Whether you’re a die hard FI/RE or looking to start your wealth building journey. Learn exactly what it means to have multiple streams of income, setting your financial future up for success and preparing a solid financial plan.
Retirement
Saving for retirement starts early and for good reason. The more time you allow compound interest to work on the money you invest, means the larger your return will be.
This means when you get your first job, you best course of action is to open a retirement account. There are two main types of accounts, a 401k – typically through your employer – or an IRA – done on your own.
If you’re using your employer’s sponsored retirement plan, be sure to know exactly what benefits they’re adding on top of that. Some employers will match your retirement savings to a certain point – so make sure your capitalize on their additional money.
An IRA, or Individual Retirement Account, is usually done on your own in one of two formats. A Traditional IRA, similarly to a 401k where the money invested is not taxed or a Roth IRA, where the money is taxed at your rate today instead of in the future.
Roth IRAs are good if you believe you’ll be taxed in the future at a higher rate than you are today.
Regardless of what type of account you’re putting funds into, start your retirement savings early and aim to meet the cap each year to set up your nest egg.
Insurance
No one likes to think about the “what ifs” but paying for the peace of mind that you’ll be covered is important. That’s why insurance for your home, auto and life are incredibly important.
How are you going to pay should something happen to your home – a fire, flood or other disaster? Having insurance that you can rely on to cover your costs in those events is a weight off of your shoulders.
Is your family covered in the event that something happens to you? Don’t forget to provide those benefits to your loved ones – you never know what could happen, but being safe and having your family’s best interests at heart is the next best thing you can do.
Life insurance is another item to get early, as you continue to age premiums will continue to increase.
Getting the best rates for whatever insurance you need is crucial, always do your research and get right coverage for you.
Passive Income
Creating wealth doesn’t happen overnight, but you can make money passively. Through investing, saving and earning building multiple streams of passive income can set you and your family up for a successful financial future.
Travel the world, provide college for your kids or own a vacation home. Building your wealth is the fruits of your frugal financial labor.
