Investing Early: Charly Stoever’s Strategy

Even though it’s just February, Charly Stoever has already made a big dent in their investment plans for the year.

As the founder of Traveler Charlie Money Coaching, Stoever kicks off each year by maxing out contributions to their Roth Individual Retirement Account. This means they’ve already hit the 2026 contribution limit of $7,500 as soon as January rolled around.

“A lot of folks believe it’s better to space out retirement investments, a method called dollar-cost averaging,” Stoever notes. This method involves investing a set amount at regular intervals. “For me, though, it makes more sense to invest the maximum upfront in January to reap the full benefits for the year,” they explain.

Stoever’s earnings have never surpassed about $60,000 annually, and after accounting for taxes and expenses, their take-home pay is even less. This situation puts their Roth investments at around 25% of their yearly income.

“If I don’t make these contributions, I doubt I’ll be able to retire, so I’m okay with investing heavily at the start,” Stoever adds.

Advantages of Early Investment

A Roth IRA, as a reminder, is a retirement account where you contribute money that’s already been taxed. The growth within this account is tax-free, and once you hit age 59 and a half, you can withdraw your funds along with any earnings tax-free, provided you’ve maintained the account for at least five years. For 2026, single filers can reach the maximum contribution level if their taxable income is under $153,000, with benefits gradually decreasing for those earning above $168,000.

Many savers and financial experts favor the dollar-cost averaging approach for long-term funding. A practical reason for this is that not everyone has a lump sum to invest at once. Plus, many already engage in this method unknowingly through regular 401(k) deductions from their paychecks.

From a psychological standpoint, Juan G. Hernandez Aliano, a certified financial planner in Houston, Texas, mentions that this systematic investment strategy can reduce emotional reactions to market fluctuations. “It doesn’t matter if the market is up, down, or stable; just keep investing,” he says.

According to him, “[Dollar-cost averaging] isn’t about squeezing out the most gains; it’s about ensuring that one stays invested over time.”

Stoever has had no issues sticking to their upfront investment strategy. Hernandez-Aliano points out that, mathematically, this lump-sum approach often yields better returns. “If you’re comfortable making a one-time contribution, that’s usually a smarter option,” he suggests.

Imagine two investors: one puts in $7,500 at the year’s start, while the other does so in biweekly chunks of $288. If the market rises within a year, the lump-sum investor typically benefits more.

In contrast, those who invest gradually may find themselves better protected during downturns, safeguarding their cash holdings from dips. Given that the U.S. stock market has a historical tendency to rise, lump-sum investing often leads to superior returns in the long run. Analysis of over 1,000 overlapping seven-year periods revealed that a lump-sum investment strategy produced better returns over 56% of the time compared to dollar-cost averaging.

Ultimately, Hernandez-Aliano believes that the method of saving isn’t the most critical part; rather, it’s about establishing a consistent saving habit for long-term goals like retirement. Seeking advice from a financial professional to find the most suitable strategy can be beneficial.

Stoever recalls a conversation with a financial mentor at the age of 26, who emphasized the importance of maxing out their Roth IRA. “At the time, the contribution limit was about $5,500 a year, which felt like a lot compared to my overall income,” they remember. “But I saw it as essential; otherwise, I risked having to work indefinitely, and that’s not a life I want.”