You don’t need big bucks to get a jump on everyone else. Read More...

Investing is one of those things that most of us stick in the “stuff I’ll have enough money to do later” file. We see investing as something you do when you aren’t broke af.

The best time to start investing is now, while you’re still young enough to recover from mistakes — and while you have time on your side. Even if you’re no longer “young,” you’ll never be younger than you are today, so investing belongs on today’s to-do list, not tomorrow’s.

It seems like a hopeless situation when you’re struggling with money right now. You know you should put your money to work, but you don’t have enough money to buy a couple hundred shares of Apple stock.

If you think you don’t have enough money to start investing, the good news is that you’re probably wrong. Even when you’re broke, you can still begin investing. It doesn’t take much to get started, and it’s also easier than you think.

Use a company retirement plan.

Now that you’ve got a real job, there’s a good chance that you have the option to contribute to a retirement plan offered by your employer. Many of us don’t think of putting money in a 401(k) as investing, but it is. There’s no substitute for good benefits, and if your company offers a plan, jump on it.

Talk to HR, and have some of your money diverted to a 401(k). If your company offers a match, that’s free money that you can use to invest. You won’t miss what you never see, which is why an automatic contribution from your paycheck is one of the best strategies when you want to invest when you’re broke. You won’t even miss the money from your paycheck. Just put away a small percentage of your paycheck to start —5% — or even 1%.

Your paycheck will be a smidge smaller but you won’t even notice — until you get those quarterly statements that show you how you’ve saved without realizing it.

Make dollar-cost averaging your bae.

The idea behind dollar-cost averaging is that you take a set amount of money each month (and you can start investing with as little as $25 or even less with WealthSimple) and invest it. Buy as many shares as you can with that money. Dollar-cost averaging is especially effective when you use your money to purchase low-cost index mutual funds or ETFs.

Here’s an example: With a regular paycheck going to a regular checking account, set up a plan at WealthSimple to automatically invest just $10 every paycheck. It adds up quickly, but you’ll barely notice it.

Indexing FTW.

Index funds and ETFs take all the work out of picking stocks. You get access to a section of the market, so the diversification is taken care of and you don’t have to worry about what happens when you choose wrong. I’m boring as hell when it comes to investing because I’m still into indexing. It’s how I roll.

If you’re putting money aside in a 401(k) from your paycheck, you’re already dollar-cost averaging — and probably indexing to boot.

If your company doesn’t have a retirement plan, you can still open your own. Many companies will let you open an IRA and put in as little as $50 per month (or even less). Make it automatic and you won’t have to think about it. I also like using Betterment to help me reach my goals. If you have $100 per month to invest, this can be a great way to get started.

Over time, you’ll grow your portfolio through consistency.

DRIP it up.

I like to invest in index funds and ETFs that pay dividends and automatically invest them. Many brokers and companies offer DRIPs, or plans that take dividends paid out to you and automatically use the money to buy additional shares.

Investing in dividends makes sense because dividends are payouts companies make based on the number of shares you own.

Use DRIPs to automatically buy more shares, and your next payout is larger. You can buy more shares and then get a bigger payout. It’s a beautiful cycle. My decision to use dollar-cost averaging with DRIP funds is the reason that my portfolio kept growing, even during the Great Recession.

You can find out more by watching this Facebook live on how to invest using dividends.

TBH, DRIPs seem pointless at first, especially if you invest when you’re broke. Who cares if you got a 20-cent payout? With automatic reinvesting, though, the cycle continues and eventually, as you stick with the dollar-cost averaging to buy more shares, and as your payouts get bigger, everything builds on itself.

It’s all about building a foundation and being consistent. As you put into practice these strategies TOGETHER, you are likely to see results over time.

Use your pocket change.

If you are absolutely certain that you can’t spare $50 a month for investing, consider using Acorns.

This app connects to your bank account and automatically rounds up your recent purchases and puts the difference in an investment account. The fees aren’t my favorite, but if you aren’t investing at all, and this will get you started, it’s better than nothing.

And once you get the hang of setting money aside, the next step is to open a Roth IRA at a brokerage — one that will result in fewer overall fees.

Commit to your money.

Once you start investing, look for ways to invest more. Don’t forget to increase the amount you invest as you earn more and climb the career ladder.

The spare change you invest now won’t completely fund your future. But it will give you a good start and help you start a habit that can benefit you for the rest of your life.

4 easy ways to start investing right now.

Even if you’re broke af, you can start investing today. Here are a few recommended actions you can take immediately, even if you don’t think you have spare change.

WealthSimple.

WealthSimple arrived in the United States after its success in Canada, and its strength is its cost. When you’re starting out with investing, you don’t want fees digging into your profits.

There’s no charge to transfer money from a bank account into your WealthSimple account. I started out with a $10 weekly investment, but you could start with $5 a month if you want, or if that’s all you can afford right now.

And there’s a special deal right now. If you open an account, you will receive a $50 bonus. Open an account today and get that $50.

When you sign up, you fill out a short questionnaire to determine how your money should be invested using a mix of exchange-traded funds — one of the most frugal ways to invest in stocks and bonds. You can accept their suggestions —and if you’re new to investing, that’s what we would suggest you do — or change them to suit your tastes if you have a little more experience with investing.

If your account stays under $5,000, you will not be charged any fee for the first year. Above or after that, the management fee is a small 0.5% — though, if you find yourself with more than $100,000 invested, they’ll reduce your fee to 0.4%. This is a great deal when it comes to investing, especially if you’re starting out with just a little bit of cash to invest.

LendingClub.

If you’re open to a different kind of approach to investing, take a look at LendingClub. Rather than investing in stocks and bonds, you’re investing in loans. The returns are similar to stocks, and the risk is managed. The only drawback is that your investment is a little less liquid. That means if you need the money you’ve invested in an emergency situation, it might be hard to withdraw immediately. (That’s why it’s always best to have an emergency fund.)

LendingClub helps you pick out the best investments and gives you a good idea of what you can expect to return. You can use your investment to create an income stream. There’s a higher minimum investment of $1,000, but you can save up in a savings account until you are ready to start. After that, you can increase your investment with only $25.

Open an account with LendingClub today.

Ally Invest.

Ally Invest is a discount brokerage with truly low prices. Yes, the $4.95 fee per trade will cut into your profits if you invest small amounts in stocks or ETFs. If you want to invest frequently, WealthSimple mentioned above might be a better option, though your investment selection is limited. On the other hand, Ally Invest really lets you take control of your investments. There’s less guidance, but more flexibility.

