Thu May 22 2025, by Tyler Gardner

My Paycheck Plan for Achieving Long-Term Wealth

I'm Tyler. I'm a former financial advisor and portfolio manager, and now I spend most of my time working on a new podcast. If any of this is helpful, tune in by clicking the link in my bio.

1. Pay Down Toxic Debt

100% of my disposable income—meaning the money I do not spend on immediate needs like food and shelter—goes to paying down toxic debt, a.k.a. credit card debt, the killer of all your wealth dreams. Anyone who says otherwise is a ding-dong.

2. Fund a High-Yield Savings Account

If that's taken care of, I'd put 5% of each paycheck into a high-yield savings account to pay for my short and mid-term needs. Why? Because I could be earning 4-5% on that money versus 0.1% in a traditional savings account or a checking account.

3. Max Out My 401k

If that's sorted out, I’d put as much money as I could towards my 401k while getting whatever company match my employer is willing to give. Why? Because it's a free raise for doing absolutely nothing but being super smart with your money.

4. Contribute to a Roth IRA

Once that's taken care of, I’d put 10% of each paycheck into a Roth IRA and invest it in low-cost index funds. Call it a day! That allows for growth and tax-free spending after age 59 and a half. If you need the money, you can take back contributions any time, penalty and tax-free.

5. Utilize a Health Savings Account

Finally, if all that’s covered, put 10% into a health savings account (HSA) and invest it in low-cost index funds. Yep, you can do that! This ensures you never have to worry about paying a dime on health expenses ever again.

Conclusion

Money doesn't have to be complicated, but it does need a system. And this, bluntly, is a pretty good one.

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