SEVEN RULES OF PERSONAL FINANCE

Over 35 years of investing and managing, one cannot help but find trends and rules that work every time.  These seven little rules are the foundation of conservative, safe, personal financial management.

1. Have 6 months expenses in the bank and available.
2. Maximize retirement contributions (ROTH IRA, TRADITIONAL IRA, SIMPLE IRA, 401K etc.)  Roth versus traditional is better if you have to make a choice;  otherwise do both.
3. Pay no interest or fees on credit cards.
4. Pay off your house as fast as you can.
5. Pay off any other debt such as a car loan as fast as you can.
6. Invest in things that are cash flow positive; you receive income.
7. If investments are leveraged (you borrowed to make the investment) pay that off as fast as you can.

Adhering to these guidelines reduces risk.  When you quit working, your mandatory expenses are at a minimum and you are less prone to suffer during the ups and downs of the economic cycle.


The next step after embracing these seven steps is to save and invest.  If you reinvest the income you make from investing while you are young, you can turn on multiple spigots of income when you are old.


It works,


Very Truly Yours,


TheMoneyMadam