Ally Invest used to be known as TradeKing, which made its name as one of the most popular discount online brokerages.

Open an account with Ally Invest today.

Betterment.

This is one of the godfathers of robo-investing. Betterment uses ETFs to help you reach your goals through asset allocation. You’ll be asked questions about your objectives, and your time frame. I love Betterment and use it to save for retirement, as well as to save up for travel.

You don’t need a ton to get started investing with Betterment, and your account comes with free automatic rebalancing and tax loss harvesting, if applicable. I also like how easy it is to adjust your investments for new goals. Plus, with the IRA, you have the option to have Betterment figure out how to max it out each year.

Open an account with Betterment today.

Learn how to invest and get started today.

There are three great options above for getting started with your investment portfolio. One of the great things about these options is that you can take advantage of time-tested strategies used by the best investors in the world.

Get started, and then learn more about investing. While I mostly stick to indexing, after I got started just putting something away, I discovered that I could learn more about investing and experiment a little. Now, I invest in REITs, and occasionally try the odd cryptocurrency. You don’t want to stake your future on these types of investments, but as you learn, you can try new things with “extra” money.

Every adult should have an investment account, and every adult should invest for their future, regardless of how difficult it might feel to let go of even $1 of cash today.

Your future you will thank your today you. All you need to do is just take one simple step forward today — even if it’s not a huge step.

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

You’re saving all right. You’re just putting your money in the wrong place. Read More...

Saving money is like eating healthy, sleeping or exercising. All the expert advice tends to boil down to one thing – you should do more of it.

But while working hard is great, working smart is even better. You can save every spare penny you earn, but planning for your financial future isn’t just about being frugal. You need to make sure that money is allocated properly and put to specific use.

Think of it like eating a balanced diet versus living on broccoli, chicken breast, and tap water. Sure, those are very healthy options, but a good diet requires some diversification and a little forethought to prevent vitamin deficiencies. Planning for your financial future takes a similar approach.

Your savings are a powerful tool – are you putting that money to good use?

The wrong place for your emergency fund.

When I ask people where they keep their emergency fund, they often say something like, “Oh, it’s in my regular checking account.”

Wrong. Keeping your emergency fund in your everyday checking account is like keeping a box of cookies on the counter when you’re on a diet. You should store your emergency fund like you’d hide the last box of Thin Mints — out of sight, out of mind. Otherwise, you’ll be tempted to spend your money.

Other people have told me they invest all or part of their emergency fund — another bad choice. Since you can’t plan on when you’ll need your emergency fund, you shouldn’t risk it in the stock market.

(Miranda’s note: Actually, I have a bit of a disagreement here with our writer. I even keep part of my emergency fund in a taxable investment account. See how I emergency fund in this video done for Facebook Live.)

An emergency fund should always be liquid or easily accessible, like in a savings or money market account. Some consumers store theirs in a certificate of deposit (CD),  which has a maturity date. If you access your CD beforehand, you may forfeit several month’s worth of interest and pay a fee.

Carefully consider how and when you might need to access your emergency fund and come up with a plan for making sure you get the money you need.

The wrong place for your retirement fund.

A few weeks ago, my friend Martha asked me if she should move her IRA account to a different bank. She had been investing steadily for a few years but hadn’t seen any huge returns. For the past eight years, we’ve seen the second-longest bull market on record, so Martha should have seen growth in her IRA.

I asked her what she was investing in.

“Nothing,” she told me. “I didn’t realize an IRA was an investment account.”

Martha made a classic error I see from lots of new investors. They open an IRA or a 401k, fund it every month and then fail to choose investments. The money languishes in their cash settlement account, not growing at all.

Thankfully, Martha caught this mistake in her late 20s. A financial planner friend of mine told me about a client who spent decades depositing money in her IRA without making sure she was actually investing. She was in her 50s when he realized what was happening. If she had been investing, she could have retired already. Now she has to work at least another decade.

If you already have an IRA or 401k set up, access your account to see where that money is actually going. Is it set up in an index fund, a bond fund or a target-date fund? Or are you like my friend Martha?

You don’t want to be saving enough for retirement but putting it in the wrong place. The key to growing wealth over time is the right amount of money combined with consistent investment over a couple of decades.

Call the customer service department if you’re confused on how to select a fund since these websites can be painful to navigate. I had to do this when setting up my IRA with Vanguard. Not sure what kind of fund to choose? Talk to a financial planner who can take into account your age, current portfolio and risk tolerance to create an appropriate mix.

The wrong place for your short-term savings.

My friend Lauren recently told me she was saving for her down payment in an Acorns account. Acorns is an app that rounds up your transactions to the nearest dollar and invests the difference in low-fee funds. It’s a great app for people who want to maximize their investments without doing a lot of legwork.

She was probably saving enough each month to work toward her goal. However, because the money was in the stock market, a large market event could have wiped out the down payment fund and ruined her plans.

Investing the money you might need within a couple years means you’re gambling with your savings. Sure, the market might go up and you could see a boost to your car fund or vacation savings goal — but stocks could also drop, leaving you with less.

Here’s what I do: My husband and I have separate savings accounts for our car repair/replacement fund, down payment fund, and vacation fund. If we need to pay for an oil change, I can transfer the money from our car repair fund into our regular checking account.

Our savings accounts have an interest rate of 1%, so we earn a few bucks every month. It’s not the double-digit returns we’d get if we invested the money, but there’s no risk of losing the principal.

Figure out where your money should be.

Yes, you need to make sure you’re saving enough money for your goals. But it’s also important to consider where you put that money. For long-term goals like saving for retirement and paying for your child’s college, you can consider using index funds and dollar-cost averaging over time.

With shorter-term goals, more liquid accounts with a guarantee of principal can make sense. Think about when you might need to access your money, your current risk tolerance, and plan accordingly.

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Every adult needs investments. It doesn’t have to be complicated, though. Invest today so you can live your best life tomorrow. Read More...

Disclosure: Adulting.tv may be compensated if you take action after visiting certain links in this article at no cost to you. We stand by our editorial integrity and would not be linking to or discussing this topic if we didn’t believe it was in the best interest of you, our audience.

You should start investing, like, yesterday. Any hesitation means you’re losing out on potential growth. You may have debt, you may be struggling to put food on the table, but what’s going to save you is going to be investing. Even if it’s just a little.

