(MoneyHippo.com) – Living paycheck to paycheck without adequate savings can lead people to reach for credit cards in times of emergency, resulting in treading water financially with no end in sight. Fortunately, there are ways you can arrange your money to prepare yourself for emergencies and even retirement. Let’s examine seven assets you can start today to help you unlock financial freedom.
- Emergency Fund – First, start putting money aside for emergencies and don’t touch it unless it’s truly urgent. Generally, you want to build up the amount to cover at least a few months of expenses.
- Personal Development – Speaking of savings, open an account to save for improving your personal equity. This money will be exclusively for advancing your education or attending a conference for self-improvement. Build and develop yourself.
- Retirement – Next, set up a Roth IRA to ensure you have a nest egg when retirement comes.
- Tax Shelter – Eventually, you want to work toward creating a self-directed 401(k) once you outgrow the Roth IRA. You can set up funds like the Roth IRA or a self-directed 401 (k) through a reputable financial firm like T. Rowe Price.
- Growth – You also should start investing in the stock market or mutual funds so your money can grow with little involvement. Still, this activity can be a learning and growth opportunity where you use small amounts of capital to dabble in different stocks and investments, like cryptocurrency.
- Diversity – Along the same vein, acquire or create an income-producing asset like a rental property or a course that earns passive income.
- Protection – Finally, protect your assets by insuring them through life, health, home, or auto insurance. As your assets grow, so should your protection.
By creating these assets and protecting them, you could be on your way to achieving your financial goals.
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