Week 3 · 50 minutes
Open Your Investment Accounts
Get money into the market before you feel ready.
The big idea
Time in the market beats timing the market. Week 3 is about opening the right accounts in the right order and funding them automatically.
The Financial Order of Operations.
The funding ladder
Order matters far more than fund selection. Follow it top to bottom and stop where your money runs out.
- 1. Employer retirement plan up to the full match — it's free money
- 2. Pay off high-interest debt
- 3. Roth IRA (or local tax-advantaged equivalent) to the annual limit
- 4. Back to the retirement plan up to the limit
- 5. Taxable brokerage for everything beyond
Why tax-advantaged accounts win
Tax drag compounds against you the same way returns compound for you. Sheltering growth for decades is one of the largest free wins available to a normal person.
How a Roth IRA can make you a tax-free millionaire.
Start small, automate immediately
A small automatic contribution you never cancel outperforms a large one you plan to make later. Set the amount low enough that you don't renegotiate it monthly.
If you're wondering what to invest in.
Active learning check
Are you capturing 100% of your employer match? If not, what percentage are you contributing today?
Not capturing the full match is the most expensive mistake in this course.
Lesson quiz
3 of 4 to pass1. What comes first in the funding ladder?
2. Main advantage of a Roth account?
3. You have $2,000 and a card at 22% APR, plus no employer match. Best use?
4. You feel the market is too high to start. What does the course say?
Practice tasks for this week
Do these after the lesson, before you start Week 4.