Part 4/7:
The advice emphasized a disciplined approach: instead of relying solely on dividend stocks, James should consider diversifying his 15% investment into mutual funds encompassing various categories—growth, growth and income, aggressive growth, and international funds. This diversification approach aligns with the traditional Baby Step 4 strategy, focusing on broad market exposure and steady growth.
For younger investors, especially those early in their careers, index funds are also recommended as a "bridge" strategy in taxable brokerage accounts. These funds are straightforward, low-cost, and tax-efficient, providing a foundation for retirement savings that can be accessed when needed but are intended primarily for long-term growth.