About this Video

• Video Title: You're Investing in the Wrong Order — Here's What to Do Instead
• Channel: George Kamel
• Speakers: George Kamel
• Duration: 13:32

Introduction

This video outlines the optimal order for investing to build wealth. The speaker emphasizes that incorrect investment sequencing can be costly and details a step-by-step approach, including prerequisites and different account types. He also introduces specific investment strategies and diversification techniques.

Key Takeaways

1. Financial Readiness: Before investing, eliminate all debt except mortgages and establish a 3-6 month emergency fund.
2. Investment Allocation: Invest 15% of gross household income into retirement accounts. Prioritize employer matching contributions (100% return) in a 401k or similar plan.
3. Retirement Account Order: Maximize Roth contributions before traditional tax-deferred options.
4. Investment Choice: Use mutual funds for diversification. Diversify across four types: growth and income (large-cap), growth (mid-cap), aggressive growth (small-cap), and international.
5. Beyond Retirement: After maximizing retirement accounts, consider a backdoor Roth IRA or mega backdoor Roth 401k for high earners, a health savings account (HSA) for triple tax advantages, and finally, real estate (with caution and cash purchases).

The four types of mutual funds suggested are:

1. Growth and income funds (large-cap): Large, stable companies like Microsoft, McDonald's, and Walmart.
2. Growth funds (mid-cap): Mid-sized companies like Facebook, Google, and Uber.
3. Aggressive growth funds (small-cap): Smaller, potentially more volatile companies like Roku, GoPro, Sonos, etc.
4. International funds: Companies based outside the U.S., such as Toyota, Nestle, Nintendo, etc.