Broke AF? Worried about your debt? You might think you can’t invest, but maybe you can. Here’s how to decide what step to take next on the road to financial freedom. Read More...

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One of the best ways to build wealth for retirement is to invest.

Putting money in a retirement account now is a good way to get a good start on building a nest egg that leads to financial independence later.

But what if you have debt?

Can you invest when you have debt and feel broke AF? Does it make sense to pay off your debt before you begin investing?

This week, we talk about the considerations that come when trying to decide whether or not to start investing when you still have debt.


  • The importance of investing.
  • Ways debt can slow you down.
  • Are you really ready to invest?
  • Can you balance paying down debt with investing?
  • Have you taken care of other areas of your finances, like an emergency fund?
  • Tips for making investing more effective.
  • How to decide if it makes sense to invest instead of pay down debt early.
  • Different types of debt and which you should tackle first.
  • The importance of being able to sleep at night.

Don’t forget to listen to our “Do Nows” this week. We’ll take a look at how to create a debt payoff plan, open an investment account, and assess how much you need to start saving today to hit your retirement goals.

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Hosted byHarlan Landes and Miranda Marquit
Edited and mixed bySteve Stewart

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Stop believing investing myths. The truth is that you can probably start investing today and build wealth for future. Read More...

You know you need to invest.

It’s time to get off your assets and put them to work.

Unfortunately, there are a lot of myths surrounding investing. It’s easy to be intimidated by investing when you think about the jargon and you’re concerned about what the stock market is doing.

Before you assume that investing just isn’t for you, get the full story. Here are five investing myths keeping you from leveling up with your money:

1. I need a lot of money to get started.

It’s a good thing this is bullshit. You can totally invest even when you’re broke AF.

First, you can open an investment account with many brokers with $0. Many brokers will let you invest between $50 and $100 a month if you sign up for an automatic investing account.

There are even startups, like Acorns, that allow you to invest your pocket change. Use dollar-cost averaging to start investing consistently. Eventually, you’ll want to boost the amount you invest each month. But the important thing is to start investing early.

2. I don’t have enough assets to get help investing.

Many of us feel more comfortable when we have someone to help us make investing choices. Sadly, there are money managers that do require you to have a lot of assets before they will even look at you.

But that doesn’t mean you’re out of luck.

Thinking that you need a human person dedicated to your investment management is one of the biggest investing myths. Get over it and embrace the technology available to us.

The rise of robo-advisors can be a great help to anyone with few assets and a desire for a little direction. You won’t get personalized help from robo-advisors, but you will get an idea of how to start, and someone else to guide you.

If you want a little more personalized direction, but don’t have the asset count for someone to straight manage things for you, consider a fee-only financial planner. At the very least, one of these folks will help you create a map for the future for a flat fee.

3. I need to understand how to pick stocks.

Honestly, you shouldn’t go anywhere near stock picking until you have a little experience with investing.

When you start investing, it makes more sense to start with index mutual funds and ETFs. These are groups of investments that have something in common. Personally, I prefer all-market index funds that follow everything publicly traded on U.S. exchanges. I also like S&P 500 funds because they offer access to a wide swath of the market.

Index funds and ETFs allow you take advantage of overall market performance rather than relying on your ability to get it right with a few individual stocks. Over time, the market generally goes up; it’s never gone negative in any 25-year period.

Start with funds. Learn a little. Get your feet wet. If you still want to pick stocks later, use not-for-retirement money to experiment.

4. I have to know how to “win.”

Do you have a competitive nature? If so, you might be tempted to think that you have to beat the market.

While it’s fun to think you can outperform the market, it’s foolhardy to focus on such a goal. Investing myths lead you to believe that it’s not worth it unless you’re “winning” against someone.

The truth is that you don’t need to be better than anyone. You just need to focus on your own goals. Stop worrying about how your friends invest. Don’t tie your self-worth to whether or not your portfolio does better than the market.

You don’t need a portfolio that’s bigger than someone else’s.

What you need is a plan to meet your personal financial goals.

