Emergency Fund
How much do you have set aside as an emergecy fund?
An Emergency Fund is a pool of money set aside to help you cover unexpected or urgent expenses that might come up in your life. It acts like a safety net to provide financial security when unexpected events occur, such as medical emergencies, car repairs, job loss, or other unforeseen situations.
Initial Amount:
$
Use $ to pay off your Credit Card Debt
Do this today! Credit card debit is some of the worst debt you can have because of their extremely high APR. Now that you have the money, pay it off!
Use $ to pay off any other High Interst Debt of 10% APR or higher
Get yourself out of the hole of debt. By putting money towards your high interest debt, compounding interest will stop being your enemy and become your best friend.
Use $ to put towards your Emergency Fund
Place money in a high-yield savings account. Keep it untouched unless truly necessary. The emergency fund is a safety net for unexpected events like medical issues, job loss, or car repairs. It avoids relying on loans and provides stability during tough times.
Use $ to put into a Roth IRA
Contributing to a Roth IRA is important because it allows you to save money for retirement in a tax-efficient way. The contributions you make are with after-tax dollars, so when you take it out later, it's usually tax-free. This saves taxes and gives more retirement money.
Remaining balance for other Investments:
$
I follow the 40-40-20 investment strategy. This means I recommend investing 40% in low risk investments, 40% in medium risk investments, and use the last 20% for high risk investments.
Low Risk Investments: $
You should shoot for a 5%-8% return on investment. The goal of this investment is to cover for inflation.
High-Yield Savings Account
Bonds
Treasury bills
Medium Risk Investments: $
The goal of the medium risk investments is a 10%-30% return on investment.
Index Funds
Stock Market
Mutual Funds
High Risk Investments: $
The last 20% of your investment money CAN go towards riskier investments (you don't have to if you want to be more risk adverse). These are the investments that can lead to 2-10X of return. Go for the Grand Slam. However, never invest money here that you cannot live with out. Also, never go in on only one high risk investment.
Real Estate
Venture Capital
Cryptocurrency
REMEMBER! I am not a financial advisor by any means. This is just my take on smart finance. Please don't sue me if you lose money in investments. Much appreciated.