Why Your 401k Alone Will Not Be Enough to Retire On Part 2 | What the Wealthy Do Ep. 14

Step by Step Series | How to Open, Invest and Use an HSA Like the Wealthy Do | Episode 18

You have probably heard that you should open an HSA. But has anyone actually walked you through what to do after you open it? That is what today is about. This is Episode 18 of What the Wealthy Do and the first episode of the Logistics Series, breaking down the exact mechanics of how these wealth building strategies actually work in real life. The health savings account is the only account with a triple tax advantage: tax deductible contributions, tax-free growth, and tax-free withdrawals for medical expenses. Most people open one, get the debit card, and spend it on copays. That is the wrong move. Stephanie Dorsey walks through every step: how to check eligibility, employer HSA versus opening your own, how to invest the contributions, and how the wealthy use the HSA as a stealth retirement account worth hundreds of thousands of dollars by paying medical expenses out of pocket, saving every receipt, and reimbursing themselves tax-free decades later. A real example: maxing out your HSA at 40 for 25 years at 7% annual growth gives you $290,000 tax free at 65 from $107,500 in contributions. The HSA Quick Start Checklist is in the show notes below. Join the next Sovereign Collective cohort: joinsovereign.co [joinsovereign.co] HSA QUICK START CHECKLISTWeek 1:- Check if you have an HDHP (ask HR or check benefits portal)- If yes, check if your employer offers an HSA- If yes, enroll during next open enrollment- If no, open one with Fidelity Week 2:- Max out contributions ($4,300 individual / $8,550 family)- Set payroll deduction or automatic monthly bank transfer Week 3:- Log into your HSA provider- Move funds to investments (keep $1,000 to $2,000 in cash)- Invest in low-cost index funds Week 4:- Set up a system to track medical expenses- Pay all medical expenses out of pocket- Save every receipt Every Year:- Max out contributions- Rebalance investments- Keep saving receipts- Watch it grow tax-free This podcast provides financial education and not financial advice.

What Are Bonds and Why Does Smart Money Live There Part 3 | What the Wealthy Do Ep 17

This is the episode where everything comes together. This is Episode 17 of What the Wealthy Do, Part 3 and the finale of the Bonds Series. In Part 1 we covered what bonds are and why smart money never ignores them. In Part 2 we broke down how interest rates and the yield curve affect bond prices. Today Stephanie Dorsey builds the actual strategy. How much should you allocate to bonds? The old school rule of investing your age in bonds is outdated. The wealthy allocate based on where they are in life, what is happening in the market, and what their goals are. This episode walks through a framework by life stage, from investors in their 20s through 40s holding 5 to 15% in bonds, all the way to investors 60 and beyond thinking about 40 to 60% bond allocation and using bond ladders to create predictable retirement income without selling stocks during a downturn. Which bonds should you buy? This episode covers US Treasury bonds, TIPS, I-bonds, municipal bonds for high earners, investment grade corporate bonds, and bond ETFs for investors with less than $50,000 to put into bonds. The bond ladder strategy is explained in full, including how to reduce interest rate risk, create regular cash flow, and control when and how you reinvest as bonds mature. Stephanie also covers when to increase or pull back bond exposure and the most common mistakes to avoid. Join the next Sovereign Collective cohort for high-earning Black women ready to build real generational wealth: joinsovereign.co [joinsovereign.co] If this series changed how you think about your portfolio, share it with someone who needs to hear it. Leave us a five-star review and follow the podcast so you never miss an episode. See you next week. BACKDOOR ROTH IRA QUICK START CHECKLIST Here is your action plan: Step 1: * Open accounts if you do not have them * Open a traditional IRA * Open a Roth IRAUse the same brokerage (Fidelity, Vanguard, or Schwab) Step 2: * Clear out any existing traditional IRAs * Roll old traditional IRAs into your 401k to avoid the pro-rata rule Step 3: * Contribute to your traditional IRATransfer $7,000 (or $8,000 if 50 or older) from your bank to your traditional IRAKeep it in cash, do not invest it yet Step 4: * Convert to Roth IRA (1 to 2 days later) * Log into your brokerage * Convert the entire traditional IRA balance to your Roth IRA Step 5: * Invest your Roth IRA * Buy index funds or target date funds Step 6: * File Form 8606 with your taxes * Use tax software or work with a CPA Step 7: * Repeat every January HSA QUICK START CHECKLIST Here is your action plan: Week 1: * Check if you have an HDHP (ask HR or check benefits portal) * If yes, check if your employer offers an HSAIf your employer offers an HSA, enroll during next open enrollmentIf your employer does not offer an HSA, open one with Fidelity Week 2: * Set up automatic contributions to max out the HSA ($4,300 individual / $8,550 family) * If employer HSA: set payroll deductionIf self-directed: set automatic monthly transfer from bank Week 3: * Log into your HSA providerMove funds from cash to investments (leave $1,000 to $2,000 in cash) * Invest in low-cost index funds (80% stocks, 20% bonds or target date fund) Week 4: * Set up a system to track medical expenses (spreadsheet or app) * Commit to paying medical expenses out of pocket, do not touch the HSA * Save all medical receipts * Every Year:Max out contributions * Rebalance investments if neededContinue saving receipts * Watch it grow tax-free This podcast provides financial education and not financial advice.

