DR-Financial-Fitness-Framework

7 Steps to Financial Fitness

Step-1. Create Emergency Fund

  • with least possible recurring amount

Step-2. Payoff Credit Card Debt

Step-3. Grow your emergency fund

  • To meet 6 months of living expenses

Step-4. Invest in Retirement Fund

  • Invest 5% in Roth IRA

  • Invest 5% in 401k

  • Invest 5% in mutual funds or Work sponsored tax deferred investment plan

Step-5 Invest in Kids College fund

  • Use either 529 or

  • Use Education Savings Account

Step-6 Settle The Home Mortgage

Step-7 Share With Others

  • share with your parents/wife or

  • donate the money

Points to Remember

  1. Avoid Debt at all costs

  2. Don't Borrow to invest in stocks

  3. Use minimum necessary period for mortgages [Signup for 15 instead of 30 years]

  4. Choose mutual funds that have win rate above market average for 5-10 years and Invest

  • 25% in Blue Chip Fund

  • 25% in Growth Equity Fund

  • 25% in Aggressive Growth Fund

  • 25% in International Funds

Surround Yourself With

  1. Tax Planners

  2. Estate Planners

  3. Financial Advisors

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