Investing the Difference

Making money is good, and not spending that money is good, but we need to also invest the difference wisely.

We'll be discussing what makes a “good” investment, and how your goals change as your investing capacity increases.

Everyone has different goals, but it's helpful to have a road map to guide your decisions (or to mindfully deviate from). I'd suggest knocking off these goals in this priority:

  1. Save up an emergency fund.
  2. Contribute to your 401(k) up to your employer's match.
  3. Pay off high-interest debt.
  4. Max out your tax-advantaged accounts: your IRA, your 401(k), and your HSA.
  5. Invest the rest in a balanced portfolio of index funds.

If you have dependents, you'll also have a few other considerations:

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