSA investment account? Thanks 🙏
I don’t even bother doing a dividend ETFs in the brokerage account. Don’t want the unnecessary tax drag right now. Still getting a massive dividend from both Voo and qqqm in there. However, I am thinking about adding a dividend ETF or a rate in my Sep Ira. As I have plans for those dividends now.
Definitely understandable!
Would you mixed in fixed income investments like bonds, cd, money market funds and the like? If so, how much to allocate on each? Thank you Prof. 😊
Just updated my 👌🏽 fund portfolio.. s/o to YOU!
👌 for the win! By 43 points!
i was wondering why you never mentioned XLK for growth 😊
401k 70% Fidelity 500 20% JPmorgan large Cap Growth Growth 10% Row price dividend growth
15 percent each paycheck
When do you sell your shares? Or do you leave it until your retirement?
Good morning Professor G from Texas. Thank you for keeping us updated on your insights. I have a couple of new questions for you. My 15-year-old wants to get a three phone portfolio. Lol. You got them hooked. Thank you. So how about for a 15 year-old? Also with that in mine question is do you have a three stock portfolio that you would think about? For example, Microsoft, google, and IBM? So do you ever teach any online investment class? Not all of us can get out to California.IPPON!
How’s the office?
Ready for your next zoom!!
Good questions and thoughts! For a 15 year old I’d just go when 33% across! The office is coming along
Greatly appreciate your content! By far the best I’ve seen… teaching is certainly a vocation and you have it! I do have a question, is a rollover IRA the same as a traditional IRA? Would dividends be taxed?
Thankyou for the kind feedback! Yes the rollover IRA is a traditional IRA. You won’t get taxed as it grows or on the dividends yearly, but once you make withdrawals in retirement age, you’ll be taxed on that
@@NolanGouveiaWow! You responded… Greatly appreciate your prompt response! It is my goal to watch all of your videos before the end of the month. Thank you very much for providing such value!
@@fernandajaimes4763 amazing! Keep up the great work
Just curious how you would set up an HSA percentage?
I am investing 25% in SCHG, 25% SMH, (in total 50% growth)
Then 25% in SCHD, and 25% in SPLG
I’m very happy with my 15% smh position in my portfolio.
QUESTION. Professor G.
Could you talk about SEP retirement plans for us small business owners. Thank you. Love the chanel!
Hi Chris I’ll start to put something together!
I'm not sure I totally follow the fee concerns. I mean obviously lower fees, better... but if the higher fee one is up 45% and the low fee one is up 20% wouldn't the one with the higher fee make sense?
Obviously if you're getting high fees and lower returns, yeah bad investment... but high fees on something that has been skyrocketing for a few years still seems like a good investment. No?
I don't want to deal with taxes on dividends in a brokerage account. Moved my dividend payers to the Roth. Let it grow. Still have some funds in my IRA that I will need to move to the ROTH. I put 30k into FBTC which is no cost ETF at Fidelity right now that tracks Bitcoin. It's performed very well and not only stabilized my investments, but helped them grow. I wanted something different then S&P 500 companies.
Does this mean you avoid HYSA too?
@@mandypdx I think the question I would ask is why would one invest in HYSA? There is lot's of highly rated great performing investments out there with long track records and stable managers.
@@raykrv6a high yield savings are not really an “investment”
@@raykrv6a hysa = high yield savings account
@@mandypdx I looked at HYSA after you mentioned it. If I can't make 10% or better, I don't invest in it. Even Fidelities cash account only pays 4.87%. Doesn't keep up with inflation, All my investments will be in my Roth.
How about an HSA? It has the most tax advantage, but is also inherently a bit of an emergency fund.
but why buy s&p500 when its actually gettin drifted by nasdaq and not just go schd and qqq?is there a sector other than the main 3(tech-consumer discretionary-health care) that had any meaningful impact all these decades?
Just started this year. Mine is VOO (60%) Schd (20%) QQQM ( 20%) . Is It Good ? Any advice?
