4 Essential Pillars of a Strong Financial Foundation

A financial plan built on risky investments, debt, margin, or any other speculative position stands a could chance to collapse at some point if the economy takes a turn.

The Importance of A Strong Financial Foundation

While times are good, focus more on building your financial foundation so that you can weather the next storm and then capitalize on it on the back end.

The Four Pillars of a Strong Financial Foundation

If you take care of your business in these areas, you’ll be in an excellent position to weather almost any storm.

Income

Maybe this one is obvious, but your financial foundation starts with generating income. The more money you make, the bigger your shovel to help with the other three pillars.

1

Pay Down Debt

Take out a piece of paper and write down all of your debts and the interest rate. Pick a debt you can pay down reasonably fast, even better if the interest rate is higher.

2

Emergency Fund

One of the best ways to build an emergency fund is to “pay yourself first.” This could mean setting up an automatic deposit into a secondary bank account.

3

Retirement Savings

When should you start investing in retirement? The sooner, the better. Every dollar you invest in your 20s will have decades to grow before retirement.

4

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