Investments both produce and consume Money.
Scott’s 9-Point Investment Plan - Wikified
Do these steps in the order shown…
- Make a will.
- Pay off your credit cards. If you don't have a credit card then get a cash back card and use it, but ALWAYS pay the full balance. This will not only get you cash back, but will help build your credit. Never have more than 3 credit cards under any circumstances.
- Get term life insurance if you have a family to support. Also consider health insurance, auto insurance (if applicable), and long-term disability insurance.
- Fund your 401(k) or 403(b) as much as you can afford to, and to the limit of company-matching if at all possible. Aim for a 70/30 allocation to low-fee stock and low-fee bond funds, depending on what choices are available.
- Fund your Roth IRA to the maximum--usually $4000 a year, depending on your income and age. Try to maintain your 70/30 overall allocation while investing your Roth IRA.
- Buy a house if you want to live in a house and can afford it.
- Put six months worth of expenses in a money-market account.
- Take whatever money is left over and invest it so that 70% of your total investments (including 401(k) and Roth IRA) are in a low-fee stock index ETFs and 30% are in low-fee bond funds or ETFs. Use any discount broker, but beware of heavy discounts that require active trading to be realized. Never touch it until retirement.
- If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio.
Maybe each point could be explained on a page of its own. For example, how does making a will impact on your investment plan?