I’m nervous to get nailed on taxes with brokerage accounts. I’m focusing just now on my Roth IRA and 457b.
Understandable
Professor G I see you had JEPI in your dividend list for the 3 ETF portfolio why would you not consider JEPQ in the growth position of the portfolio, it currently is doing quite well compared to QQQ. Your thoughts please. Thank you love your content. I am 65 and retired and I am slowly transitioning to your 3 fund portfolio I like JEPQ for the dividend combo with growth.
I’ve seen a lot of retirees evenly split jepi, jepq, voo and qqqm - or combined both those into vti
I need to look more at JEPQ
This might be dumb, but I think an S&P 500 index fund is redundant if you have SCHD and VGT. When the market is up, VGT outperforms the S&P; when the market is down, SCHD outperforms the S&P. Is that wrong?
Professor G For your 403B or 401K if you have an option between putting it in a Roth or Traditional. How can you figure out which is better for you? Thanks
Great video...I retire in a month...whoop whoop..I like simplicity...how is this.. roth..all vanguard dividend growth...403b all vanguard Wellesley income...brokerage which has inheritance ...SCHD and a big chunk of cash
Should i add bonds and international index fund? I currently have fxaix and schd only.
I don't get the purpose of a foundation if the foundation is worse then the growth and dividend combined why not just do 50/50 the safe diversified dividend and the growth, or 60/40. As Warren Buffet says deworsification.
One can definitely do that! I just like stability of having a portion in foundational
Hello Professor, Do you know of any ETF that have Fusion Energy companies?
Question I always wondered. If my work sets/chooses the fund I have in my 401k, how do I personally choose a different fund to invest in from my paycheck? Or does it have to be done manually out of personal funds? I use Fidelity for reference
I have:
VOO in Roth IRA. To avoids taxes later.
QQQM in Roth 401k. Also, avoids taxes later.
But I also have SCHD in Fidelity brokerageLink so i can get my company mach, but..... since that's part of the 401k, do I still pay taxes on the dividends later, or do I have to pay taxes every year???? 🤔
In a Roth you don’t pay taxes once you’re 59 and half. 🤦♂️ that’s why is so good and you have a limit of 7,500 per year.
@@OscarCastillo-fl9dwBrokerakelink is different than a Roth IRA :)
Unfortunately only the brokerage one is available in Italy
Question: is it pointless to invest in non-dividend paying stocks in a traditional IRA? Traditional IRAs are tax deferred. You don't get text on unrealized capital gains. So, if I bought Amazon in my traditional IRA and held for 30 years and then took it out and got taxed on it when I retired, I didn't take advantage of the tax-free growth correct? It would be more advantageous to invest in dividend paying stocks in a traditional IRA to take advantage of the tax free growth? Or am I missing something? Thanks! Great channel!
My plan is to stick to 401Ks and do a 72T at 55 to retire early.
So if keep putting money in VNQ,VOO,QQQM, and SCHD I will have a nice little nest egg when I retire?
Those are all great funds and have done well so that’s what I’m invested in and so I hope so!
I have an option for a traditional or Roth 401K. Do you have any information as to which is should contribute to?
I would use
SCHD
SCHG ( After next crash )
IJR
RQI (only in Rorh )
I have a Roth and a 401k and am looking to open up a brokerage account. How am I able to actually enjoy my money now if the strategy with index funds is really time and compound interest?
Part of the secret to success is delayed gratification, but I’d still have a portion of your monthly income going toward something you can enjoy. It’s all about balance!
Outside of safety for someone closer to retirement or for income, I am still struggling to be a believer of something like SCHD which is often going to underperform something like the S&P or growth funds. Could you do a video at some point that puts some examples together of numbers of why it would or wouldnt be better to just focus on total return and then invest in dividend stocks/funds closer to retirement? I realize that something like SCHD over time does decent compared to S&P because the drawdowns are smaller in bad years but that also assumes that you invest X amount and let it sit, it doesnt account for investing additional money in something like S&P or growth funds during those drawdowns and reaping the rewards of accumulation during those periods.
