- Have 6 months expenses in the bank and available.
- 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.
- Pay no interest or fees on credit cards.
- Pay off your house as fast as you can.
- Pay off any other debt such as a car loan as fast as you can.
- Invest in things that are cash flow positive; you receive income.
- If investments are leveraged (you borrowed to make the investment) pay that off as fast as you can.
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