Free Advice
You’ve got questions, the pros have answers. This week, we tapped Farnoosh Torabi, financial expert and host of the podcast “So Money,” to answer your most pressing questions about getting invested.
Q: I finally have some savings built up. Should I invest it or leave it alone?
Farnoosh: If your savings can easily cover about four to six months of necessary expenses, like housing, food, and gas, then you can confidently invest the rest. If not, keep the cash in a high-yield savings account and continue adding to it until you’ve reached this benchmark.
If I go the investing route, which accounts should I start with?
I recommend focusing on tax-friendly investment accounts. This includes an employer-sponsored retirement account, like a 401(k) or 403(b), where contributions are tax-deductible. In 2023, the contribution limit for these types of accounts for most workers is $22,500. If you don’t have access to a 401(k), check out traditional or Roth IRAs.
What are your top tips for investing in a bear market?
Stay the course. Avoid knee-jerk reactions, and remember nobody consistently outperforms the market. Keep in mind that what goes down eventually goes up again.
Tune out the noise. If consuming the day’s market news makes you anxious, take a break.
Keep it simple. Automate your investments, select low-fee index funds, and if you’re really stressed, consult with a financial pro who can help you regain confidence.
Answers have been edited for length and clarity.
Money Win
“After losing three bidding wars, I closed on my first home for me and my cats.”
— Kelly M (NC). We love a homeownership glo-up. Congrats, Kelly.
For the Group Chat
What do Ugg Minis, Dyson Airwraps, and Colleen Hoover books have in common?
Gen-Z and millennial de-influencers aren’t buying them.
Egg prices are (finally) coming down.
Just don’t tell new “inflation chicken” owners.
Proactive rest is on the rise.
And rich Americans are working less.
Say goodbye to the Great Resignation…
The Great Betrayal might be upon us.
Investment Piece
You work hard for the money, and we’re here to help you spend it wisely. Each week, we’re asking an influential woman to tell us about a purchase they consider a worthy investment. First up, freelance writer, consultant, and digital strategist Lauren Caruso.
Q: What is a recent purchase you made that felt like an investment?
Lauren Caruso: I'm a 34-year-old woman in a committed relationship, and I just started the process of freezing my eggs. We're not ready for children yet but we might want them someday, so I consider this a financial and emotional investment for our relationship and our future.
How much did you spend on it?
It'll be about $17,000 all-in, which includes the retrieval, the medicine for the injections, and five years of storage. I'm a freelancer with an individual insurance plan, and none of it is covered.
Why do you consider it a worthy investment?
While egg freezing isn't a guarantee, my partner and I consider it to be a bit of insurance for our future. It allows us to focus on growing our careers at the pace we'd like without sacrificing parenthood.
Answers have been edited for length and clarity.
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