Do you even 401(k)?

If you’re lucky enough to have a job, and you’re even luckier to have a job that offers a 401(k) plan, you should take advantage of it. They’re not perfect, and some are better than others, but often your company offers you free money to take advantage of it.

This is part of your compensation, so you should do it. If you don’t, it’s like telling your boss to keep part of your paycheck because you don’t need it. So just get started with the 401(k) and worry about what to do with it later. We can help you with that, too, so check for the links below.

WealthSimple

If you don’t have a 401(k) plan, take matters into your own hands and open an IRA. WealthSimple is my favorite option because you don’t need to save up hundreds or thousands of dollars before you start. You can start right now with even $5. Or $100. Or $20. Whatever you might be able to spare — and really try to make it work.

Because the amount doesn’t matter, especially at first. It’s just about getting in the habit.

So open an account at WealthSimple today. There are no fees while your account is less than $5,000, and as you refer friends, you’ll eliminate fees as your account grows.

As you set up your account, all you need to do is choose the investing style that fits you, and WealthSimple worries about how your money is invested. It’s a good hands-off way to invest, so you can know that your money is invested the way you want. You can take your time to learn more about index funds and choosing investments on your own, and when you’re ready, move to a different platform. But you shouldn’t hold off until you know everything about investing. The most important factor is starting early, so that’s where WealthSimple comes into play.

Get handsy with Vanguard

If you prefer a more hands-on approach, Vanguard is the next best option. You do have to save up before starting with Vanguard, though. They have account minimums, and that might make it difficult for a lot of people. So start with WealthSimple, and once your account hits $5,000 (won’t that be a nice day?), move your account to Vanguard. I like Vanguard’s “Total Stock Market Index Fund.”

Whether you invest at WealthSimple or Vanguard, you should choose a Traditional IRA if you don’t have a 401(k) or a Roth IRA if you do. That’s going to allow your money to grow without any kind of tax consequences until you retire.

The key is to just invest your money and leave it alone for 10, 20, or 30 years — or more. That’s the first type of investing you want to tackle.

So let’s say you’re a little more financially secure and you’re ready for taking some more advanced investing steps. You are contributing to your 401(k), you have an IRA, so you’re saving for retirement, but you want investments that will help you grow your net worth without having to wait for retirement. Well, now let’s look at what you should do about that, but only if you can answer yes to these questions.

  • Are you taking full advantage of your 401(k) benefits? That means investing at least as much to get the full matching contribution if your job offers it.
  • Are you maximizing your IRA? The government says most people are allowed to contribute up to $5,500 each year.
  • Do you have a sufficient emergency fund or plan? What happens if you lose your job and can’t find a new one right away? Do you have savings that will cover your living expenses?
  • Is your debt under control? You’re making progress with paying off your debt if you have any. With student loans, you’re paying at least the maximum each month, and with credit cards, you’re paying them in full every month or aggressively paying down old debt.

If you qualify, you are free to invest some of your extra money every month. It’s better than spending it, anyway. Vanguard is another good choice. But don’t fall into the trap of picking stocks or trying to predict what the “market” is going to do. You can’t beat the market, not consistently. So even for regular, non-retirement accounts, the best choice is the something like Vanguard’s Total Stock Market Index Fund, and the best place to get that is directly from Vanguard.

Don’t go to your local bank and ask about investments. They will sell you something you don’t need.

So don’t wait. Get started right now with WealthSimple or Vanguard.

Bonus alert! WealthSimple is offering $100 in bonuses to the first 100 new accounts from Adulting.tv readers and listeners! That’s $10,000 in bonuses in total just for our audience! You’ll receive $50 when you open the account and another $50 if you invest $100,000! Now, that’s a lot to invest. But we know that some in our audience might qualify. Regardless, get your $50 right away by opening an account at WealthSimple!

More Best Investing Accounts

If you’re not satisfied with WealthSimple or Vanguard, here are some more suggestions based on our experience at Adulting.tv.

  • Betterment. Betterment is another managed account like WealthSimple. It was one of the first automated managed investment accounts, and very popular with young investors who don’t want to choose their own funds, stocks, or bonds.
  • Fidelity. Like Vanguard, Fidelity is a discount brokerage that offers its own index funds as well as stock trading.
  • Ally Invest. Recently merged with TradeKing, Ally Invest is a discount brokerage that lets you choose your investments.
  • Capital One Investing. ShareBuilder is now Capital One Investing. They have low-cost trades, so this is a great option for dabbling with the occasional stock investing (but don’t go crazy making trades!).

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Your savings account is a freeloader. Put your money to work by investing now. Read More...

When I want something in another room, I send my son to get it. It’s what kids are for. The best way to get work done is to get someone else to do it for you.

That’s the principle behind investing. When you invest, your money does the heavy lifting. With $25 and a willingness to automatically transfer money into your first investment account each month, you can enjoy the benefits of letting your money work.

It’s not something that will lead to huge returns immediately, but over time you might be surprised to see how your money grows.

Get off your assets.

No one likes freeloaders. If someone is sleeping at your place, you at least want them to do the dishes. When your money sits in a savings account, it’s sleeping on the couch without helping out with anything.

You’ll never build the wealth you need for financial freedom if you don’t move your assets. Once you have built up a comfortable emergency fund, stop relying entirely on that savings account and open an investment account. It’s easy enough, even if you only have $25 to start.

Your first investment account should be with a broker that allows you to invest a small amount of money to begin with. There are accounts that allow you to start with as little as $5 a week. If you have a little more, you can start investing with a service like Betterment with $100 a month.

All you need is the same information you use to open a bank account, and your bank account information. Set up an automatic investment plan so that money is automatically moved from your bank account to your investment account. You can also use a service like Acorns to automatically invest your pocket change.

Have an open relationship with your money.

Don’t be loyal to one bank account or even to your first investment account. It’s ok to work your assets in any way that helps you build wealth.

Start with your company’s tax-advantaged retirement account. If your company offers a 401(k) and you contribute, you’re investing. Use that to your advantage, and take the biggest match possible. Many people don’t think of company retirement plans as investing, but it is. It’s the easiest way to open your first investment account, and you can reap benefits for years to come.

