Investing All-in-One For Dummies. Eric TysonЧитать онлайн книгу.
for how many months’ worth of living expenses you should have:
Three months’ living expenses: When you’re starting out, this minimalist approach makes sense if your only current source of emergency funds is a high-interest credit card. Longer-term, you could make do with three months’ living expenses if you have other accounts, such as a 401(k), or family members and close friends whom you can tap for a short-term loan.
Six months’ living expenses: If you don’t have other places to turn for a loan, or if you have some instability in your employment situation or source of income, you need more of a cushion.
Twelve months’ living expenses: Consider this large stash if your income fluctuates greatly or if your occupation involves a high risk of job loss, finding another job could take you a long time, or you don’t have other places to turn for a loan.
Saving for large purchases
Most people want things — such as furniture, a vacation, or a car — that they don’t have cash on hand to pay for. Save for your larger consumer purchases to avoid paying for them over time with high-interest consumer credit. Don’t take out credit card or auto loans — otherwise known as consumer credit — to make large purchases.
And don’t be duped by a seemingly low interest rate on, for example, a car loan. You could get the car at a lower price if you don’t opt for such a loan.
Investing for a small business or home
In your early years of saving and investing, deciding whether to save money to buy a home or to put money into a retirement account (for the tax benefits and to work toward the goal of future financial independence) presents a dilemma. In the long run, owning your own home is usually a wise financial move. On the other hand, saving sooner for retirement makes achieving your goals easier and reduces your income tax bill.
Presuming that both goals are important to you, you can save toward both goals: buying a home and retiring. If you’re eager to own a home, you can throw all your savings toward achieving that goal and temporarily put your retirement savings on hold.
When saving money for starting or buying a business, most people encounter the same dilemma they face when deciding to save to buy a house: If you fund your retirement accounts to the exclusion of earmarking money for your small-business dreams, your entrepreneurial aspirations may never become reality. Consider hedging your bets by saving money in your tax-sheltered retirement accounts as well as toward your business venture. An investment in your own small business can produce great rewards, so you may feel comfortable focusing your savings on your own business.
Saving for kids’ higher educational costs
Do you have little ones or plan to have them in your future? You probably know that rearing a child (or two or more) costs really big bucks. But the biggest potential expense awaits when they reach young adulthood and consider heading off to college, so your instincts may be to try to save money to accomplish and afford that goal.
This concept may sound selfish, but the reality is that you need to take care of your future first. Take advantage of saving through your tax-sheltered retirement accounts before you set aside money in custodial savings accounts for your kids.
Last-mile boot camps: Last-mile programs teach students technical skills and clear the pathways to jobs in growing industries like technology, biotech, fintech, and healthcare.
College minimum viable products (MVPs): These programs combine the technical skill training and placement of traditional last-mile programs with significant cognitive and noncognitive skill development that students get from a good college.
Apprenticeships: Emerging apprenticeships provide pathways for jobs in the manufacturing, healthcare, pharmacy, information technology (IT), insurance, financial services, and software development industries.
Staffing firms: These companies hire workers and staff them out to clients. For example, Revature, an IT staffing company, hires experienced software developers. Also, Avenica places students from many colleges and offers last-mile training across many industries.
Vocational and trade schools: Also known as career and technical education (CTE), these schools provide gateways to a wide range of jobs in the automotive industry, culinary arts, emergency services, healthcare, and more.
Investing short-term money
So where should you invest money earmarked for a shorter-term goal? A money market account or short-term bond fund is a good place to store your short-term savings. See Chapter 4 in Book 2 as well as Book 4 for more information on these options. The best bank or credit union accounts may be worth considering as well.
Investing in Retirement Accounts
During your younger adult years, you may not be thinking much about retirement because it seems to be well off in the distance. But if you’d like to scale back on your work schedule someday, partly or completely, you’re best off saving toward that goal as soon as you start drawing a regular paycheck.
This section explains the benefits and possible concerns of investing through so-called retirement accounts. It also lays out the retirement account options you may access.