1. Pay off all toxic debt (credit cards, high interest rates).
2. NEVER carry a balance on a credit card month to month. This is called "paying the stupid tax".
3. Build an emergency fund of 6-12 months of *expenses* and keep it liquid, such as in a High Yield Savings Account (HYSA) or Money Market Fund (MMF)
4. Contribute to your 401k up to the company match maximum.
5. Contribute to an HSA if offered up to the maximum allowed.
6. If your 401k plan allows, contribute to a Mega Backdoor Roth. https://thecollegeinvestor.com/17561/understanding-the-mega-backdoor-roth-ira
7. If you do not have access to a Mega Backdoor Roth through your 401k, contribute to a ROTH IRA (unless income ineligible, then use Backdoor Roth IRA method. https://thecollegeinvestor.com/38006/how-to-do-a-backdoor-roth-ira
8. Go back and finish contributing to the 401k plan, up to the maximum limit ($23,000 in 2024).
9. If offered a Company Stock plan (ESPP/ESOP) that gives you shares at a discount, AND you can sell immediately upon stock purchase, contribute the maximum amount to this program and sell each time. You should participate in this regardless of any choices or order of operations above. This runs in parallel to everything else.
10. Open a taxable brokerage account and begin investing here, and/or real estate, and/or side business.
11. Consider funding children's college in 529 plans or taxable brokerage account, or other state advantaged options.
12. Limit the amount of vehicle debt you carry, as vehicles can be one of the biggest barriers to building wealth as people believe they derive "happiness" from getting new vehicles often.
Invest all of these in a low fee Total US Equities Market index fund (if offered) or an S&P500 index fund, to start.
DONT TOUCH it. Just be steady and don't change, be careful who you listen to, and don't make emotion based moves into cash because what you just "know", likely is not so.
Recommended reading:
https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926https://www.amazon.com/dp/1119847672?tag=arfcom00-20https://www.amazon.com/Richest-Man-Babylon-Original-Classics/dp/B0C1J5ML66https://www.amazon.com/The-Millionaire-Next-Door-audiobook/dp/B0000547HR