So check out these common types of investing accounts for long-term savings (like building retirement) and short-term savings (like saving for a down payment) and see which one might work for you: You’ll also have different types of investments (like stocks, bonds or mutual funds) to choose from for those accounts. īefore you dive into investing, it’s important to take a step back and look at all your options.ĭifferent types of investing accounts (like IRAs or 529 plans) are made for different investing goals. Getting clear on why you want to invest your hard-earned money will help you with the next step, which is to. Why do you want to start investing? Is it to build your retirement? To pay for your kids’ or grandkids’ college? To save a down payment for your first house? That’s also true for investing-a key to starting your investing journey on the right foot is being clear about your goals. Market chaos, inflation, your future-work with a pro to navigate this stuff. They were able to pay off all their debt and reach a million-dollar net worth in about 20 years. In fact, there’s a whole group of millionaires called Baby Steps Millionaires who’ve followed the 7 Baby Steps to hit the million-dollar mark. Why? Because you crushed your debt and freed up your income! And now you’re on the road to building real wealth. But when you reach Baby Steps 4, 5 and 6, you can invest in retirement, save for college, and pay off your mortgage all at the same time. Tackle Baby Steps 1–3 in order-put all your focus and energy on one financial goal at a time. With your income freed up from debt payments, you’ll be able to throw that 15% at your retirement without blinking an eye. When you reach Baby Step 4, start putting 15% of your household income into tax-advantaged retirement accounts, like your 401(k) at work or Roth IRAs. It’s like trying to fill a bucket with water when there’s a hole on the bottom-it just doesn’t work.īy building a debt-free foundation and stashing a good chunk of savings in the bank, you’re setting yourself up to build wealth the right way. And as long as it’s tied up in monthly debt payments, you can’t build wealth. Here’s the deal-your income is your most important wealth-building tool.
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