BUS 225 Final

1) Pay myself first

• set up direct deposit, allocate 5% to savings, 5% to emergency funds, 15-20% to Roth IRA & Roth 401(k)

• Health savings account (HSA)

  • Contribute $100 to $300 monthly or max it out for tax advantages

2) Fixed expenses

• Keep fixed costs low. Aim for fixed expenses to be less than 50% of your pretax income

3) Living arrangements

• Stay home or get a roommate. After college consider living with family or a roommate to save 10-30% of your paycheck towards a home down payment

4) Emergency fund

• Save for 6 months of expenses

5) Budgeting

• 50/25/25 rule- allocate 50% to your needs, 25% to funds, 25% savings and investing

6) Investment Portfolio

• Adjust with market conditions. Create an aggressive portfolio with large cap stocks- S&P 500, tech stocks- QQQ, and use dollar cost averaging

• Bonds; consider short-term bonds as a defense strategy during market downturns

• Alternative investments; begin learning about and investing 2-5% of your portfolio in alternative assets like cryptocurrency (ex: Bitcoin, Solana) to diversify & explore more growth opportunities

7) Employer retirement match

• Maximize retirement contributions; take full advantage of your employer’s match and aim to get fully vested in your retirement plan

8) Debt management

• Credit card and loan payoff; pay off my credit cards monthly and accelerate debt payoff by making biweekly payments or adding to the principle

9) Insurance planning

• Execute disability, health, life (group or term), home, car (minimum full coverage), dental vision

• Long-term care, use an HSA for long term care needs

• Umbrella insurance - add when your net worth exceeds the equity in your primary home plus your total retirement funds or if you have significant assets at risk

10) Tax efficiency and Business ownership

• LLC for the tax benefits; consider starting an LLC to reduce taxes and create passive income streams through side hustles

• Passive income ideas - real estate investing, dividend stocks like PM, SCHD, affiliate marketing, vending machines

11) Mortgage Strategies

• First time homebuyer opt for a 7/1 arm

• Subsequent homes, use a 15 to 30 year mortgage but accelerate payments to save significantly on interest

12) Car and Student loan payoffs

• Car loan payoff in 3 years, most economical to buy a car with 30k-40,000 miles and 3-4 years old

• Student loan, aim to pay off in 5 years

13) Education savings

• Open a 529 college savings plan for tax-free growth to fund children’s education

14) Prenuptial Agreement

• Protect your investments, consider a prenup, protect assets, and streamline divorce proceedings

15) Retirement Growth

• Debt-free retirement - pay off everything

• Withdraw 4-5% of your retirement funds annually

16) Home equity line of credit (HELOC)

• Use HELOC if market drops more than 20% unexpectedly and use for home improvements

17) Estate planning essentials

• Key documents - will, trust, power of attorney health & finance, letter of last instructions

• Beneficiaries; regularly update beneficiaries on all accounts, especially after major life events

18) Social Security

• Plan to take social security benefits at age 67

19) Visualization and positive affirmation

• Visualize and manifest your dreams often

• Say positive affirmations, reinforce a positive mindset about money and your passion by repeating affirmations such as

  • Money flows into my life effortlessly

  • I am good at making money

20) Personal growth

• Expand your knowledge with books like The Millionaire Next Door and Rich Dad, Poor Dad

21) Surround yourself with likeminded individuals

• Share what you have learned with family and friends. Teaching reinforces your knowledge and spreads financial literacy

• Compounding is so important! The secret to wealth. Time is the most powerful tool for building wealth. Compounding turns small, consistent actions into extraordinary outcomes over decades