What to Invest In

What should I invest in?

Since this question is so deeply involved with one’s personal financial situation I have come up with some steps that might be helpful in finding your ideal path for investment.

1. Invest in your budget first! Take some time and make a budget, don’t spend more than you make and have a place for every penny. Then when it comes time follow through with your budget. It’s hard, but worth it.

2. Invest in emergencies. They always happen but can be softened if you have some extra cash that is set apart for that. 1,000 to 2,000 would be ideal. This is your emergency fund.

3. Pay off you debt. After you have your reserve account and your budget organized follow through with paying off one dept at a time. Some say it’s best to start with your shortest length of dept, but I say start with your highest interest rate like credit cards. Credit Cards can be good SOMETIMES but when operated by people who spend more than they earn, it is a bad thing. You can find yourself covered in debt in no time.

*Note to Remember: When one dept is paid off, pile that money into some other debt until you are free from bondage.

4. Take your budget and calculate how much money you need to live on for 6 months. This amount is called your 6 month freedom fund. *It is different from your emergency fund. This fund allows freedom in the workplace and freedom from creditors because you have six months of options. It feels good when your employer doesn't pay your mortgage.

5. After you debt is paid but the mortgage and your reserve and freedom accounts are filled; now it’s time to really invest in the markets. Follow the safe investment strategy and build your nest egg for early retirement. But remember to follow the rules of investing.