A pillar is a person or thing regarded as reliably providing essential support for something.
There are many pillars in this life. There are pillars to happiness, relationships, and wealth. Pillars are simply the bare bones that are required before all the confusing routes and rules to get something and somewhere are developed. For example, the pillars of the United States are Life, Liberty and the Pursuit of Happiness. Everything else was built around those three standing pillars, or principles.
Here at Let’s Talk Future our goal is to cut through the noise and non-sense about money and give you the tools you need to build wealth, invest for the future, and put a plan in place. Those are our show pillars.
Pay Down Debt, Have An Emergency Fund, Invest for the Long-Term
Most advisors, and personal finance, articles will agree there are three pillars to helping you build wealth.
First, pay down your debt.
You can work on saving as much as you can, but if you still owe a lot on credit cards or your house, that savings may be needed to pay it off anyway. It’s better to consider paying off debt earlier, especially if you have high interest rates on revolving debt.
Next, it’s imperative to have a cash emergency fund accessible.
The fact is life happens. The car breaks down, kids need braces, or the roof leaks. It’s important to have cash set aside to deal with these issues when they come up. That way you won’t need to dip into your retirement savings and potentially risk having tax penalties for withdraws. Usually, the rule of thumb is that you should have between three and six months’ worth of savings to pay essential bills should life happen. It’s different for everyone.
Finally, you should plan for the long-term.
Investing for retirement is about having what you need years in the future. There are many ways to invest. For example, you could invest actively or passively. Active investing involves hiring someone to pick and choose what’s in your portfolio. Passive investing usually involves following index’s performance. Passive investing is also referred to as indexing.
While both have advantages and disadvantages, everyone’s situation is different. You should consult a financial advisor, with these pillars in mind, to determine what the best strategy for you personally is. Having a good foundation, with solid pillars in place, is a must when building anything! Building wealth to help support your future is no exception.
We take listeners through our process for planning, investing, and saving for the future every week. This week we had a lot of and fun facts, and great call in’s, with excellent questions. Be sure to listen to them here,
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“Never say never because limits, like fear, are often just an illusion.” – Michael Jordan
- Caller question about Social Security penalties after divorce. (4:36)
- There are 3 main pillars to get on track to finances in place and build wealth. Learn about them here. (7:40)
- There are many rules when it comes to retirement, especially Social Security and Medicare. Here on the Let’s Talk Future show our goal is to cut through the noise and non-sense about money. We did just that for listeners on this episode. (19:45)
- Social Security is money we get paid after we retire, but where do they come up with that number? Listen to find out how they calculate your retirement income. (26:10)
- Why is a 401k Loan a mistake? (33:24)