You don’t need to be a one-account investor, though. If you have the right information, you can open an account with an online discount broker (like TradeKing or E*Trade), robo advisor (like Betterment), or a “traditional” company like Vanguard or Fidelity. There are a number of ways for you to open different investment accounts to fulfill different purposes. If you don’t like what’s offered by your company’s plan, get the maximum match, then open an account with a different broker.

Get your money out there to make an effort. I was pleasantly surprised the other day to discover that my regular effort with my money has been paying off. I’ve been contributing to a travel fund, and my money has been busy. It’s worked for me, and with the help of compound interest, is already offering a great return.

How to open your first investment account.

When you’re ready to spread a little more canvas with your money, keep the following in mind:

Get personal.

You need identifying information to open an investment account. Your name, address, birth date, Social Security number, and bank account information will be needed. The law requires brokers to collect this information from you.

Have your personal information ready. Even if you open an account using the internet, having it nearby keeps you from being timed out of the session before you’re ready.

If you do open your investment account using the internet, make sure you are on a private connection. Do it from a password-protected network, not public Wi-Fi. This is sensitive stuff and you don’t want it out there.

Index funds are better to start.

They aren’t sexy, but index funds, which follow set groups of stocks, such as the Dow Jones Industrial Average, or the S&P 500, can be an easy way to get the most out of your investing dollar. You don’t have to pick stocks (which can get tricky), and you enjoy instant diversity.

Some discount brokers, like Acorns and Betterment, won’t let you pick your own funds. However, they usually have access to low-cost ETFs that are broad enough to provide you with the diversity and performance that keeps pace with the market in general. And that’s exactly what you need when you start out.

Do it in your sleep.

Put your assets to work while you sleep. Schedule automatic transfers from your account to the investment account. Most brokers offer an “automatic investment plan.” Sign up for it. It’s better when things happen while you’re not thinking about them.

Start small.

Even if you’re broke af, you can still afford to invest. With some discount brokers, it’s possible to automatically invest $5 a month. You eventually need to step it up and show your investment account some love, but starting small gives you the chance to let your money begin. The longer your money is at it, the greater the chance you’ll see bigger results down the road.

You still need to boost your contributions over time, though. As soon as you can, increase the amount you invest. You don’t want to sit on your assets when you have them. They should be out working hard for you.

The following, from Calculate My Wealth, shows you how you should be working your assets. Start investing $100 per month at age 22, and do it until you’re 65, and here’s what you could have:

invest

Unlike investments, that savings account is definitely a freeloader.

Make investing a priority.

There are a lot of things you could be doing with your money. Investing should be a priority. Yes, you need to pay down debt (especially if it comes with a high interest rate). And you have bills. You’d probably like to enjoy an evening out on occasion. But if you have even a little, tiny bit you can put toward investing, make it a priority.

In many ways, it’s about the habit. Start the habit of investing if you want to make a difference in your financial life. Once you get started and see the good results of your efforts, you’ll want to do even more investing.

Get started, and then look for ways to boost your contributions. No, $5 a week isn’t going to make all your retirement dreams come true. But if you start with that $5 a week, and then you make room to boost it to $10 a week after a couple months, pretty soon you’ll find that you have more money than you thought to invest.

Skip one night out a month. And invest the money you would have spent. Start a side hustle. Invest any money you make. Your account will build much faster that way.

Whether you make it a point to have money taken from your paycheck each month for your retirement account, or whether you invest your pocket change (or do a little of both!), the important thing is to get started and make investing a priority going forward.

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Can you invest in college? Get started now even with just a little money. Read More...

This is a paradox, or at least a frustrating fact.

The best time to invest is when you’re young. When you’re 18 and first able to begin investing in your own name, you’re in high school or college. When you’re in high school or college, education is your priority, and you probably don’t have a lot of income — if any.

So how do you invest for your future when you’re broke and still in school?

Also, you are (or should be) trying to avoid debt, so maybe you’re paying for college yourself by working. Unless you had the foresight and desire to keep the cost of your education as low as possible (by going to community colleges, matriculating part time, or receiving a full slate of grants or scholarships), you’re working, and likely putting any money you’re making towards paying for school.

Your environment is not conducive to saving for the future. Unless you’re receiving a lot of financial support, you’re probably struggling with money for the four (or more) years you’ll be in college.

But investing while you’re in college isn’t impossible.

An Adulting.tv reader wrote in to ask us how to invest while in college. And it’s a popular question because college students are told that investing early is the right thing to do, but have no idea where or how to start.

In college, if you’re even just thinking about financial priorities, you’re several steps ahead. Don’t worry about whether it’s better to start paying off debt early or save for the future through investing or savings accounts. There are a number of competing priorities for your money. Whether you tackle just one or spread whatever small amount of money you have across all the priorities, you’re going to end up in a better position than you would have otherwise.

Pay off debt, including deferred student loans. Avoid credit card debt. Build an emergency fund. Invest wisely. Overwhelmed yet?

No one expects you to do it all right away. But do something.

Don’t wait until after college to begin investing. The early bird catches the worm of wealth. If you wait four years while you’re earning that degree, it will take more money invested faster to make up for whatever gains you missed out on.

Be up front with anyone who’s helping you financially.

Communicating is an important piece of whatever strategy you want to use when it comes to anything with your money. If your parents are assisting you financially, whether paying for a portion or all of your education, providing you an allowance, letting you live at home for free or reduced rent, covering your health insurance, or anything else that might help you with money, keep them in the loop.

You may be eighteen or older, technically considered an adult, but if you depend on adultier adults, it’s only fair to discuss your financial plans with them.

They may provide some insight, they may decide to offer more assistance, or they may just be proud that you’re seriously thinking about your responsibilities and your future. They’ll definitely appreciate your honesty, candidness, and desire to take your responsibilities seriously.

Set aside a small amount of cash.

The more you can invest now, the bigger the money will grow. It comes down to the choices you make. Do you choose to spend every weekend partying and spending money on getting turnt? Or can you cut back some and set aside your booze money for later? Do you buy your textbooks full price, or can you locate used editions and pocket the difference?

Alcohol or no alcohol, every student spend some money on something that might not be necessary.

Cutting back is only one way to increase your flow. Bumping up your income has the same effect, and thanks to the numerous ways you can increase that income, you may have more flexibility than you would when reducing expenses.

You may be already spending all your time outside of your studies working to cover your tuition. But maybe you can add another couple of hours of work each week without affecting your education. Maybe you can ask for a pay increase. Perhaps you can multitask or squeeze another small job in there. I made some extra cash in college by teaching professors how to build websites. I also had a campus job at one of our libraries.

