Thinking of Cashing Out?

If you are one of the millions of young investors that invest a little each month through an investment app, then this post is for you.

First of all, this market volatility can be unnerving to even the most sophisticated investor. It is one of the greatest risks and opportunities of investing your hard earned money in other people’s companies. Second, there are some very important financial habits to consider before investing.

  1. Review your fixed expenses on a regular basis and strive to keep them under 70% of your actual net income (after taxes/deductions)
  2. Keep your monthly debt obligations (total monthly payments including mortgage) under 40% of your actual net income
  3. Sweep a minimum of 5% each pay period into a separate account to build up a safety net that you can use to pay your bills in the event of illness, injury, job loss or crises
  4. Invest in yourself and your ability to earn income or replace your income – Insurance (Health, Disability, Property), Pay down debt and Improve future ability access to credit
  5. Build up a 4 to 6 month runway you can easily access in the event of emergency – major financial emergency only

Develop these five steps early in your career and keep building on them. If you still have disposable income, definitely contribute at least 5% to a 401k if available (contribute up to company match at the least). No 401k? No problem. Start a Roth IRA or Traditional IRA through an investment app or trusted online investment brokerage. Once you have at least $10,000, seek out a consultation with an Investment Advisor to review your portfolio.

If you have not been building a solid financial foundation, you may need to access the money you have been investing over the past few months or years. Do not blame yourself or feel bad. You were saving!! That’s a great thing! When my family was younger I had to pull funds out of my investments because I did not know about building a strong financial foundation first.

Next steps?

  • Invest time in yourself now.
  • Define what you want to accomplish by when.
  • Create a step by step plan to improve your financial habits and learn how different tools work.
  • Begin to build brick by brick and make it strong enough to weather the storms of life

Please feel free to share any questions, concerns or comments. Breathe deep and exhale. You’ve got this!

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