top of page
Search

Investing Goals: Building a Portfolio That Fits

Updated: 6 days ago

Investing is like building your dream closet

Welcome back to Deeply Invested! We’re deep into our Personal Finance Pillar series, and today we’re diving into the fourth pillar: Investing.


This is one of the most exciting parts of personal finance because it’s where your money can really start working for you. Yet for many, investing can feel confusing or even intimidating. If you’ve ever thought, “Investing is only for professionals,” we’re here to challenge that belief. Anyone can invest, you just need the right mindset and tools.


To help you get started, we’re taking a fresh and fun approach: we’re comparing investing to something familiar - your closet.


That’s right! Your wardrobe and your investment portfolio have more in common than you think. From where you shop (brokerage firms), to the types of storage you use (accounts), and even to what you fill it with (your investments, your closet can teach you all about building a smart, diversified financial future.


Let’s break it down step by step.


Step 1: Choose Your Store - AKA Your Brokerage Firm


Before you can start investing, you need to decide where you’ll do your shopping, aka where you’ll be making your investments. This is your brokerage firm or financial platform.


Just like there are different types of clothing stores, there are different types of brokerages:


  • Big-Box Retailers (Fidelity, Vanguard): These large firms offer a wide range of investment products and services


  • High-End Boutiques (Full-service brokerages): These are more hands-on with certified planners and advisors to guide you


  • Discount Stores (Webull, SoFi): Lower fees, more DIY-friendly platforms with fewer bells and whistles


Find the one that fits your investment style, just like you’d choose where to shop for clothes based on your fashion sense and budget.


Step 2: Set Up Your Storage - The Investment Accounts


Once you’ve picked your store, it’s time to open your accounts - the drawers and shelves where your investments will live.


Here’s how we break it down:


  • 401(k) = The Work Drawer Offered by your employer, this account is often pre-filled with matching contributions (free clothes!). It’s tax-advantaged, but access is limited until retirement age.


  • Roth IRA = The Weekend Drawer You pay taxes upfront (full price now), but enjoy tax-free withdrawals later. Great for long-term planning and tax diversification.


  • Traditional IRA = The Storage Drawer Also tax-advantaged with limits, this is a solid option if you’re looking to reduce taxable income now, and don’t mind paying taxes later when you make withdrawals.


  • HSA = The Secret Shelf Triple tax benefits make this a powerful tool. If you’re eligible with a high-deductible health plan, use it for medical expenses or let it grow like a stealth investment drawer.


  • Taxable Brokerage Account = The Open Shelf Most flexible with no limits on contributions or withdrawals. Great for medium- to long-term goals, but no tax perks.


Each “drawer” has its own rules, benefits, and ideal use case just like how you use different drawers for socks, sweaters, and accessories.


Step 3: Fill Your Closet - The Actual Investments


Now that your storage is set, it’s time to start filling your closet with investments. Think of these as your wardrobe essentials and statement pieces.


Core Investments = The Staples


  • Index Funds, ETFs, Mutual Funds: Like your white tees or go-to sweater. Reliable, essential, and offer broad diversification.

  • Blue Chip Stocks: The jeans you wear every week - steady performers from trusted companies.

  • Bonds: Think of these like your favorite pair of shoes - stable and supportive. Great for balancing risk.


Specialized or Riskier Investments = Statement Pieces


  • Individual Stocks: Trendy items - can be flashy and exciting but come with higher risk if they go out of style.

  • Real Estate: The designer bag of investments, often a long-term hold with value that can grow over time.

  • Crypto: That bold outfit you might wear once in a while. Eye-catching and potentially high-return, but risky and not always suitable for every setting.


As with fashion, the key is balance. A closet full of basics may be too safe, but a closet full of sequins? Impractical. The same goes for your investments.


Final Thoughts: Review & Refresh


Just like your wardrobe changes with the seasons, your investment strategy should evolve too. Life stages, income levels, and goals all shift over time, so make a habit of checking in on your “closet” and adjusting as needed.


We hope this wardrobe analogy helps demystify investing and gives you a fun, fresh perspective to get started. In our next episode, we’ll take this closet concept further and dive into how to maintain and adapt your portfolio over time for long-term success.

Until then, happy investing and remember, your future self will thank you for starting today.


Thanks to our sponsor:



Thanks for tuning in and come back each week for a brand new episode! If you liked the episode, don’t forget to hit subscribe, rate & review!


Connect with us on Instagram @your.money.style


Visit our website for articles, resources, and more at www.liveyourmoneystyle.com



Resources


bottom of page