Monday, April 23, 2007

Levels of Personal Finance Advice

From all that I read on personal finance, I think there are few basic principles we all need to follow. In fact, there are "levels of detail" per se, when it comes down to it. At a High Level its basically:
1) Save as much as you can
2) Earn as much as you can.

In a Middle Level its:
1) Contribute as much as you can to your 401k , but at minimum get the employer match
2) Save 4000$ a year in a Roth IRA
3) Save up 3 months worth of expenses in an emergency fund

And at a more detailed oriented Low Level its:
1) Invest you retirement savings (401k and Roth IRA) approximately 90% into stocks and stock mutual funds spread across Small Cap, Large Cap, and International funds.
2) Put your emergency fund into a high interest rate, no minimums or fees, online savings account: HSBC, Emigrant-Direct,

All in all very good advice and something we all should be doing. I think going forward with this blog (when I have Finance posts) I will touch on different parts of these levels and expound on them. Also, I will talk about other interesting areas of investment (, creating cash flow,etc..) that are not usually covered by the personal finance gurus. Stay tuned.

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