Maybe you have skills that people will pay for.

Just get started investing.

Even if you’re still adding to you emergency fund, paying your tuition bills, or paying off debt, you can set aside some of your cash for investing. These days, there’s virtually no minimum amount of money required to open a good investing account.

Recently, I opened an investment account at WealthSimple with no initial deposit, and I started sending $10 a week there. That’s less than the cost of one meal, and a great place and amount to start.

Don’t worry about picking stocks, studying companies, or thinking about how all the crazy things happening in the world affect the market or the economy. Just invest using a fund that tracks the stock market as a whole — an index fund — because it’s unlikely you’ll do better than that. Even professional money managers don’t, so don’t fall into any traps.

I’ll describe the investment you’ll need to choose.

See what resources your college has for you.

My college had — and still has — an investing club. Today, the club manages $1.7 million of the university’s endowment and offers resources for students who want to invest. The student organization claims to have a methodology that follows the gist of the best investing advice: track the entire stock market broadly and don’t chase down individual stocks. Trying to predict the movements of one company, whether it will succeed or not in the short-term, is basically gambling. It’s a bad idea.

But according to the financial reports the investing club has posted online, which aren’t recent, they would have done better had they just invested in a stock market index fund like the S&P 500 instead of choosing other investments.

So take a look at your college’s investing club. Get to know people for whom investing is a priority. But don’t necessarily follow every piece of advice you are sure they will bestow upon you. Put your money in a low-cost stock market index fund or ETF. That’s. It.

A service like WealthSimple will make that easy for you.

You might want to try these investing services while in college.

I’ve used many investing services, and WealthSimple is currently my top choice. It easily walks you through making the right choices, connecting your bank account, and setting up automatic withdrawals. If automatic withdrawals scare you, it’s understandable. But any job you have — on campus or not — should be depositing your pay directly into your bank account. Forget check cashing services.

Automatic withdrawals are really amazing and one of the best ways to build wealth consistently. You can “set it and forget it.”

If your job pays you in cash for some reason, take that cash and open a bank account. Almost every bank offers free accounts for students.

Here are the best investing services to use.

  • WealthSimple. Again, my top choice. It’s amazing that I can send $10, or even less, once a week, and start building a nest egg. In 30 years, that $10 a week will become $37,000 thanks to the growth in the stock market. And assume you’ll increase your contribution as you earn more money. Compounding returns will make you a millionaire over time.
  • Betterment. Another popular low-cost, low-minimum investing service. WealthSimple, Betterment, and some other services are called robo-advisors. A financial advisory firm or investment advisors are normally people who help you make investing decisions — though watch out for some because they are also salespeople who care more about their bonuses than whether you make the best choices for your own money. But robo-advisors take the human element out, and let you provide answers to a survey to determine how much risk you’re willing to take and provide you with a low-cost strategy for managing your risk and getting the best return.
  • Vanguard. The above two options are good when you don’t have $1,000 ready to invest. They’re also “managed” investment services, so they make the decisions about which funds to invest in. With Vanguard you can do it yourself — and I find that to be my preferred method. You can choose which vanguard fund you want to invest in. For example, VTSMX is the symbol for Vanguard’s total stock market index fund, which is incredibly low-cost, and you never have to worry about it losing more money than the stock market entirely. So if you save $1,000 before you start investing, you can open an account at Vanguard.

Notice there aren’t a lot of options listed. To keep it simple, these are the only investment accounts I’d recommend. There’s no need to list 10 different investment accounts, because one of the above should suit every college student’s needs. Even yours.

What type of investment is best for college students?

There are investment accounts, investment types, and investments. The companies named above are investment accounts — or companies that offer investment accounts. Investment types are classifications that have to do with what the investment is for. And investments are the actual things — shares in companies, bonds, funds, etc. — that are held within those investment accounts.

If you are going to the Vanguard route, you will most likely be fine over the long term. Choose the Roth IRA investment type. Because this is a retirement account, it helps you be disciplined about your money. You won’t be as tempted to withdraw your money from the investment in order to buy something you don’t really need.

In return for holding onto your investment until retirement, you receive some tax benefits. There’s a yearly maximum (which may not be something you have to worry about while in college), but all of your investments grow tax-free until you reach retirement age and withdraw your funds. Otherwise, every year your index fund does well, you would have to pay some additional taxes (or your refund from the IRS will be lower).

You can also choose a Roth IRA if you invest with the WealthSimple or Betterment robo-advisors.

In other investment types, those that aren’t IRAs, you do have to pay attention to the tax bill. Mutual funds and stocks generate income, and all income is taxed by the government. As a student, you may wish to avoid or put off generating taxable income when you don’t have to, and that’s the benefit of a Roth IRA.

What investments are best for college students?

Stocks are simply the best investments for the long-term. Yes, even better than “real estate.” Just smile and nod when your roommate won’t shut up about his uncle who invests in real estate and real estate will never lose value and real estate is the only way to get rich.

Long-term is the best strategy to consider as a college student because it is the first priority for investments. And over the long-term, stocks perform the best. But you have to leave them alone and invest in a wide variety of stocks that reflect the entire market. The best way to do that is through the low-cost index mutual fund described above.

End of story. Period. Full stop.

What about the 401(k) while in college?

This might be surprising, but you can contribute to a 401(k) while you’re in college. 401(k) and 403(b) plans are retirement accounts that are offered by employers. If you’re working full time while going to school, see if your company offers a 401(k). Even if you’re working only part-time, have a seasonable job, or are an intern, you may have the option as well.

While investment options in 401(k)s aren’t always as good as what you might find at Vanguard for your Roth IRA, one priceless piece of the 401(k) is matched contributions. For example, your company might say that they’ll match everything you contribute to your 401(k), dollar for dollar. There is no better investment than doubling your money immediately. So you should definitely go for it.

Look for the investment within the 401(k) that is closest to an index mutual fund. Sometimes it’s the default choice, but sometimes it’s hidden.

One thing to watch out for is a vesting period. Some companies require that you stay employed for a certain amount of time before some of that matching money officially becomes “yours.” The matching contributions might not vest for a year, or might vest gradually over the course of a few years. You’ll still get the money you invested in the 401(k) to keep with you forever, but your company’s contributions might never materialize.

