155. Time To Get Obsessed About Tax Advantaged Accounts
Your Guide To Building Wealth With Tax Advantaged Accounts
When I started my first full time job, my mom bothered me for six months to set up my 401K. Finally, I did it and of course it took me less than five minutes. Later, Sammie read Ramit Sethi’s I Will Teach You To Be Rich and recommended that I max our my 401K. I had the ability to do so and took her advice. The money left my account before I paid taxes on it and never seeing it meant I never noticed it was gone.
Now, after taking a two year sabbatical, I’m so shocked how those two tiny moments changed the course of my wealth building journey. I’ve set future Michelle up for retirement and it’s something I don’t have to worry about, even though I’m not in the same position to be contributing to my tax advantaged accounts.
Looking back, it’s wild to me that I didn’t immediately set up every tax advantaged account I had access to and start investing that money. The truth is though, I was intimidated and hadn’t learned about these options when I was in school. That’s why Sammie and I wanted to dedicate an episode to tax advantaged accounts. There could be one small change you can make today that will pay you thousands if not hundreds of thousands of dollars in the future.
We discuss some terms to know with tax advantaged accounts and some common options for people. We also help set a framework for thinking about how much to contribute and what to do once you do.
If there’s a tip you have for taking “advantage” of these tax advantaged accounts, drop it in our comments!
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