EquiFi

Your first job hands you a 401(k) enrollment form, and someone online tells you to open a Roth IRA instead. Which one do you pick? Take the 401(k) match first, then open a Roth IRA — the order matters more than the account. Retirement accounts all do the same basic job: they shelter your investments from taxes while the money grows. What differs is when you pay the tax, how much you can put in, and who offers the account. This guide explains each type in plain language, with the 2026 limits verified from the IRS, and ends with the funding order most beginners use. The One Idea Behind Every Retirement Account Every retirement account is the same deal in different wrapping: a tax break now or later, in exchange for leaving the money alone until retirement. There are two families. Tax-deferred accounts — a traditional 401(k) and a traditional IRA — give you the tax break today: contributions come out of your pay before income tax, the money grows without yearly tax bills, and you pa...

How much will an index fund actually earn? About 10% a year before inflation, about 7% after it — and almost never 10% in any single year. That one sentence is the honest answer to the question behind this article. The rest of it is about why the average misleads, what the number looks like in dollars, and what return is sensible to plan with. The headline number: 10% a year, with dividends From 1928 through 2025, the S&P 500 compounded at 10.02% a year with dividends reinvested — 6.78% after inflation. Those are the figures from Professor Aswath Damodaran's historical dataset at NYU's Stern School of Business, the standard free source for long-run U.S. market returns. They are total returns: price gains plus every dividend, reinvested. Dividends do most of the quiet work. Hartford Funds calculates that reinvested dividends supplied about 85% of the S&P 500's cumulative total return since 1960. Any return figure that leaves dividends out — like the price-only ...

You want to buy an S&P 500 index fund, and your broker shows two options holding the same 500 companies — one labeled an index fund, the other an ETF. Which one should you pick? The short answer: in most cases it barely matters, because the two options are often the same portfolio in two different wrappers. What matters is the account you hold it in, whether you invest automatically, and whether the account is taxable. First, the category confusion to clear up An index fund is a strategy. An ETF is a wrapper. Comparing them directly is like comparing "vegetarian" with "takeout box." An index fund tracks a market index instead of trying to beat it. An ETF is a fund that trades on a stock exchange like a single stock. Most ETFs are index funds — but not all index funds are ETFs. Some are mutual funds. So when people ask "index funds vs ETFs," they usually mean index ETFs against index mutual funds. Both track the same indexes for nearly identic...

You have $1,000 ready to invest in a broad stock fund, and your broker shows two options holding nearly the same stocks — one is an ETF, the other a mutual fund. Which one should you pick? The short answer: an ETF and a mutual fund are two wrappers for the same idea — a basket of investments owned by many people. What differs is how you buy and sell, when the price is set, and what you pay in fees and taxes. For a beginner, the fund inside the wrapper matters more than the wrapper itself — but in a taxable account, the ETF's structure usually keeps more of your money. What an ETF actually is An ETF is a basket of securities that trades on a stock exchange, just like a single stock. ETF stands for exchange-traded fund. Each share you buy represents a slice of everything the fund holds — hundreds of stocks, bonds, or other assets. You buy and sell shares through your broker during market hours, at whatever price the market sets at that moment. The price moves all day. Behind the...

The short answer: A stock is a unit of ownership in a corporation. Buying one share buys you a claim on a slice of the company's profits — and, if the company ever winds down, a slice of whatever is left after everyone else gets paid. That claim comes with three concrete rights: a vote on major company decisions, a share of any dividends the board declares, and the right to sell your claim to another investor. It does not buy you a desk at headquarters, a cut of daily revenue, or any say in how the business is run day to day. The company is a separate legal entity — and that separation, plus the order in which owners get paid, is what most beginner guides gloss over. See What Compounding Does to Your Returns One share, three rights Take a concrete example. A company has 1,000,000 shares outstanding and its stock trades at $50. You buy 100 shares for $5,000. You now own 0.01% of the company (100 ÷ 1,000,000). Here is exactly what that 0.01% entitles you to. 1. A vote. Comm...

The short answer: open the fund's prospectus, find the table titled "Fees and Expenses of the Fund" near the front, and look for the line called Total Annual Fund Operating Expenses — that is the expense ratio, the percentage of your money the fund keeps every year. Then read the "Example" box right below it, which translates that percentage into dollars on a hypothetical $10,000 investment. A 1% fee sounds like pocket change. But the SEC's own illustration shows $100,000 growing at 4% a year for 20 years reaching about $208,000 in a fund charging 0.25% — and only about $179,000 in a fund charging 1.00%. That 0.75-point gap costs roughly $29,000. The fee table exists so you can spot that gap before you buy. This guide translates every line of it into plain language. See What Fees Do to Your Growth → Where the fee table lives — and the two other places fees hide Every mutual fund and ETF prospectus must carry a standardized table of fees and expenses — th...

  The short answer: no — do not change your investments because of an election. If you just started investing and the vote has you nervous, here is the one thing to know: no U.S. election outcome has ever been a good reason for a beginner to overhaul a long-term portfolio. Markets have risen under both parties and fallen under both parties, and the investors who did best were the ones who kept contributing through all of it. That is not a slogan. It is what the data shows — and the rest of this guide walks through the evidence, plus the three things you should actually do this week instead of selling. Try the Compound Growth Calculator → What History Shows About Elections and Markets Election weeks feel uniquely dangerous to your money, but the historical record is calmer than the headlines. Going back to 1950, the S&P 500 has finished the 12 months following every midterm election higher, with an average gain of about 15%, according to J.P. Morgan Asset Management data. Past ...