Investment & Retirement: My Journey to Financial Independence — 2021 Updates
Welcome to my journey to Financial Independence. In this journey I am sharing my personal plans to achieve early retirement and financial freedom. If you haven’t read the beginning of my journey, I’d highly recommend the series below.
2020 was a roller coaster year for everyone including myself due to a global pandemic. I’m sure we all had to adjust our personal plans in order to thrive in new living conditions. A lot of events and plans got cancelled in the past year but at the same time new plans started to emerge. Hence I’d like to look back at what had changed last year and what I’m looking forward to this year.
***Below story depicts my personal experiences with investment. This is only for educational purposes about finance and retirement. Since I am not a professional financial advisor I strongly suggest doing research on what works the best for your retirement.***
Auto Loan Paid Off
One of my 2020 achievements I am very proud of was my auto loan being paid off. Now I officially have no debts whatsoever so I can invest my money elsewhere to bring more profit and income.
Main Job and Side Hustle
I’m still working at my 9–5 job with an average pay. I’m thinking about building my side hustles to earn passive income on the side. There are a few options for me to consider but I will stick with writing in Medium for now even though it does not pay me much each month. It will be awesome if I am able to expand my income through Medium platform and attract more readers everyday. Therefore I love to hear more feedbacks from you so I can make significant improvement in my writing and topic selection.
Investment Accounts
It would be a big mistake if I didn’t talk about my investment accounts. Starting this year I decided to open two new brokerage accounts because I still had some post-tax money from my paycheck and I’d rather see it grow in these investment accounts.
Tax Deferred/Advantaged Accounts
My tax-advantaged portfolio consists of 4 accounts: 401k, Rollover IRA, Roth IRA and HSA. This year I will set a bigger goal by maximizing 3 of them (401k, Roth IRA and HSA) out of my paycheck. That means I have to cut back some expenses in order to achieve my goal.
Two New Brokerage Accounts
I opened two taxable accounts, one with Fidelity and one with Vanguard, in order to maximize the amount of money I can save for my retirement. I use Fidelity account for daily trading like individual stock exchange, option trading. For Vanguard account I only invest into index funds, ETFs and high dividend funds. I really want to open two brokerage accounts at the same time so I can compare their compound interests and figure out what type of investor I am: an active or passive investor or mix. This is also a good opportunity for me to learn about stock and how to manage money in every situation occurring in stock market.
Note that I always focus on maximizing my tax-advantaged accounts first before spending the rest of my money for these two taxable accounts.
Should I buy Cryptocurrency ?
There were a lot of discussions among investors about Cryptocurrency’s prices being skyrocketed to the moon last year. Some became millionaires overnight. The question is: Is it worth it to invest in Crypto? I am still unsure if I should add Crypto to my portfolio. Since I am a long term investor, I don’t know where the future of cryptocurrency will lead us. It’s a highly volatile asset to own and I find it’s difficult and expensive to trade and manage digital currencies right now. In the meantime I am waiting for major brokerage firms like Fidelity and Vanguard to start trading Cryptocurrency because it is a good indicator that Cryptocurrency has been stable and adopted by other large companies and banks.
Emergency Fund & Down payment
With all the risks I want to take this year in stock, it is wise to set aside small portion of money in my emergency fund. Additionally, I am saving big in down payment for my future house. On the side note, the housing market in my area is insane as house prices keep going up every month and I afraid I am not able to keep up with the prices with my saving. As of now I’m undecided on whether buying real estates is a best idea. Should I wait for the market to cool down? How long should I have to wait? What if the market did not go down? One thing I know for sure that the best time to buy a house is when I am 100% ready.
2021 Goals
- Max my 401k and HSA accounts
- Achieve 100k in all retirement and brokerage accounts
- Heavily build my emergency fund and down payment.
- Study different methods of stock trading
- Learn how to diversify my portfolio
Feel free to share your personal journeys because you never know if your story has helped someone out there.
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