Day 1: Getting Started
Welcome to YMP's Personal Finance 101 Series.
We’re glad you’re here.
We believe that you only need to get a few key steps right in order to master personal finance. So much jargon is unnecessary and distracting. We know your time and patience is limited, so we’ve chosen the most important steps to get you financially stable.
Our Money Philosophy
Personal finance is (of course) personal. We will not tell you what to spend your money on. Instead, we provide structure and guidelines for how to get the most out of your money. That way, you can stretch your dollar further and feel confident in your money situation.
Step 1: Save Your Hard-Earned Money
- Pay yourself first. Automate your savings. Transfer your target savings amount into either an Individual Retirement (IRA) or high yield savings account and aim to have enough for 3-6 month of expenses in an emergency fund.
- Pay off high interest debt. The faster you pay off high-interest debt, the earlier you can re-focus on building wealth and creating passive income.
- Budget your money priorities. Reflect on what you truly value and cut out expenses that are less important. We recommend the 50/30/20 rule for budgeting.
Step 2: Invest to Grow Wealth Faster
- Max out your IRA and 401(k). Make the most of your tax-advantaged retirement accounts such as a government IRA or company 401(k) first.
- Diversify your portfolio. Start investing in diversified index funds such as the S&P 500 Index. Index funds are ideal for beginners because they are passive, low-fee and lower-risk.
- Learn about different investment types. As you get more comfortable, you can better understand your options and the broader investing market. Stocks 101 | Bonds 101
Book Recommendations 📖
- I Will Teach You to Be Rich by Ramit Sethi - Sethi is a practical and savvy expert who shares tangible, no-nonsense tips. We like this book’s focus on simple priorities and “money dials” that are personalized to your own lifestyle.
- The Simple Path to Wealth by J.L. Collins - JL Collins has a simple, beginner-friendly approach to managing money.
- The Little Book That Beats the Market by Joel Greenblatt - Greenblatt is a well-known value investor and hedge fund manager. This is a simplified version of his full investing book, one of our favorites for active investing.
Digital Resources We Love 💻
- Nerdwallet: Compare the best high yield / investing accounts and credit cards.
- The Balance: Relevant personal finance news and tips
- Investopedia: Look up any terms you come across and learn more about active investing
- Paula Pant’s Podcast: Money questions discussed via conversation
- The Internet: We encourage you to Google any questions you may have!