The True Story Of Why I Have Multiple Investment Accounts
I confess. I have multiple investment accounts outside of my retirement account. As a minimalist, you would think I would only have one, but nope, no minimalism when it comes to my investment accounts.
Multiple investment accounts help me feel strategic about my money. See, I truly believe that in order for us to use money effectively, it needs to have a purpose and there needs to be an organizational system behind it. If you’re contributing blindly into any investment accounts but don’t know why it’ll be hard to see the light at the end of the tunnel. For me, I envision what each of my accounts will do. Let me share with you my vision.
Work ROTH 401k
I can’t afford to max this account for the year, but if I could I would. I contribute monthly to this account and it comes straight out of my paycheck. This account will provide me with tax-free retirement money after the age of 59 ½. This will pay for me to live a very long, but comfortable age. A little traveling doesn’t hurt too! Once I quit my current job I will rollover this ROTH 401k into my rollover IRA account. Keep reading…
Vanguard Traditional IRA
This account is technically my rollover account. Every time I leave a job I rollover into this one main account. This account will also fund my margaritas in retirement after 59 ½!
Fidelity ROTH IRA
I contribute $500 every month so I can max it out for the year. I look forward to having this account be tax-free after 59 ½. I also love the fact that if I ever want to withdraw the contributions I can. Not planning on it, but it’s nice to know!
Ameritrade- Taxable Brokerage account #1
This is the first account I ever opened as I was learning about investing. I can access my assets at any point without any penalties. The money in this account will be used in case I choose to retire before 59 ½, or possibly even a down payment. The possibilities are endless with this account due to the fact my money is not locked in. I will have to pay taxes though on any gains, so I gotta keep that in mind.
Taxable brokerage account #2
Folks, you’re going to gasp… I decided to invest my down payment money. I don’t recommend anyone do this unless you’ve thought about this carefully. I have chosen to do this because I’m not 100% sure I want to buy property, or when, and even where. I decided to create a down payment fund I add to every month. If and when the time is right and my account has grown, I can sell my assets and use them for a down payment. My plan is to hold my assets in this account for at least a year so that if I choose to sell I will only pay long-term capital gain taxes. Again, this is a very personal decision and not one I advocate for everyone.
Whew! I know I have lots of accounts I fund, but they all have different purposes. I hope that helped! If you have any questions or thoughts hit reply and let me know! I do read all emails and respond!
What do you do? Thoughts? Please share!
