$400,000 by 28. You can do it too!

I'm 28 years old and I have $400,000 in savings and I won't women to talk about money more. So we've covered savings accounts, retirement accounts, and now we can finally talk about the real way to build wealth, which are brokerage accounts. What is a brokerage account? A brokerage account is just an investment account you can open through a broker. The big three brokers are Fidelity, Vanguard and Schwab. Brokerage accounts are such powerful wealth building tools because they don't have any limits on the amount of money you can contribute. There's no penalty to pulling out your money other than having to pay capital gains. They're easily the most flexible investment account that exists. But a brokerage account is just a container. Once your money is actually in there, you need to invest it individually in the market. So what is this market that everyone's always talking about? The market just refers to the stock market. The stock market is a marketplace that allows you to buy individual ownership stakes in companies. So your Apple's, Google's, Amazon's, Meta's. Whenever people say the market is up, they mean the S&P 500 is up. Historically, the S&P 500 have always seen gains over the long term. There of course have been crashes to the S&P 500, like in 2008 and again in 2020. But historically, the market has always recovered. Buying into the S&P 500 is the equivalent of buying into the US economy. There are three things you can purchase within a brokerage account. The first is individual company stocks. Let's say you decide you want to buy a piece of Apple, you can buy that directly through your brokerage account. The other two things are known as index funds and ETFs. Index funds and ETFs allow you to buy a tiny piece of all 500 companies at once, rather than having to bet on individual stocks. That means when the overall market and US economy is doing well, you'll be doing well. Historically, the S&P 500 has returned about 10% over the long term. However, the past few years have seen historically high gains, and it's been returning about 20%. What that means is if I had $100,000 in the market, historically I'd expect to see a $10,000 gain every year. Over the past few years, I've been seeing a $20,000 gain. Which means if I had $100,000, I'd expect to see a $10,000 gain every year. Over the past few years, I've been seeing a $20,000 gain. What I'm about to say isn't financial advice, it's just what I do based on what I've learned. Generally, I don't mess around with individual stocks without access to specific information. Buying individual stocks is essentially gambling. Losing $50 at a slot machine in Vegas would be the extent of me gambling with my money. I much prefer to deal with ETFs and index funds. That way I know if the general economy is doing well, I'll also be doing well. If you're wondering the difference between an ETF and an index fund, they work almost identically. The difference is that an ETF can be traded like a stock throughout the day, but for most beginners, the difference is completely nominal. Some of the most common S&P 500 ETFs are VOO, SPY and IVV. If you want to invest in the general US market rather than just the S&P 500, VTI is the most popular ETF for doing so. Your homework for this week is pretty simple. If you have your 3 to 6 months emergency fund already established, you can consider putting your first $50 into the market. Research one or two of the popular ETFs that I mentioned and consider putting your first $50 into the market.