Rather than obsessing over whether or not you are “winning,” look at whether or not you are going to hit your personal milestones. Perform a retirement assessment. How much do you need to retire? How much should you set aside (perhaps in index funds!) each month to reach that goal?

As long as you are on track to meet your goals, it doesn’t matter whether you beat the market — or your co-worker — at investing.

The worst thing you can do in any financial situation is compare yourself to others. Compare yourself to you and move forward.

5. I’m going to lose everything if the market crashes.

We all remember the market crash of 2008 and 2009.

It’s one of the reasons many of us are afraid to invest today. One of the most persistent investing myths is that you will lose everything during a market crash.

Do you know what I did when things looked ugly at the beginning of 2009?

I bought more shares of my favorite index funds.

For the most part, you only lock in your losses when you sell low. I stayed the course during the last couple of market events and even added to my portfolio. You get more bang for your buck when you buy during the dips.

While you’re young, you can afford to let it ride when you go through these crashes. As you get closer to retirement, you can consider moving some of your assets out of stocks and into bonds and/or cash. That way, your portfolio is somewhat protected close to the time you will actually need to start using that money.

But, for now, chances are that you can get through whatever the market throws at you.

There will always be down markets, bear markets, and crashes. Don’t react with panic and unload when you will guarantee losses.

Bottom line: investing is your best bet.

If you want to build long-term wealth, you need to get over the investing myths. Investing is your best bet for building financial independence in the future.

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Do you want to make the most of today’s money for tomorrow? Make it rain for your future self. Read More...

One of the best times to set aside money for the future is now, while you’re young and compound interest can work longer in your favor.

Even if you think you don’t have enough money to invest, the truth is that you probably do. And one of the best things about using accounts that offer tax-free investment growth when your young is that you pay taxes at a lower rate.

If you want to make it rain later, the right planning now is the way to go.

Roth IRA

The Roth IRA is a solid choice when you have your first job. (There is also a Roth 401(k), so if your company offers a retirement plan, ask if there is a Roth version.)

With a Roth account, you make your contribution after taxes are taken out of your paycheck. However, this isn’t such a bad thing when you consider that right now you’re probably making very little anyway. Your taxes are lower than they might be later on.

A Roth account is all about the tax-free investment growth. When you withdraw money, you don’t have to pay taxes on it like you do with a “regular” retirement account. The longer you invest in a Roth IRA, and the longer the money grows, the bigger your benefit later on because you have the potential for more gains the longer you grow your account.

It’s a huge deal to not have to worry about paying taxes when you withdraw from your account.

Health Savings Account

If you want to level up your tax-free investment growth, consider opening a Health Savings Account (HSA) and contributing regularly.

The HSA offers a unique chance to invest because your contributions are made before taxes, so you get a tax deduction. Later, if you withdraw the money for qualified expenses, you don’t have to pay taxes on that money, either. Money in the HSA is truly tax-free — as long as you use it for qualified health care costs.

You can’t immediately invest the money in the HSA, though. Most of the time, you can only invest after your account balance exceeds $2,000. If you make regular contributions, you will get to that point and be able to enjoy tax-free growth.

In order to qualify, you need to have a high-deductible health care plan. As long as you don’t have really high health care costs, this type of plan can be great. It’s usually less expensive than other plans, and you can put your savings in the HSA.

I like to think of my HSA as a health care retirement account. I don’t actually use it now. Instead, when I am older, I’ll withdraw from my Roth IRA for income, and use the HSA to pay for medial co-pays and other medical costs. It will all be done with money that I won’t have to pay taxes on.

Now is the perfect time to start putting your money to work for you. Your taxes are likely the lowest they will ever be, and you can keep your expenses small, too. Focus on tax-free investment growth today, and you’ll be more likely to enjoy financial freedom later.

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Congratulations on landing your first real job! Before you get caught up in your work, take some time to navigate your surroundings. Read More...

Now that you you’re successfully navigated the interview and hiring process, you get to take a big step forward in your career by starting it. Or, if your job isn’t exactly in your career path, at least you’re working.