What Are Bonds and Why Does Smart Money Live There Part 2 | What the Wealthy Do Ep. 16

Bonds do not exist in a vacuum. They respond to what is happening in the economy, what the Federal Reserve is doing, and what risks are present in the market. And if you understand those relationships, you can predict how bonds will perform, how stocks will perform, and how to protect your portfolio when things get volatile. This is Episode 16 of What the Wealthy Do, Part 2 of the Bonds Series. Last week we covered the basics of what bonds are and how they work. Today Stephanie Dorsey goes deeper into two of the most powerful concepts in finance: the relationship between interest rates and bond prices, and the yield curve. The single most important rule in bond investing is that bond prices and interest rates move in opposite directions. When rates go up, bond prices go down. When rates go down, bond prices go up. Stephanie walks through exactly why using a real example, and what it meant for everyday investors when the Federal Reserve raised interest rates from near zero to 5% in just 18 months in 2022. Some bond funds lost 15 to 20% of their value that year. Investors who understood this relationship either held to maturity or bought bonds at a discount to lock in higher yields. The ones who did not understand it got crushed. The second concept is the yield curve, which Stephanie calls the bond market's crystal ball. The yield curve shows what return you would earn today if you lent money for different lengths of time. A normal yield curve slopes upward because longer term bonds pay more than shorter term ones. But when it inverts, meaning short term bonds start paying more than long term ones, it has predicted every major recession in the last 50 years, typically six to 18 months before it happens. It happened in 2006 before the Great Recession. It happened in 2019 before the COVID crash. Sophisticated investors watch the yield curve obsessively. And now you will too. Join the next Sovereign Collective cohort for high-earning Black women ready to build real generational wealth: joinsovereign.co [joinsovereign.co] This podcast provides financial education and not financial advice.

What Are Bonds and Why Does Smart Money Live There | What the Wealthy Do Ep. 15

Nobody is making TikToks about bonds. Nobody is talking about treasuries going to the moon. But the bond market is two to three times bigger than the stock market. It is the foundation of the global financial system. And if you do not understand bonds, you really do not understand how money works. This is Episode 15 of What the Wealthy Do and the first episode of the Bonds Series. Today Stephanie Dorsey breaks down everything you need to know about bonds starting from scratch, in plain language, no finance degree required. A bond is simply an IOU. Instead of borrowing money from the bank, you are the bank. You lend money to a government or a corporation. They pay you interest every six months and return your full principal at maturity. It is predictable, stable income that the wealthy have always used to preserve capital, generate cashflow, and balance the risk in their portfolios alongside stocks and alternatives. This episode covers what a bond is and how it actually works, the key vocabulary you need to know including face value, coupon rate, maturity date, yield, and credit ratings, the different types of bonds including Treasury bonds, municipal bonds, corporate bonds, international bonds, and savings bonds, the two ways to make money from bonds, why the wealthy never ignore bonds even when the stock market is performing well, and the most common myths about bonds that keep most everyday investors from ever using them. Next week we go deeper into how interest rates and geopolitics affect bond prices. In the coming weeks we will also cover what a potential dollar devaluation could mean and how to start incorporating bonds into your own portfolio. Join the next Sovereign Collective cohort for high-earning Black women ready to build real generational wealth: joinsovereign.co [joinsovereign.co] This podcast provides financial education and not financial advice.

Why Your 401k Alone Will Not Be Enough to Retire On Part 2 | What the Wealthy Do Ep. 14

Last week was the problem. This week is the solution. This is Episode 14 of What the Wealthy Do, Part 2 of the Retirement Strategy Series. In Part 1 we covered why relying solely on your 401k is risky, how the retirement tax trap works, and what required minimum distributions will do to your money at 73 if you have not planned for them. Today Stephanie Dorsey builds the actual blueprint. The framework covers three pillars. The first is tax diversification, which means spreading your retirement money across four buckets: tax deferred accounts like your traditional 401k and IRA, tax free accounts like your Roth IRA and Roth 401k, a regular brokerage account, and alternative investments like real estate, private equity, and venture capital. Each bucket has different tax treatment, different rules, and different advantages depending on where you are in your career and what tax bracket you expect to be in at retirement. The second pillar is asset diversification across stocks, bonds, real estate, and alternative assets. The third pillar is income stream diversification so that no single account or market crash can wipe out your retirement income. This episode also breaks down how your retirement strategy should shift by age, from aggressive wealth building in your late 30s and early 40s, to tax optimization in your late 40s and early 50s, to preservation and income planning in your late 50s and early 60s, to tax smart withdrawals and legacy planning in retirement. The backdoor Roth IRA strategy for high earners is covered, along with how the wealthy use portfolio loans to avoid selling their investments, how to think about Social Security timing at 62 versus 70, and the specific action steps you need to take right now to audit and rebalance your accounts. This is one of the most practical episodes in the series. By the end you will have a clear picture of what your retirement strategy should look like and exactly what to do next. Join the next Sovereign Collective cohort for high-earning Black women ready to build real generational wealth: joinsovereign.co This podcast provides financial education and not financial advice.