Your first account, and what to put in it

0 of 7 read

1. Step 1
   An account is not an investment

   The single most useful thing to understand about money, and the one most people were never told. The box and the thing inside the box are two different choices.

   8 min
2. Step 2
   Compounding, and why the early years look boring

   Growth on growth. The arithmetic is simple, the patience it asks for is not, and the usual illustrations hide a few assumptions worth naming out loud.

   8 min
3. Step 3
   What a one percent fee costs over a working life

   The fee is small. The share of your ending balance it takes is not. The arithmetic is short and worth seeing once, because after that you cannot unsee it.

   7 min
4. Step 4
   Workplace plans: the 401(k), the 403(b), and the TSP, from the first paycheck to the last

   Everything a person needs to open one, fill it, hold the right things in it, avoid the traps, and carry it with them when they leave. Long on purpose, so that one page is enough.

   22 min
5. Step 5
   Roth or traditional: two jars, one tax bill

   Pay the tax now or pay it later. That is the whole choice, and it turns on one number nobody knows: what your tax rate will be when you are old.

   10 min
6. Step 6
   Funds: what you actually own when you buy one

   Both kinds are baskets. The differences are in how you buy them, how they are priced, how they handle taxes, and what it costs to hold them for decades.

   9 min
7. Step 7
   Spreading it out and betting big: what each one protects you from

   Owning many things removes one kind of risk and leaves another one completely untouched. Knowing which is which keeps the word from turning into a slogan.

   8 min