DO IT YOURSELF PATHWAY: STARTING OUT

When you start your financial journey, you want to choose the right path and then make small steps down that path for decades.

  • You are starting out your career
  • You are in the process of developing your personal life
  • You are in the process of taking on debt to pay for things like a home
  • You often don’t have a lot of savings yet
  • You are purchasing items you have never had to purchase before

   Initial Planning Concerns to address:

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Since you don’t have enough money for everything, you need to prioritize your spending.

  • Pay off credit card debt
  • Emergency Fund
  • Retirement Savings
  • Take advantage of your employee benefits
  • Insurance – Risk Management
  • Homeownership
  • P&C Insurance
  • Pay off credit card debt
  • Emergency Fund
  • Retirement Savings
  • Take advantage of your employee benefits
  • Insurance – Risk Management
  • Homeownership
  • P&C Insurance
  • Pay off credit card debt
  • Emergency Fund
  • Retirement Savings
  • Take advantage of your employee benefits
  • Insurance – Risk Management
  • Homeownership
  • P&C Insurance

Credit cards often help you build credit. They can represent emergency savings in a pinch and can have valuable rewards programs. Conversely the interest rates can destroy your finances. Obtaining a credit card but paying it off monthly is a great way to balance all of this. Generally have 2 to 3 credit cards maximum.

It is best to have 3-6 months of salary in savings in case you lose your job or have large unexpected expenses. Technically it should be 3-6 months of your budget but who actually has a budget?

Employee Benefits – Our general orders of importance

  1. Health Insurance
  2. Disability Insurance
  3. Life Insurance
  4. Dental/Vision
  • Dental/Vision
  • A common strategy when you are younger and healthier is to save into an HSA, invest it and then use it later in life for medical expenses. This let’s you defer current taxation, grow the funds tax deferred and then use it tax free for a qualifying medical expense.
  • If you have medical conditions or expect medical expenses, a lower deductible plan is better
  • We usually don’t suggest FSAs until you have more predictable medical expenses, as the use it or lose it feature can be a major hassle
  • A common strategy when you are younger and healthier is to save into an HSA, invest it and then use it later in life for medical expenses. This let’s you defer current taxation, grow the funds tax deferred and then use it tax free for a qualifying medical expense.
  • If you have medical conditions or expect medical expenses, a lower deductible plan is better
  • We usually don’t suggest FSAs until you have more predictable medical expenses, as the use it or lose it feature can be a major hassle
  • You are more likely to be disabled during your working years than to die
  • You should consider a buy-up option if your employer offers it
  • You can quote and apply for Disability Insurance yourself right here (Link to other page or tool)
  • Most Plans offer 2X to 5X earnings
  • Make sure to coordinate with your personal coverage to generally not exceed 10X income.
  • If you are relatively unhealthy, make sure you get your workplace coverage to take advantage of group pricing
  • We believe in personal Term Life Insurance, quote and apply here  (Plum)
  • A common strategy when you are younger and healthier is to save into an HSA, invest it and then use it later in life for medical expenses. This let’s you defer current taxation, grow the funds tax deferred and then use it tax free for a qualifying medical expense.
  • If you have medical conditions or expect medical expenses, a lower deductible plan is better
  • We usually don’t suggest FSAs until you have more predictable medical expenses, as the use it or lose it feature can be a major hassle
  • You are more likely to be disabled during your working years than to die
  • You should consider a buy-up option if your employer offers it
  • You can quote and apply for Disability Insurance yourself right here (Link to other page or tool)
  • Most Plans offer 2X to 5X earnings
  • Make sure to coordinate with your personal coverage to generally not exceed 10X income.
  • If you are relatively unhealthy, make sure you get your workplace coverage to take advantage of group pricing
  • We believe in personal Term Life Insurance, quote and apply here  (Plum)

4. Dental/Vision

  • A mortgage represents your single largest expense
  • Good credit is a must to getting a good interest rate on your mortgage
  • Increases in your wages tend to minimize the impact of mortgage payments over time
  • Homeowner’s insurance will be required with a mortgage and you should have it anyway
  • Don’t forget Umbrella coverage
  • It’s generally time to graduate from state minimums to real coverages to protect your growing assets
  • We suggest seeking professional advice from a Property and Casualty Insurance Agent
  • A good package often includes, Home, Auto and Umbrella coverages

Set up your retirement savings

  • If you have an employer match, generally the minimum you should be saving is the amount to get the matching contributions.
  • As a general rule of thumb, you want to save roughly 10% to 12% of your income into retirement accounts like an IRA, 401(k), or similar
  • Deferrals versus Roth, we suggest Deferrals: 
  • You may want to consider choosing more aggressive investments
  • If you are not sure what to invest in, look at Target Risk funds. They blend the funds for you based on your risk tolerance. As an example:
    • Vanguard calls these Life Strategy Funds
    • Fidelity calls these Target Risk Funds
    • We usually suggest avoiding Target Date funds

DISCLAIMER:

Investment advisory services provided by Regal Investment Advisors LLC, an SEC registered investment adviser. Regal Investment Advisors is independent of Fortress Mega, LLC. Advisory services are only offered to clients or prospective clients where Regal and its representatives are properly licensed or exempt from licensure. SEC registration does not imply a certain level of skill or training. The information presented is general in nature and should not be considered to be investment, legal, tax, accounting, consulting, or any other professional advice. It is not a solicitation of, or an offer to buy or sell, any securities or advisory services. The purpose of the information presented on this website is to educate and inform. The content is developed from sources believed to be providing accurate information. In all cases, you should consult with a professional familiar with your particular situation for guidance concerning specific financial matters before making any decisions.

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