Build A Solid Foundation

Something exciting!

Last week we piloted a new course, Mastering the Basics of Investing, with thirty bright and willing students. We had three hours to kill, and we filled Every. Single. Minute.

One of the things we talked about was understanding your financial foundation - what do you need to be doing BEFORE you start investing?

1. Build Emergency Savings – save 3-6 months of necessary expenses in a liquid account (like a HYSA).

Necessary expenses = rent or mortgage, food, basic transportation etc. We're not talking about Ubers on a Saturday night or Starbucks in the morning.

2. Manage High Interest Rate Debt – depending on what you're investing in, you'll probably want to pay down debt with interest rates over ~6-10%.

Pro tip: When you have debt outstanding at 19%, it's like locking in a guaranteed negative 19% return on your money.

3. Understand Your Goals – Why are you investing? How soon will you need this money?

This will help determine what you should invest in.

4. Invest!