So you want to save money and invest? Here are a few things you need to do before being able to invest!
1. Build An Emergency Fund
First things first, emergencies will happen, so you should be prepared so they don’t derail your financial plan. Building a solid emergency fund of at least 4-6 months is essential for your futures success in investing.
2. Know Your Cash Flow
A budget is a cash flow plan and will let you know how much you can afford to invest each month. If you don’t know your cash flow you are just as good as done… It’s imperative that you figure out what your cash flow is. Even if you have to cut back a bit on Starbucks or going out every weekend, your future self will thank you fore it!
3. Pay Down Debt
Minimize or eliminate debt especially credit card debt. Paying less in interest is like an investment gain. Some of these major credit card companies are charging a ridiculous amount of money to lend you money on your credit cards. Some charge upwards of 28% interest. That is an insane amount of interest . Make sure you take care of that first!
4. Track Your Net Worth
Net worth should be your number one metric when working to build wealth. It’s the number that really matters.
5. Understand The Basics
Make sure you know what is meant when you talk about : Stocks, Bonds, Funds, ETFs, Diversification, Volatility, Risk, and other basic terms.
6. Define Goals & Priorities
Understand why you are investing. It will help keep you motivated and on the right track to building wealth and a nice financial future for you and your family!