I second that! I cannot see why I would buy schd over voo or schg when the overall returns aren’t even close. I guess if one needs the money, then schd would be a good choice. But still, in the long run, it doesn’t make sense.
Awesome!
If you make over the 160k limit what would you recommend outside of Roth IRA? Just a regular brokerage account?
I’d do a Roth back door conversion
What do you think about XAR and ITA?
I have qqqm and schg in my tax free account. I don’t bother with a dividend etf like schd because schd averages about 12% per year (gains plus dividend) while schg averages about 25%-30% a year. Why bother with schd? It’s all about total gains for me. After all, isn’t that what this is all about?
Hey professor, should I only have a Roth IRA that I use to invest, if I can't afford to do both a brokerage and a Roth IRA? Also how old were you when you seriously started investing?
If I’ve already invested in my Roth a little differently would you recommend selling or exchanging to stack it all into schd and qqqm?
If you do the research and make the decision that that is better for your investing goals, then yes switching those over within the Roth is very easy since there is no tax hit
Professor G, i am 100% VA disabled veteran, with federal disability income as well, I am learning, thanks for videos, i am 54 and no 401k, and how would you tweak recommendations for disabled veterans who are living off their pensions and some with federal disability, i pay no property taxes, i lost my federal job because of injuries and would like to learn but feel completely out of place..oh i plan to open roth ira asap, but because i am and a lot veteran friends are on fixed income, it would be great how you would tweak if at all the 3 strategy options you have laid out, thanks again..
Hello - thank you for what you do! I have a a Roth IRA and in that Roth I hold VTI, QQQM, and SCHD. What are your thoughts on that ?
That looks perfect to me!! Great job!
Thank you!
Would it make sense to have 30 percent on Target date fund, 40 percent on an S&P 500 fund and 30 international? Should investing on target date fund be by itself?
I have QQQM in my brokerage acc. Should I sell those and take the money and buy them back but in my ROTH IRA?
Professor G, is it OK to have the MUTUAL FUND equivalents of VTI, VYM, and VUG in my Roth so that I can take advantage of the automatic investing? Thanks
Yes definitely just make sure the fees aren’t too high!
@@NolanGouveia VHYAX, VIGAX & VTSAX 👍
@@NolanGouveia FYI: someone with the user name nolangoveiiaa is imitating you. You might want to when your followers.
My son, who just turned 18, wants to start a 3 fund portfolio on robinhood. I suggested SCHD be one of them. Any suggestions on what the other 2 should be?
why would your 403 be so different investments than your traditional ira?
Fees mostly
my employer not offering 401k, can i open IRA and invest? And how to take/declare tax benefit while filing. I already have ROTh IRA
I invested in VTI for my foundational, SCHG and QQQM for growth, and SCHD for dividends. Are these solid picks?
Extremely solid!
@@NolanGouveia thank you professor G🫶
Question do you hold (some) of the same funds in each of your accounts ?
I do yes!
Investing in higher-risk assets like QQQ, QQQM, and VUG within a Roth IRA is a considerable gamble. If these volatile stocks plummet to zero, the contributions are lost irretrievably and cannot be replaced until after age 50, with only limited catch-up contributions available. For instance, allocating 33.33% of your $7,000 annual contribution to these stocks means risking $2,333 each year in post-tax dollars. Furthermore, the IRS does not allow annual loss deductions from a Roth IRA; losses can only be recognized by closing the accounts entirely. This presents a substantial drawback. Having said that, I feel a conservative approach with a Roth IRA is prudent, as financial stability after age 50 to use catch-up contributions remains unknown.
I have a question, what do you to think the future returns could be for vgt , xlk ...do you think they will continue to guve 18-20 percent return for the next 40 to 50 years , or do you think they will nit be able to maintain that ....i am going 50 percent foundational etf and 50 percent xlk ....i am 20 years old. .but i am confused uf vgt abd xlk will keep up their growth or not
i'm all in on SMH, QQQM n VGT. i'm i screwing myself with this ????