E8: Investing Accounts… But Make It Simple
E8: Investing Accounts… But Make It Simple (Yes, You Can Actually Understand Your Money)
Hey dolls, welcome back to Build Wealth, your favorite corner of the internet where we get serious about money without ever taking ourselves too seriously. Lately, we’ve been deep in heart-and-soul territory, talking about mindset and feelings (because yes, money is emotional too). But today? Today we’re putting our emotions to bed for a hot sec and getting into the heady stuff: investing accounts.
I see you. You’ve logged into your 401(k) one day, peeked at your Roth IRA the next, maybe have a brokerage account someone “helped” you set up, and suddenly—bam!— your brain goes :“Nah. I’ll figure this out in another lifetime.”
Girl, I’ve been there. I still remember the first time I tried logging into my 401(k). Fidelity has like five different websites, none of which lead to the account I actually had. Cue panic, confusion, and eventually… a tub of ice cream.
Here’s the thing: you don’t need to become a financial advisor to make your money work for you. You just need to know what accounts you have, why they exist, and how to make your money align with your goals—all while living your best life: hiking, traveling, bossing up, or sipping a 10 a.m. glass of wine (no judgment).
So, grab your coffee, your favorite notebook, and let’s make investing basics less intimidating and a lot more empowering.
Why Are There So Many Investing Accounts?
First things first: why do we even have so many options?
Basically, different accounts are designed for different goals and situations. Whether you’re employed, self-employed, or taking a career pause as a caregiver, there’s a tool to help you save or invest. And yes, believe it or not, the government actually wants you to do well with your money.
Think about retirement. Back in the 80s, most people had pensions—so your parents didn’t need to worry much about investing themselves. But when that responsibility shifted to individuals, new types of accounts like the 401(k) and Roth IRA popped up to help you save smartly, with tax incentives designed to accelerate your growth.
Fun fact: 401(k)s started in the 1980s, and Roth IRAs didn’t exist until 1999. So when you wonder why your parents never taught you this stuff—cut them some slack. Most of them were left to figure it out on their own too.
So yes—lots of accounts, lots of rules, but also lots of opportunity to make your money work harder.
The Two Things You Need to Consider: Growth vs. Liquidity
When picking an account, think about two things:
How big your money can grow (optimization)
When you can access it (liquidity)
“Liquidity” is a fancy word for how accessible your money is.
Retirement accounts? Limited liquidity. Use your 401(k) before 59½, and you’ll pay penalties.
Brokerage accounts? Super liquid. You can access your money whenever you want, no questions asked.
The trade-off is simple: accounts with tax advantages grow faster but are less flexible, and accounts without tax perks are more flexible but grow slower.
The Three Buckets of Investing Accounts
Let’s break it down in a way that won’t make our brains explode:
Pre-tax accounts– You invest before taxes, let it grow, and pay taxes when you withdraw. Example: 401(k), SEP IRA, Solo 401(k).
Post-tax accounts– You pay taxes upfront, then never pay taxes again on the growth. Example: Roth IRA, Spousal Roth IRA.
No-tax-advantage accounts– You pay taxes now AND on any gains later. Example: Brokerage accounts.
Let’s look at a simplified example with $1,000 invested in each bucket:
See the difference? Tax-advantaged accounts give your money more runway to grow, while brokerage accounts offer freedom and flexibility.
Which Accounts Are Right for You?
It depends on your situation. Let’s break down the common options:
If You’re Employed (Full-Time Job)
Pre-tax: 401(k)
Post-tax: Roth IRA
No-tax advantage: Brokerage
Pro tip: Always contribute at least up to your employer match in a 401(k). That’s free money, honey!
