Personal Finance Framework

Written By Alex Kelley

Some of the most essential personal finance advice could be summarized in just a few main points:

  • Live on less than you make. In other words, spend less than your income

  • Take full advantage of any employer matching retirement contributions at work

  • Invest in broadly diversified, low cost, market capitalization weighted index funds at constant and regular intervals

  • Have a long-term time horizon for investing. Do not panic sell when the market gets scary

  • Set aside a portion of your savings in a rainy day emergency fund. This amount should be set aside in cash

  • Do not try to actively pick single stocks or time the market

  • If you have money leftover after maximizing matching contributions in your workplace retirement, consider utilizing other tax advantaged retirement accounts such as an IRA

  • Learn the basics of income taxation in the United States. Taxes will likely be your first or second largest expense throughout your lifetime

Alex Kelley