Here's what we do:
- Max out 401k
- Automated contribution to Roth (up to max), can also use backdoor traditional conversion strategy here
- Automated investment into standard index fund, charles schwab has a robo advisor that will automate all this stuff for you, diversification strategies and keep in line with your goals.
- Crypto (10% risk exposure here, or more depending on your comfort levels)
- Own a home, have used market opportunity to take advantage of cash out refinance, reinvest into our portfolio, simple upgrades to the home and savings.
- Keep debt low or completely gone
- Don't buy expensive stuff
- Take advantage of community supported agriculture if you want to save on food (some places will give you discounts if you order for the whole year)
- For home expenses and major repairs you'll want at the minimum 3% of your loan per year on hand. Try and maximize this so you don't have to dip into credit
- Keep a savings around for other emergencies (if your health insurance plan includes HSA you can take advantage of growth opportunity here, where contributions here will grow against index funds if you can find the right product - health equity is one, fidelity also offers accounts). HSA withdrawals are tax free for medical expenses at any time. When you are over 50 you can withdraw from your HSA for any reason at all you just get taxed for non-health expenses at the income bracket (similar to other retirement accounts).
- save up for goals and things you want like a family vacation
- Minimize your subscription services
- Look into wholesale cell phone plans (Ting, Visible, Google Fi) it uses the same networks and generally can save you money on your existing plan.
- Build simple SaaS projects that can pull in even 3%-5%/year would be a great goal to go for. It's not income replacing levels, but it's enough. Use that to reinvest where appropriate (back into project, or into other areas of portfolio)
The goal is to try and have a portfolio that can beat standard inflation *and* lifestyle inflation.
You would think this is a lot of scrimping and saving but our expenses are quite low just using these strategies. One of the largest expenses we have is food and mortgage payments.
We are considering looking into rental income at some point when the market is in a little bit better buying opportunity. I have friend in Utah that owns a startup called Rentler that does property management as a service. It works quite well so we may end up using something like that to take care of rental investments in the future.
I realize not everyone is at this position in life but it’s basically the same strategy we have used until we could move to the next thing. We started out with minimizing our expenses and putting money away until we could buy a home. Now we have moved onto the standard boring investment strategies that should give a nominal rate of return (not looking for anything massive). After this, as mentioned, rental income might be next.