Optimal Order to Invest for High Income Earners

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There are a dozen or more different places you can direct your cashflow to after you've paid taxes and your living expenses:
Checking
Savings
401k
403b
IRAs
HSAs
Credit card debt
Extra Mortgage payments
.. the list goes on.
In this video Jake explained what he considers the Financial Order of Operations - the smartest order to follow to build wealth long term.
This order may look different for some, depending on your priorities. Do not take this is personalized advice, just a guideline.
0:42 401k Match
1:18 Emergency Fund
3:15 Consumer Debt
3:53 ESPP
4:50 HSA
6:31 Max out 401(k)
6:54 Roth IRA
9:10 Taxable Brokerage Account
10:07 Short-term goals
10:35 Low interest debt
11:52 PDF link in description
Visit us at www.sparkwealthadvisors.com to learn more about how we help people like you gain confidence and clarity with your money.
*This content is educational and not tax, legal, or investment advice*

[@alrocky]

7) Roth IRA should precede 6) Max out 401(k) as one's retirement plan may be fraught with high fees and horrible investment choices. Maxing out ($7,000) Roth IRA has several advantages over ($23k) 401(k) and with flexibility to replace or double as 2) Emergency Fund.

[@SparkWealthAdvisors]

I see your points. I suppose it depends on the situation (and their 401k fund menu as you stated). From a tax perspective, maxing out a Traditional 401(k) would allow tax deductions that a Roth IRA doesn't.

[@alrocky]

@@SparkWealthAdvisors From tax perspective Roth IRA may be preferred before maxing traditional 401(k) especially if employee is in relatively low tax bracket. Actually contributing to traditional 401(k) results in tax *_reduction_* not tax deduction.