Also, your investments made in a 401(k) are done on a “before-tax basis,” so a contribution reduces the amount of income on which you have to pay income tax. And like a Roth IRA, your investments grow without any need to pay tax on gains. You will pay taxes on everything, however, not just the gains, when you reach retirement and withdraw.

It’s hard to know if you’ll stay with a company over the course of a few years — but from my experience, I know I’ve stayed with companies longer than I would have expected. Not while in college, though.

But shouldn’t we be concerned about the coming recession?

I would not be surprised in the least if we go through another recession sometime soon. Do not let this stop you from investing. If you’re in college today, you most likely remember something about the latest recession, the worst of which was from 2007 to 2009. Your parents might even believe we never really recovered from that period of time. But for the most part, the country recovered and prospered for a few years.

That won’t stop the next recession. Chances are, your investments will lose some value. That’s why you stay invested in a stock market index fund. It’s highly diversified, so you spread out the risk across hundreds of companies.

But when your investment loses value, as long as you’re focused on the future, you have the opportunity to invest more at a lower price. The only way the stock market has helped people grow wealth is by having these recessions. Investors who stay invested and take advantage of recessions as opportunities are the ones who see the most growth over a long period of time.

You only lose money when you sell your investments during a recession and you wait until the news tells you that the economy is great before investing again.

The bottom line: don’t panic when your investments lose value. If your other money habits are strong, like spending only what you can afford, building your marketable skills, knowledge, and employability (part of the reason you’re going to college — it’s not just to find a mate), and not making poor decisions, you’ll find ways to use a recession to your advantage.

3 investing tips for college students.

1. Start yesterday. You already failed at this one, but don’t give up. If you start today, tomorrow you will have succeeded with this very important suggestion. I was a big procrastinator in college, and maybe you are, too. I waited until the last minute to write papers and other assignments, study for exams, and perform research. Your future is hanging in the balance, and it’s so much harder to make up for lost time. Even a small investment today makes a huge difference in the future.

Starting as soon as possible will help you avoid these scenarios:

  • You’ll having to work harder to earn more money to catch up to how much you want to have to be able to retire or be financially independent.
  • You’ll have to continue working longer before you’re able to retire, or you may never be able to retire at all. That’s one of the biggest worries today’s college students have, especially when looking at the economy and society.
  • You will need to delay buying a house or starting a family. With this, many college students are convinced that they’ll never be able to accomplish either of these goals in a reasonable amount of time, anyway.
  • You will eventually experience losing a job without any kind of cushion. You won’t be able to handle your expenses while looking for a new job, so you will go (further?) into debt and the repercussions for yourself and whatever family you might have could be disastrous.
  • You’ll never surpass your parents in wealth and success and will also trail behind the progress of your friends.

If some of these potential outcomes scare you, they probably should. Getting control of your finances involves knowing your income and expenses intimately while also making the best investment choices. It’s a lot of responsibility, but it is achievable.

2. Ignore some of your college buddies. All you need to start is a diversified, broad stock market index fund or ETF, or something similar, whether you open an account at WealthSimple, Betterment, or Vanguard. For some reason, investing advice is something people give freely when they know very little. Make one correct bet on a stock, and suddenly they’re an expert and a genius.

In no other way has “trust the process” been better advice. This is the process you must trust. Buy a low-cost total stock market index fund whenever you can, repeatedly, over the long term, and don’t sell until the very end. If you maintain that process regardless of what’s going on around you, you weather all the economic storms. Eventually, you’ll need to sell — what’s the point in accumulating wealth if you’re never going to use it? But keep your long-term investing funds invested for the long term.

When you get to the point where you have enough invested that you no longer can work, you can shift your investments around from “growth” mode to “income generation” or “value” mode. But that’s the process later on — not while you’re still able to build wealth through saving and working like you are in college and in the many years following graduation.

3. Don’t let investing be your only financial goal. If you establish good financial habits during college, you’ll be much more prepared to invest more throughout your life and reach whatever financial goals you’re likely to have.

  • Track your finances so you always know where you stand.
  • Avoid debt, and pay off any student loans as quickly as possible.
  • Start building a savings account that will eventually become an emergency fund when you are no longer in school and have to support yourself fully.
  • Don’t neglect your bills and other obligations.
  • Use credit cards wisely by spending only what you can afford to pay for immediately.
  • Put faith in yourself and don’t rely too much on parents or employers to take care of you.

Did you start investing while in college? How did you find the money?

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Let’s be real. Stock funds are probably your best bet. But here are some other ideas for investing to build wealth. Read More...

The best way to support Adulting.tv is to subscribe and leave us an honest review. Thank you!

After you’ve been through a couple stock market crashes, it’s hard to get excited about investing. In fact, many millennials are wary of investing — especially investing in stocks.

On the other hand, we’re told that investing is an effective way to prepare for the future. So, can you build wealth without stocks?

It’s possible, especially if you forget notions of stock-picking. In this episode, we’ll look at how to build wealth without stocks, providing different ideas that you can implement to help you grow your nest egg.

Concepts

  • Reasons many people don’t like the stock market.
  • How the news can influence how you think about the stock market.
  • A look at some of the ways people feel the stock market is stacked against them.
  • Why you need to develop multiple sources of income.
  • How to use real estate to build wealth without stocks.
  • Different business ideas that can help you grow your wealth.
  • Using P2P lending as a way to build wealth without stocks.
  • Exotic alternatives like cryptocurrencies, forex, and precious metals.
  • The risks you need to be aware of if you decide to try to build wealth without stocks.
  • Why you should consider funds (even if they are stocks) as one way to grow wealth over time.

Use this week’s DO NOWs to evaluate your situation, figuring out what kind of risk tolerance you have and thinking about what investments might be most appropriate for you.

Our listener question this week deals with the investing systems you are likely to see advertised everywhere. We talk about how you can tell legit systems from the shady offerings.

Become a Friend of Adulting

To get Adulting delivered directly to your device, subscribe using Apple Podcasts, Stitcher, Google Play, or your app of choice.

Join the Friends of Adulting! Please leave an honest review on Apple Podcasts. We would really appreciate the feedback!

Resources

Millennial feelings about investing

Like what you’ve heard?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Does the thought of investing scare you because you need a lot of money to get started?

That’s one of the biggest reasons people are missing out on the best way to build wealth over the course of their lives. It’s hard to just take that first step when you’re also concerned about feeding yourself or your family, covering your rent or mortgage, and affording every other necessity in life.

