1. Pay yourself first.
As soon as you get paid. put money into saving. Automating this is even better.
2. Keep a 6-month emergency fund.
If you have multiple streams of income, you can go as low as 3-months.
If starting out on your own, you could need as much as 12 months.
3. The stock market.
The stock market has a long-term average return of 10%
To calculate your return, it's common to use 6-8% to capture the effect of inflation.
4. The rules of 72.
Rules of 72 to tell you have long it will take your investment to double.
Example: The stock market return 10%, so 72/10=7.2 years to double your money.
5. Your age subtracted from 100:
Your age subtracted from 100 represents the percentage of stock you should have in your portfolio.
some are now using the number 120.
6. The 4-percent rule:
The 4- percent rules says you can safely withdraw 4% of your starting investment balance each year (adjust for inflation in subsequent year) and not run out of money.
7. Your net worth:
Your net worth should be equal to your age x Pre - Tax income / 10
Example: if you are 35 year old and $100,000 in annual income, then your net worth should be $350,000 (35 X 100000 / 10).
8. Have at least five time:
The time your gross salary in terms life insurance.
9. Before spending money:
The before spending money wait 24 hours and ask do I still want it? if you do go ahead and buy it. This will save you from a lot of impulses purchase.
10. Save for retirement:
First then your children education.
11. Value time over money:
The value time over money and experience over think.
12. Your home payment:
(Mortgage,interest, insurance) should cost less than 25% of your monthly income.
13. When buying a car use the 20/4/ 10 Rule if you have to.
• 20% down
• 4 year loan
• <10% of your monthly income
I still prefer to buy older vehicles with cash, but each to their own.
14. You should save:
You should save at least 15% of your income for retirement.
15. Put all or percentage, of your raises into saving and investment.
This help of avoid lifestyle inflation and move up your retirement date.
16. Avoid high-interest debt:
If you have it,use the avalanche or snowball method to pay it off (Google them)
17. Always take an employer 401k match.
Many employer will match a percentage of your paycheck.
This money is getting an immediate 100% return if you turn this down. it's the same as turning down a rise.