[Kahly]

(NOT a retirement account per se, I am building a pension and 457b). But I’d really like to have passive income! I know I’d like to be more hands off, so from my minimal understanding I should lean towards dividend index funds and ETFs. That’s about where my knowledge ends.

Should I go through a person? A website?

I do NOT have enough knowledge to pick individual stocks, but I’d prefer not to pay someone either if that’s an option. I don’t know what to do.

Thank you for any advice.

[Joel]

Focus on total return. Dividends are a side show. Capital gains spend just as well as dividends but are more tax efficient.

Also max out your tax advantaged account options. They avoid taxes on your earnings, unlike a taxable brokerage. This might be a small advantage in any given year, but it is an advantage that compounds over time and can make a huge difference in how much you accumulate.

[Sarah]

Well respected brokerages are Vanguard, Fidelity, or Schwab. You will want to pay attention to tax efficiency in a taxable brokerage, so I would use ETFs.

Dividends will create taxable events, so you may prefer just a total stock market fund. Make sure you can choose the option to select the individual shares when selling, not first in first out, so you can control taxable events better. Hold shares for more than a year so that you are paying long term capital gains rates.

You can also read up on tax loss harvesting and wash sale rules.

[Mark]

Even though u have a pension and 457b why open a brokerage account instead of an IRA.

[Author]

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