If You’re Self-Employed
Pre-tax: SEP IRA (simple, flexible) or Solo 401(k) (higher limits, more paperwork)
Post-tax: Roth IRA
No-tax advantage: Brokerage
If You’re Unemployed / On a Career Pause / Caregiver
Pre-tax: Usually none
Post-tax: Spousal Roth IRA (if married)
No-tax advantage: Brokerage
Account Details You Need to Know
401(k)
Contribution limit 2025: $23,000
Taxes: Pre-tax
Liquidity: Penalty if accessed before 59½ (exceptions exist)
Why choose: Easiest way to start retirement investing, especially if you get a match
Roth IRA
Contribution limit 2025: $7,000
Income limit 2025: $146,000 single / $230,000 married
Taxes: Post-tax
Liquidity: Contributions accessible anytime; gains locked until 59½
Why choose: Tax-free growth, no employer needed
SEP IRA (Self-Employed)
Contribution limit 2025: 25% of net self-employment income, capped at $69,000
Taxes: Pre-tax
Liquidity: Locked until 59½
Why choose: High-limit retirement option with simple setup
Solo 401(k)
Contribution limit 2025: Up to $69,000 combining employee + employer contributions
Taxes: Choose pre-tax or Roth
Liquidity: Locked until 59½
Why choose: Maximize contributions, tax optimization, for high-earning solopreneurs
Spousal Roth IRA
Contribution limit 2025: $7,000
Taxes: Post-tax
Liquidity: Contributions accessible anytime; gains locked until 59½
Why choose: Keep retirement savings moving during career pauses
Story Time: My Roth IRA Mishap
Okay, real talk. When I first started investing, I jumped on the Roth IRA bandwagon, contributing every year. But because my income was variable as a freelancer, I didn’t realize my income that year was going to exceed the income limit for the first time, and technically, I shouldn’t have contributed that year. Cue panic mode: I felt like a felon about to be dragged to the IRS dungeon!!
Thankfully, a financial check-in caught it, and we corrected it by paying a small penalty. Lesson learned: an extra set of eyes on your money is always a good idea! Mistakes happen, and it’s better to make them early while you’re learning than freeze in fear and let opportunities pass. Very few things in life are truly irreversible!
How to Think About Your Money: Goal-Focused Investing
The best way to decide which account to use? Think in terms of goals:
Retirement: Pre-tax or post-tax accounts make sense—maximize growth, plan for the long haul
Medium-term goals (house, travel, big purchases): Brokerage accounts for liquidity
Personally, I like to dip into a little bit of everything. Pre-tax, post-tax, and brokerage. This way, I get optimization + liquidity—money grows and I can access it when I need it.
Common Mistakes I See (And How to Fix Them)
Money sitting in an account but not invested
Your 401(k) is the account, not the investment! Just having money in the account doesn’t mean it’s working for you. You have to choose the investments.
Check if your money is in a “money market funds” or “settlement funds”—that’s actually cash that isn't currently invested.
Next step is buying actual investments.
Confusing a 401(k) with a target date fund
401(k) = the account (the store)
Target date fund = the investment (the clothes you’re buying)
Action step: Log in, see where your money is, and make sure it’s actually invested.
Your Step-by-Step Action Plan
Find your accounts. 401k? Roth IRA? Brokerage? Self-employed options? Identify what you have.
Check if your money is invested. Don’t let it sit idle.
Identify your tax buckets. Know what’s pre-tax, post-tax, and no-tax advantage.
Take small, imperfect action. Clarity comes from experience, and yes, that includes mistakes sometimes! No shame.
Remember, every step you take toward understanding your money is one step closer to building wealth and true financial independence.
Let’s Keep This Going
If this post helped you finally see your accounts and feel in control, do me a favor:
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Download my free PDF guide on understanding your investments: https://buildwealthwithkatie.com/investingessentials
Find me on Instagram @buildwealthwithkatie for more tips, money memes, and mindset shifts
You deserve to feel empowered around your money, not intimidated. Let’s get your accounts working as hard as you do. Because being a high-achiever is amazing—but being a high-achiever who totally understands her money? That’s unstoppable.
✅ Key Takeaways
Pre-tax vs post-tax vs no-tax advantage accounts: know the difference
Optimize growth AND liquidity based on your goals
Mistakes happen—clarity comes from action
Your 401(k) is the account, not the investment
Always check that your money is actually invested
Remember, financial freedom isn’t about perfection—it’s about ownership and clarity.
