4 Best Investing Strategies If You Make $60K, According to Ramit Sethi

Core Insights - The FINRA Foundation's National Financial Capability Study indicates that 48% of respondents had no investments in 2024, highlighting a significant barrier to wealth growth across income levels [1] Investment Strategies for $60,000 Earners - Money expert Ramit Sethi suggests that individuals earning $60,000 should not let limited extra cash deter them from investing [2] - Sethi emphasizes the importance of starting to invest at least 5% of after-tax income to benefit from compound interest, with the option to begin at a lower rate if necessary [4] - Increasing the investment rate by just 1% annually can lead to substantial wealth accumulation over time [5] Tax-Advantaged Accounts - Prioritizing tax-advantaged accounts is recommended to defer or avoid taxes on investment growth [6] - For those with 401(k) accounts, contributing enough to receive the maximum employer match is crucial; an example shows that saving 3% of a $60,000 income for 30 years at a 7% return could yield over $351,000 with a match [7] - Alternatives like traditional IRAs and Roth IRAs are available for those without a 401(k), each with distinct tax implications [8] - Health savings accounts offer a unique triple tax advantage, allowing tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses [9]