This is how I would get started, knowing everything I know now.
Stage 1 - Prepare
1) Pay off all debt you have where the interest rate is over 5-6%. If we assume your going to invest and get a 8% return annually after inflation you be getting 6% return, so you should start investing in paying down debt because it's the highest guaranteed return you get. For more, check out this article on debt.
2) Build a small emergency fund. Nothing to big, just think of all the real emergencies you had in life so far: car break downs, bailing mom out of jail and tickets to see the Detroit Lions play the 49ers. All these things are usually between $400-$900 so start there. For more, check out this article on planning for emergencies.
3) Study, research, look for investments. Try to find something that interests you, but be open to the idea that you might need to learn stuff you think isn't fun. I'm, not say you need to know how to calculate a company's EBITDA, but you should understand concepts like debt, inflation, etc... Pick more than two different investments types to research, this is important we don't want to just do one thing (eggs & baskets). For More, check out this article.
Stage 2 - Invest
1) Select multiple investments. If I was starting now I would pick Groundfloor and M1 Finance and I would put 50% in each
2) Build an opportunity fund. The opportunity is yours, maybe you want to buy a house, if you don't have an opportunity your planning for but it's best to act as if you do, so just pretend your saving for a house and you can fill in the blank later.
Stage 3 - Rotate
1) When an economic crisis or down turn arrives be ready. All that money you save for a new house in your opportunity fund, sorry your going to need that now. You thought you like some stock before, well the economy is crap so you can buy that stock at big discount.
Stage 4 - Retire
1) Your going to retire early. If you do all this you might be able to retire in your 20's lots of people in FIRE have already, only you can answer the big questions like is having Starbucks worth adding 5 years to your retirement date? can I mountain bike to work 15 miles in the snow?
2) Now that you're retired find a job you love and keep working. Wait I thought I was retired, ya but don't you want to buy an island? Also what if taxes go up or we have bad inflation, etc.. You don't have to make a lot of money the focus here is to have fun and work on something you love, the money will be a bonus.
Stage 1 - Prepare
1) Pay off all debt you have where the interest rate is over 5-6%. If we assume your going to invest and get a 8% return annually after inflation you be getting 6% return, so you should start investing in paying down debt because it's the highest guaranteed return you get. For more, check out this article on debt.
2) Build a small emergency fund. Nothing to big, just think of all the real emergencies you had in life so far: car break downs, bailing mom out of jail and tickets to see the Detroit Lions play the 49ers. All these things are usually between $400-$900 so start there. For more, check out this article on planning for emergencies.
3) Study, research, look for investments. Try to find something that interests you, but be open to the idea that you might need to learn stuff you think isn't fun. I'm, not say you need to know how to calculate a company's EBITDA, but you should understand concepts like debt, inflation, etc... Pick more than two different investments types to research, this is important we don't want to just do one thing (eggs & baskets). For More, check out this article.
Stage 2 - Invest
1) Select multiple investments. If I was starting now I would pick Groundfloor and M1 Finance and I would put 50% in each
2) Build an opportunity fund. The opportunity is yours, maybe you want to buy a house, if you don't have an opportunity your planning for but it's best to act as if you do, so just pretend your saving for a house and you can fill in the blank later.
Stage 3 - Rotate
1) When an economic crisis or down turn arrives be ready. All that money you save for a new house in your opportunity fund, sorry your going to need that now. You thought you like some stock before, well the economy is crap so you can buy that stock at big discount.
Stage 4 - Retire
1) Your going to retire early. If you do all this you might be able to retire in your 20's lots of people in FIRE have already, only you can answer the big questions like is having Starbucks worth adding 5 years to your retirement date? can I mountain bike to work 15 miles in the snow?
2) Now that you're retired find a job you love and keep working. Wait I thought I was retired, ya but don't you want to buy an island? Also what if taxes go up or we have bad inflation, etc.. You don't have to make a lot of money the focus here is to have fun and work on something you love, the money will be a bonus.
No comments:
Post a Comment