Before long, all of your job’s roles and responsibilities will be clear, and you’ll start making your mark. You may get a little overwhelmed with your new environment, so take some time now to deal with some of the tasks that are essential at the start of your first real job. Ignore these tasks, and you will miss opportunities to set yourself up for long-term success. Don’t blow it.

1. Get a true sense of your take-home pay.

Surprise! Your paycheck is a lot smaller than you expect it to be. A $40,000 salary after federal, state, and local taxes might leave you with only $500 a week. For reals. Even less will end up in your pocket if you have an automatic enrollment in a retirement plan.

You may get some of the money withheld for taxes back when you file your tax return, but your net pay, what you take home, is what you should focus on right now, not your salary.

2. Figure out your new budget.

Now that you know how much income you really have to work with, write down your new budget. Start with the things you need, like your rent or mortgage payment, your food (groceries), and your transportation to and from your workplace. Set aside as much as possible for savings. You’ll need something set aside for emergencies. Then try to fit in some of the luxuries, like dining out, entertainment, vacations, and nicer clothing. If you can.

If you can’t, just hang on for now. You can’t have everything you want in life the moment you start your first real job.

Read this article to see how to make a budget based on priorities. Once you make the budget, track it, so you stay within its limits or realize that you need to change your assumptions about your spending.

3. Open bank accounts if you don’t have any.

It still surprises me how many newly-minted grown-ups don’t have bank accounts. When you get paychecks for working, not cash, you need to have at least one bank account, a checking (debit card) account. Don’t take your paychecks to check-cashing places or Walmart. They charge fees that add up quickly.

Instead, find a free checking account with free debit cards. You might want to check with whatever bank has a branch closest to you, and ask about free checking and free debit cards, but some communities don’t even have any bank branches.

It might be easier to just go online. Ally Bank and Capital One 360 are two of my favorite free online checking accounts.

Once you open your checking account, you can tell your supervisor or human resources department at work that you want to set up a direct deposit. Your paycheck will be sent directly to your bank, so you just use your debit card when you need to pay for anything or go to an ATM when you need cash.

4. Invest some of your income.

6 Life-Changing Tips When Starting Your First Job

If you don’t start investing right now, you will always be trying to catch up. First, make sure you’re enrolled in your company’s retirement plan, if the company offers one. If the company doesn’t offer a 401(k) plan, a 403(b) plan, or anything else, you’ll have to start investing on your own. Put money aside for a few months, and open a retirement account at Vanguard.

Choose a Roth IRA if you already have a plan at work, or a traditional IRA if you don’t. Invest in a broad index mutual fund, like the Vanguard Total Stock Market Index Fund (VTSMX), for now. It’s a low-cost way to save for retirement, and keeping your costs low is the most important factor in building wealth over the long term.

5. Understand your benefits.

Your employer may offer some benefits, including health insurance, disability insurance, life insurance, free lunches, a weekly chair massage, or personalized humanoid robot butlers. You’ll only find out what you get by reading all the information you receive your first few days on the job.

If you have a choice, and you might for something like health insurance, review the information carefully and ask around for advice. It’s good to know what your health insurance options are, and what’s covered, in case you need to use them.

6. Learn about your company’s culture.

Getting ahead and succeeding in your job isn’t just about your job performance or doing all that is expected of you. You’ll also need to be able to fit in — without losing your individuality, of course. Spend lots of time with your coworkers. Observe how people behave and present themselves on the job and listen carefully to important discussions. Look for the clues, both subtle and obvious, that will lead you towards making a good impression. Much of this is based on mimicking the behavior of the more successful people at your level.

Use this time exploring the culture to work on your communication skills (ask questions!) and build relationships with people in your workplace.

The most important thing about getting started is not to expect to be treated like a superstar on your first day on the job. You’re a unique snowflake, that’s for sure, but so is everyone else. As the new girl or guy, you have to put in time and effort before you are able to reap the rewards of great benefits, a salary that reflects your worth, and personal freedom.

You’re not entitled to the best of what your employer (or life) has to offer just by showing up, but when you put in the hard work and prove yourself, success will find its way to you much easier. After some time.

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