But you don’t need a lot of money to start investing. For example, $10 a week can turn into $75,000 if you give it some time. Here are a few ways to make that happen for you.

WealthSimple. WealthSimple arrived in the United States after its success in Canada, and its strength is its cost. When you’re starting out with investing, you don’t want fees digging into into your profits.

There’s no charge to transfer money from a bank account into your WealthSimple account. I started out with a $10 weekly investment, but you could start with $5 a month if you want, or if that’s all you can afford right now.

And there’s a special deal right now. If you open an account, you will receive a $50 bonus. Open an account today and get that $50.

When you sign up, you fill out a short questionnaire to determine how your money should be invested with a mix of exchange-traded funds — one of the most frugal ways to invest in stocks and bonds. You can accept their suggestions — and if you’re new to investing, that’s what we would suggest you do — or change them to suit your tastes if you have a little more experience with investing.

If your account stays under $5,000, you will not be charged any fee for the first year. Above or after that, the management fee is a small 0.5% — though, if you find yourself with more than $100,000 invested, they’ll reduce your fee to 0.4%. This is a great deal when it comes to investing, especially if you’re starting out with just a little bit of cash to invest.

LendingClub. If you’re open to a different kind of approach to investing, take a look at LendingClub. Rather than investing in stocks and bonds, you’re investing in loans. The returns are similar to stocks, and the risk is managed. The only drawback is that your investment is a little less liquid. That means if you need the money you’ve invested in an emergency situation, it might be hard to withdraw immediately. (That’s why it’s always best to have an emergency fund.)

LendingClub helps you pick out the best investments and gives you a good idea of what you can expect to return. You can use your investment to create an income stream. There’s a higher minimum investment of $1,000, but you can save up in a savings account until you are ready to start. After that, you can increase your investment with only $25.

Open an account with LendingClub today.

Ally Invest. Ally Invest is a discount brokerage with truly low prices. Yes, the $4.95 fee per trade will cut into your profits if you invest small amounts in stocks or ETFs. If you want to invest frequently, WealhSimple mentioned above might be a better option, though your investment selection is limited. On the other hand, Ally Invest really lets you take control of your investments. There’s less guidance, but more flexibility.

Ally Invest used to be known as TradeKing, which made its name as one of the most popular discount online brokerages.

Open an account with Ally Invest today.

There are three great options above for getting started with your investment portfolio. This is something every adult should have, and every adult should invest for their future, regardless of how difficult it might feel to let go of even $1 of cash today. Your future-you will thank your today-you if you just take one simple step forward today, even if it’s not a huge step. Thankfully, these resources are here to help you out.

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Don’t get caught in the buy low and sell high fantasy. Your path to best long-term results is boring AF. Read More...

The best way to support Adulting.tv is to subscribe and leave us an honest review. Thank you!

The Dow recently closed above 20,000. It seems like we’re still seeing a bull run, even with some losses. Indeed, even with recent drops, the Dow is still above 20,000. But will it last?

It’s tempting to try to time the market. But the problem is that, as humans, it’s hard for us to make good choices when it comes to investing.

We talk about the need to buy low and sell high, but is this actually practical advice? Let’s look at how likely this is for you to accomplish.

Concepts

  • What it means to buy low and sell high.
  • The realities behind trying to get in low and sell high.
  • Does stock picking make sense?
  • Downsides to frequent trading.
  • A look at indexing and how it works.
  • Riding the market instead of trying to beat it.
  • Why most people end up selling low — they have to.
  • Should you invest cash instead of having it just lying around?
  • The psychological downsides of trying to buy low and sell high.
  • The concepts of rebalancing and asset allocation
  • How to create “buckets” of money based on your time horizons.

This week’s DO NOWS are all about taking action for a better investing future. Consider opening an investment account and setting up an automatic plan to invest in an index fund or ETF. One good place to start is Acorns, which allows you to use pocket change to start investing in ETFs.

We also suggest picking up a couple of books to learn more about investing:

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Hardcover)


List Price: $24.95
New From: $12.99 USD In Stock
Used from: $7.95 USD In Stock

Oblivious Investing: Building Wealth by Ignoring the Noise (Paperback)


List Price: Price Not Listed
New From: 0 Out of Stock
Used from: $469.93 USD In Stock

This week, our listener asks about investing with a small amount of money. The good news is that you can invest, even if you feel like you’re broke. We talk about different choices you can make when you’re running low on funds, and how to make the most of each dollar. You can also read our article on how to invest when you’re broke AF.

Become a Friend of Adulting

To get Adulting delivered directly to your device, subscribe using Apple Podcasts, Stitcher, Google Play, or your app of choice.

Join the Friends of Adulting! Please leave an honest review on Apple Podcasts. We would really appreciate the feedback!

Like what you’ve heard?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Tara Falcone, the founder of ReisUP, was forced to adult at the age of 13 due to difficult circumstances when growing up. Read More...

Once in a while, we present Adulting.tv LIVE! Subscribe on YouTube to hear about future events, and share your questions about or suggestions for our next discussions!

Show Notes

Today, Tara Falcone from ReisUp joins Harlan and Miranda. Some of us delay adulting as much as possible while some of us have been forced to be responsible at an age when our friends were busy being young.

Find out why Tara had to start adulting at age 13 and how supporting herself financially changed her life.

Tara Falcone, CFP® is a CERTIFIED FINANCIAL PLANNER™, former Wall Street analyst, and Founder of ReisUP LLC. ReisUP is an early-stage financial services company dedicated to increasing investing education and access for everyday investors. Her mission is to empower people to “rise up” and play a more active role in achieving their financial goals.

Watch the video, recorded live, above, or listen to just the audio using the player below. Don’t forget to subscribe to the podcast!

Hosted byHarlan L. Landes and Miranda Marquit
Produced byadulting.tv
Edited and mixed byHarlan L. Landes
Music bybensound.com

Like what you’ve heard?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!

Financial stability is a requirement for successful adulting. Here’s how you achieve stability and recognize it when you are stable. Read More...

If financial independence is the dream, financial stability is the first adult step along the path towards that vision.

On the final day of the year, fifteen years ago, I returned home from a weekend away to find my belongings on the lawn in front of the house I was renting. (I used the Internet Archive’s Wayback Machine to fact-check myself using my old, anonymous personal blog, my first time reading those entries in over a decade.)

