Guide To Investing, In Order Of Highest Returns With Lowest Risk (In US)

financial independence
wealth management
Posted on . 1 min read

Author: Gagan

Here’s my handy guide to investing, in order of highest returns with lowest risk (in the US):

401k Match: Because employer match is literally free money.

401k Maximum: The tax savings on 401k contributions are hard to beat in terms of implicit returns.

ESPP Max: Minimum 15% returns every six months, or 30% returns annualized. Free money, if you ask me. If your employer offers ESPP, maximize this post-tax contribution.

S&P 500 Index Fund: For investing excess post-tax savings to get around 11% return per year, with zero time investment.

Individual Stocks: If you have expertise in a particular sector and geography, you might be able to pick a few stocks that could potentially do well in the long run. But if you just want to copy Warren Buffet or your cousin Johnny without having knowledge about the companies yourself, it will be pretty hard to beat the S&P 500.

Real Estate Investing: For primary residence, this can be higher. For investment purposes, the time investment makes it a little less attractive.

Of course there are other options (Crypto, Gold, Bonds, Commodities, Derivatives, CDs etc) as well depending upon your risk tolerance.

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