💰If I Was Starting from 0, Clueless About Investing, and Wanted to Retire A Multi-Millionaire...Here's What I Would Do

“Can you explain it to me like I’m 5 please?”.

This was me when I first started my government job and they told me I could invest in a retirement account.

Where do I start? Invest in WHAT!? How and how often?

Why was this stuff so confusing!?😭

After 20+ years investing in the stock market, I’ve learned some things, made a lot of mistakes, and generated a portfolio of over $600K by age 38.

If I had to start all over again at age 35, knew literally nothing about investing, had a portfolio balance of $0, and still wanted to retire a multi-millionaire — here’s exactly what I’d do.

I personally use Fidelity, but other reputable companies are Vanguard and Charles Schwab — pick whichever one you like.

I chose Fidelity because their customer service is great (you can talk to a real, live person!), they allow you to buy shares in dollars which means you can buy less than 1 share if you need/want to, and they’ve been around for awhile which means they must at least know a little about what they’re doing.

If you care about taxes in retirement, I would open up a traditional or Roth IRA (individual retirement account). How do you choose?

If you think you’re going to make more money and be in a higher income tax bracket when you retire = pick a Roth.

If you think you’re going to make less money and be in a lower income tax bracket when you retire = pick a traditional.

If you’re not that worried about tax efficiency, or you want access to your money penalty-free before you turn age 59 1/2, open up an individual brokerage account (IBA).

They’re all free.

Next, I would connect my bank account to my new investment account.

I would do this by going to my “Account” tab and selecting “Transfers”, then “Send money from my bank” and follow the prompts on the screens.

Now it’s time to buy your first investment!

If you’re not sure what to buy, I would recommend a low-cost index fund or ETF (exchange traded fund) like VOO — which tracks the S&P 500, or VTI — which tracks the total U.S. stock market. These are both baskets of stocks that allow you to instantly diversity your portfolio with reputable, well-established companies that offer decent returns.

And even though these are both Vanguard funds, you can purchase them through Fidelity.

For this example, I’m going to buy VTI — the Vanguard Total U.S. Stock Market Index Fund ETF.

To do this, I’m going to go to the top of my Fidelity account and select “Quote”. I’m then going to search by the 3 or 4-letter ticker symbol for the investment I want to buy — in this case “VTI”. Then I’m going to select the one I want from the dropdown.

Once you select the investment you want to buy, it’s going to bring up a screen that has information about the investment on it. If you already know you want to buy it, just scroll to the bottom and hit “Trade”.

If this is a new investment for you, or you’re curious about what’s in the fund, scroll down and click on “Research”.

This will bring up a screen where you can deep dive into tons of data and analytics about the investment.

What I find most helpful, especially if you’re buying anything other than single company stocks, is to look at the “Composition” tab. Scroll down until you see a small blue hyperlink that says “View All Holdings By Weight.”

This will tell you the number of companies held within the fund, the names of those companies, and the weight of shares that company holds within the fund.

The higher the weight, the more of that fund is made up of that company.

As of the date of this article, we can see that VTI is an ETF made up of 1,172 companies.

Now, I don’t know about you, but buying 1,172 individual companies would not only be tedious, it’d also be expensive.

That’s why I love ETF’s so much for beginner investors — you can buy 1,172 companies with a single click!

Now that we know we want to buy VTI, click on “Trade” or “Buy”. The following screen will pop up and you’ll need to fill out the highlighted sections:

Once you have it set up the way you want, hit “Preview Order” and then “Buy”.

Congratulations — you’re now officially an investor!🥳

It’s awesome that you bought your first investment, but if you’re age 35 and never invest another penny after this initial first $1,000 — I’m sorry to say, but you won’t retire a millionaire, even with the help of compound interest.

So we need to set up what’s called a recurring transfer. This allows us to buy regular, recurring shares of any stock we want, at the frequency we want.

You can do this within your Fidelity account by going to the “Accounts” tab at the top again, click “Transfers” → “Set up recurring transfer” → “Create New Activity” → “Investment” → and select the investment you want to buy, the amount you want to regularly buy, and the frequency (weekly, biweekly, monthly etc.)

You can change or cancel these at any time using the same process.

It’s little more nuanced than that, but seriously — if you wanted to — you could do just “set it and forget it” and you’d be further ahead than 90% of people out there.

But, if you’re 35, starting from 0, and want to retire a multi-millionaire by age 65, you’d need to invest $1,500/month for the next 30 years.

The best part is, of that say $2 million — over 30 years, you’d only have contributed $540,000 of your own money. The other $1.46 million? That’s all free money from compound interest!

Now you might be sitting here reading this saying, “but Charlie, I don’t have $1,500/month to invest. Can I still do this?”

Absolutely!

Start with whatever amount you recommend and work your way up from there. Know you won’t have as much money as someone who started younger, or can contribute more, more often…but some free money is better than no free money right?

Hope that helps!

If you’re still unsure, or have questions — reply to this email or leave them in the comments if you’re reading this on Substack.

Your friend,

Charlie | Your Wealth Hype Girl

📌P.S. I’m working on something really cool for Black Friday! It’s a tool that will pour rocket fuel on your investing journey. It’s pretty much like having me in your back pocket!

Because we’re email friends, you get first access and a special discount. Reply “DISCOUNT” and I’ll add you to the waitlist.

Disclaimer: Not financial advice. For educational purposes only.