My roommate thought I was moving out at the end of December, and when I wasn’t around, she moved two people into the room I had been occupying for several months. I had been planning to move out at the end of January, and the roommate knew this. But my name wasn’t on the lease, so perhaps she thought she could do whatever she wanted.

A later entry brought back the memory of a related event: I visited that apartment again ten days later to pick up a few remaining items, and the new occupants were moving out because that roommate committed some kind of check fraud. But I digress…

Being forced out of my living space with no notice on New Year’s Eve was the end of a particularly bad year. I lost a job, lost my car, and lost my girlfriend. I had moved to northern New Jersey for a job I no longer had. I was in my mid-twenties, but I wasn’t financially an adult. I survived by spending on credit cards, avoiding student loan bills, and accepting help from parents.

With the necessity of moving in with family as 2001 became 2002, I vowed to turn things around for myself.

I wasn’t necessarily aware of the idea of financial independence, but thankfully, that is how I can describe my situation today. In early 2002, I just wanted financial stability. And I had to figure out how to get there.

How I became financially stable.

After college, I chose a career somewhere between education and nonprofit. The organization I was working for was meant to be a stop-gap while looking for a teaching position, but I did enjoy it, and I didn’t put enough effort into moving forward. It cost me more to work as a nonprofit employee than I was earning — and I wasn’t even spending a significant amount of money.

1. I found a new job.

Instead of looking for my ideal career, my priority was earning money and getting back on my feet, taking control of my situation. Nothing is permanent. I could work on my loftier life goals while at least working somewhere during the day that would allow me the flexibility to plan for the future.

Without a car, I was limited to jobs that were accessible by walking or by traveling on the train. I turned to a technical temp agency. That’s how I earned money over breaks during college, and I knew I had many skills that would serve me well in corporate settings. I found something right away — an executive administrative assistant at a major financial firm.

This had no relation to my degree, but it was a job. And it paid 50 percent more than what I was earning at the nonprofit organization. Theoretically, I could even stay involved with the activity I was passionate about on weekends while working a “regular” job.

2. I designed a budget.

My dad helped me brainstorm a basic budget on the back of an envelope. That’s how I remember the situation. This budget had to take into account paying off a cash advance from my credit card, consumer spending on my credit card, and my student loans. I intended to move out and be less of a burden on family as soon as possible, so I budgeted for rent, as well. And savings for the future.

Partly because I wanted to stick to my budget and partly because I needed some self-reflection time to recover from bad choices, I also saved money in the first few months of my new job by staying in a fortress of solitude.

The budget was essential for setting myself up for financial stability.

3. I tracked every penny.

I used free software to meticulously track my spending, making sure I was staying within my budget and paying my bills on time.

You can only have a clear picture of where you’re going financially if you know where you are. It is incredibly easy today to get a full snapshot of your finances at any time thanks to technology. Apps communicate directly and securely with banks, so you all you need to do is check your phone to see where you stand. The app adds your bank balances and subtracts your debt, and the result is your financial net worth.

And beyond your net worth, you need to know how that changes over time, so you track your income and expenses, too. Today, I use Personal Capital and Quicken.

4. I started saving for the future.

It wasn’t enough to have a bank account whose balance was increasing every month. My new job offered a retirement plan with a matching contribution. Always say yes to a matching contribution. It’s free money.

How do you know when you’re financially stable?

To be considered financially stable — a true sign of adulting — you must meet these criteria.

  • You must be spending less than you’re earning. It doesn’t matter which side of the equation you try to improve, but it helps to focus on both your expenses and your income. You can only cut your expenses back so far — but income potential is unlimited. When you spend less than you earn, you have a surplus. The surplus allows you to have some control.
    • Living paycheck-to-paycheck — spending every penny you earn — means you have no surplus and you are not moving towards flexibility or control.
  • You don’t have to be debt-free, but you must be paying down your debt and not accumulating any more. If you’re able to make your minimum payments on your debt and then some, you’re in good shape.
  • You’re not relying on loans or gifts from family. This is the cornerstone of stability. You can make it on your own, just with your income and your expenses. It’s true that you may be in financial trouble if your income disappears, especially if you’re only beginning to establish savings, but for now, you are making it on your own.
  • You are building your future through savings and investment. Your nest egg might not be too big just yet, but it’s growing. You’re putting aside extra money to create an emergency fund and you have a systematic transfer to an investment account, preferably a low-cost index mutual fund.
  • Your friends support your goals. Don’t waste time around people who give you a hard time for being responsible. Often, when one starts acting more grown-up, the friends still wading through adolescence grow bitter. Or maybe you’re the last one to cross the threshold into actual adulthood.
    • People reach this point at different times in their lives. I wasn’t financially adulting until I was in my late twenties. Some start when they’re 40. And I’ve seen some sixteen-year-olds who are taking control of their future I never would have considered.
  • You’re moving forward steadily in your career. How you progress is often up to you, even when are faced with resistance was you’re trying to gain more responsibility, authority, and compensation at your job. You do know that often you have to accept more responsibilities before being granted more authority and increases in compensation. This type of success proceeds at different speeds, but you should always be aware of where you stand, and you make decisions that move you forward.
  • You have health insurance and you take care of yourself. Your health and well-being affect your ability to have a life of any sort in the future, so you watch your health and have an appropriate health insurance plan. You see a doctor once every one or two years, at least, if you’re otherwise healthy, and you see a dentist and dental hygienist every six months. If you need work, you get it done.
  • You pay your credit card balance in full every month. Credit cards can be great tools for people who are financially stable. They allow you to time-shift your spending, just like the DVR time-shifts The Walking Dead. They allow you to collect cash back and points that can be used for travel. But only if you avoid interest charges, late payments, and pay your balance in full every month.
    • This could be considered an “advanced technique,” and many people start messing with credit cards before they are prepared to handle the responsibilities. So watch out.

Financial independence is the next step after financial stability, but it could take a lifetime to achieve. Imagine if you no longer had to rely on your job. Imagine if you could live the life that you wanted to live, go where in the world that you wanted to go, and do anything that you wanted to do — without any concern about what the financial consequences would be.

That is financial independence. And you can’t get there without financial stability first.

Are you financially stable? If so, when did you finally achieve it?

Like what you’ve read?

Join other #adults who receive free weekly updates.


For a limited time you’ll receive our new book, The Best Bank Accounts for Adults, when you sign up!