Strong financial foundation
Before you begin investing, you need to secure a strong financial foundation. Be sure these basic steps have been taken:
- Create a “rainy day” reserve: Set aside enough cash to get you through an unexpected period of illness or unemployment–two months’ worth of living expenses is generally recommended. Put the cash in a relatively stable and liquid investment that can earn money but still lets you access the funds easily.
- Pay off your debts: It makes more sense to pay off high-interest-rate debt (e.g., credit card debt) than to put money into investments that involve an uncertain return.
- Get insured: Having adequate insurance is your best protection against financial loss, so review your home, auto, health, disability, life, and other policies, and increase your coverage, if needed.
- Tax-deferred retirement plan: Putting money in these accounts defers income taxes, leaving you more money to put toward your financial goals. Take full advantage of them if they are available to you
IMPORTANT DISCLOSURES
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.