Invest in an emergency fund
Before you invest in anything else, invest in an emergency fund. This is the amount of money you have set aside to prevent events such as unemployment, illness or economic crisis.
“For me, a good starting point for you is an emergency fund,” says Carly Hensley, financial advisor at Merit Financial Consulting in Charlotte, North Carolina. When you do not have this fund on hand and encounter an emergency, you will quickly fall into difficulty and easily become financially exhausted. That can really be a problem, especially when you’re nearing retirement.”
Personal finance experts all believe that an emergency fund is at the heart of financial health. At some point, an emergency fund will be a very important financial aid. Building and maintaining this fund helps you ensure that your financial goals are maintained even in the event of a pay cut, job loss, or medical problems. 3 to 6 months of living expenses for this cash account. Of course, the exact number depends on your job stability, health, number of dependents, etc.
An emergency fund gives us a better mentality to make decisions when things go wrong, opening us up to more choices. In an emergency, every coin becomes more valuable. Even with 1 million dong, that’s a good starting point.
If the equivalent of 3 to 6 months’ worth of living expenses seems daunting, Hensley recommends starting with smaller amounts. It can be 500 thousand or 1 million dong after each salary to accumulate for emergencies. Once you take those first steps, the road behind will become much easier.
Invest in your earning potential
It is a wise decision to invest your time in activities that can increase your earning potential. It could be self-learning new skills, taking online courses to supplement certifications… This not only works in the short term as you get a higher salary, but also helps yourself. you in the next step.
In addition, a higher level of income also makes a difference in social insurance contributions. A higher income equals a higher premium (the maximum salary used to calculate the social insurance premium in Vietnam is 20 times the base salary).
Invest for retirement
Even if you’re still decades away from retirement or those days are just around the corner, it’s always important to invest for retirement. It could be participating in social insurance at work, voluntary social insurance or investing in retirement funds.
If you still have the mindset that “retirement is for the elderly”, you will have a hard time building up financially. A basic figure given by experts is that you should contribute at least 10% of your income to retirement. In case you can’t keep up with that number, do the best you can and gradually increase the cumulative rate.
The important thing to remember here is that the earlier you start, the quicker you will get to your destination. Your perseverance and the 8th wonder – compound interest will help you open the door to rich retirement days.
Invest in your financial knowledge
According to Hensley, when we start with an investment, the desire to learn more about finance is aroused. There are many ways to help you improve your financial knowledge, through reading books, listening to podcasts or taking in-person, online courses…
Remember, you don’t have to be a financial expert to invest in the stock market. Don’t let that knowledge scare you off, get in the way of investing.
at Blogtuan.info – Source: Eva.vn – Read the original article here
