How to Invest When You Don’t Have a 401(k)

At 24, I had no clue how investing worked. I didn't know a stock from a bond. Index fund? What's that? My idea of investing was the hope that my childhood Beanie Baby collection might be worth money someday. However, despite my lack of even basic knowledge around the...

read more

The Case for Being Unproductive

Yesterday I took a three-hour lunch. Which sounds excessive and luxurious (and not to say it wasn’t), but I’ve also worked an average of 50 hours a week for the past three months. I’ve worked every weekend, hunched over my laptop, forking oatmeal into my mouth,...

read more

Hurricane Harvey: How You Can Help

I grew up in Houston, the most diverse city in the country, and lived here until 2010. In those two decades, the first decades of my life, I met so many people from so many different countries, backgrounds, and cultures, all with different beliefs, opinions, and...

read more

You’ve Blown Your Budget. Here’s What to Do Next

You've finally learned how to budget. It’s Friday, it’s payday, and you’ve budgeted $100 to last the whole weekend. That should be plenty for a couple of nice meals, a trip to the museum, and maybe even a cocktail or two. Then you get a text from an old friend....

read more

Where Have I Been?

On January 1st, as I hopped on my bike to ride down to the Rose Bowl parade, I got an email on my phone. It read, “I would very much like to represent your book."  A million thoughts raced through my head. Thoughts like: There must be some mistake. Really? My book? Oh...

read more

How I Budget With a Variable Income

Freelancing is great, but there are some things I miss about full-time employment: Free coffee Mingling with coworkers Cheaper health insurance And a steady paycheck. For the most part, my income doesn't vary too much from month to month, but it does vary. Even though...

read more

kristinwong

Hey! I’m Kristin. a freelance writer and journalist (you can find my stuff at Lifehacker, NY mag, the NY Times, and more). Here, I share what I learn about how to freelance, from managing money to digital nomading to figuring out why the Wi-Fi isn’t working. 

What You're Saying

  • James: Albeit not the best way to keep track, but I...
  • shahzad ahmed: i cannot know what i become a free...
  • Jing: Thanks for writing this Kristin! I completely...
  • Kevin: Thank you Kristin! I’ve felt so down...
  • Done by Forty: Solid summary. If we ever monetize...

How to Invest When You Don’t Have a 401(k)

It's easy to invest when your employer offers a 401(k). But what if they don't? Here's how to invest and how to save for retirement without one.At 24, I had no clue how investing worked. I didn’t know a stock from a bond. Index fund? What’s that? My idea of investing was the hope that my childhood Beanie Baby collection might be worth money someday.

However, despite my lack of even basic knowledge around the subject, at the time, I was actually investing without even realizing it.

To make up for a modest salary, my employer had a nice perk: something called a 401(k) match. You save a little of your own salary in a retirement account, and they match some of your savings.

“You have to do this,” an older coworker told me. “It’s basically like they’re giving you money.”

My coworker seemed to know what he was talking about, so I filled out some paperwork and elected to deduct a little bit of money from every paycheck and automatically save it in my 401k. I never missed the money, and a few years later, I had somehow saved $10,000. Later, I would learn how this happened: compound interest, a diverse portfolio, and mutual funds. At the time, though, I still had no idea about any of this. I just saved a little every month and let my employer-sponsored 401(k) do the work. It was a sweet deal.

Note: If you do have a 401K match like I did, you should take full advantage of it. Meaning, save enough in your 401(k) to get the full match from your employer. Let’s say your employer offers to match $1 for every $1 you save with a cap of 6% of your salary and you earn $30,000 a year. That means you can save up to $1,800 of your own salary each year, and your employer will save another $1,800 on your behalf! 

Not everyone is lucky enough to have a 401(k), though. Plus, beyond the match, most experts don’t recommend saving additional funds in a 401(k) because the fees are usually so high and you don’t get much flexibility over your investing options. So how do you start investing if:

  • You’ve hit the match, but you want to save even more for retirement?
  • You’re self-employed or freelance and don’t have an employer-sponsored retirement plan?
  • You have an employer, but they don’t offer a 401(k) benefit?

If any of the above scenarios describe you and you’ve been meaning to learn how to invest or how to save for retirement, you’re probably curious about what kind of account you should even open in the first place. Here are your options. read more…

kristinwong

Hey! I’m Kristin. a freelance writer and journalist (you can find my stuff at Lifehacker, NY mag, the NY Times, and more). Here, I share what I learn about how to freelance, from managing money to digital nomading to figuring out why the Wi-Fi isn’t working. 

What You're Saying

  • James: Albeit not the best way to keep track, but I...
  • shahzad ahmed: i cannot know what i become a free...
  • Jing: Thanks for writing this Kristin! I completely...
  • Kevin: Thank you Kristin! I’ve felt so down...
  • Done by Forty: Solid summary. If we ever monetize...

How to Invest When You Don’t Have a 401(k)

At 24, I had no clue how investing worked. I didn't know a stock from a bond. Index fund? What's that? My idea of investing was the hope that my childhood Beanie Baby collection might be worth money someday. However, despite my lack of even basic knowledge around the...

read more

The Case for Being Unproductive

Yesterday I took a three-hour lunch. Which sounds excessive and luxurious (and not to say it wasn’t), but I’ve also worked an average of 50 hours a week for the past three months. I’ve worked every weekend, hunched over my laptop, forking oatmeal into my mouth,...

read more

Hurricane Harvey: How You Can Help

I grew up in Houston, the most diverse city in the country, and lived here until 2010. In those two decades, the first decades of my life, I met so many people from so many different countries, backgrounds, and cultures, all with different beliefs, opinions, and...

read more

You’ve Blown Your Budget. Here’s What to Do Next

You've finally learned how to budget. It’s Friday, it’s payday, and you’ve budgeted $100 to last the whole weekend. That should be plenty for a couple of nice meals, a trip to the museum, and maybe even a cocktail or two. Then you get a text from an old friend....

read more

Where Have I Been?

On January 1st, as I hopped on my bike to ride down to the Rose Bowl parade, I got an email on my phone. It read, “I would very much like to represent your book."  A million thoughts raced through my head. Thoughts like: There must be some mistake. Really? My book? Oh...

read more

How I Budget With a Variable Income

Freelancing is great, but there are some things I miss about full-time employment: Free coffee Mingling with coworkers Cheaper health insurance And a steady paycheck. For the most part, my income doesn't vary too much from month to month, but it does vary. Even though...

read more