October 25, 2017
Here are the initial steps you should take if you are at the early stages of your career. If you adopt them, you will be off to a great start in your journey to financial freedom.
First, pay off all debt as quickly as possible. Debt is addictive and pervasive. Don’t even think about investing (with the exception noted below] until you have zero debt. This includes your student loans and especially credit card debt.
Second, if others are dependent on your income for support, you need to purchase life and disability insurance. At a young age, and assuming you are in good health, consider a 20 year, renewable and convertible term life insurance policy. The premiums on this policy will remain the same for the 20-year period. The “renewable” feature means you can renew coverage past the initial term, even if you are not eligible for a new policy. The “convertible” feature means you have the right to convert the policy into permanent life insurance (that builds cash value), without evidence of insurability.
There are various types of disability policies. You can learn about your options here.
The bottom line is that premature death and disability doesn’t just happen to others. You owe it to your loved ones to have adequate protection in place.
Third, if (and only if) your employer matches a portion of your contribution to a retirement plan, invest the minimum necessary to get the maximum match. Use a service like this one to help you select the best investment options from what is likely to be largely poor choices.
Your financial journey is a long one. The good news is you have the benefit of time. Start by taking these three steps to financial independence. If you do, I like your chances.
This blog discusses why you need life insurance at an early age.
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