My best friend asked me once for some financial advice on how to invest and save a lot of money.
So I emailed him this.
It’s super simple and very easy for beginners of any income level.
Financial Plan (Template)
Here’s how I started to save money and invest with a hands off approach.
Step 1
Step 1 is so easy and so simple.
Start saving a specific amount of money from each paycheck.
Set an amount of money you need to absolutely save each month. Money you’ll never need to access for 12 months. This is your emergency fund. Even $100 a paycheck is a great start.
- I highly recommend you open up a savings account through Discover.
- This is where you’ll keep your monthly savings money.
Step 2
Only when you have $500 to invest, open a Wealthfront account to track all your finances and build a plan.
You don’t necessarily have to use their brokerage service. It’s just a good site to get an overall picture of your financials.
- Sign up using this link: (https://www.wealthfront.com/c/affiliates/invited/AFFD-YHJK-GWG6-R8X8)
- Select the “open a Wealthfront account” option and go through all the options.
- Once your account if finalizing, you’ll be able to add some finance info.
- Then just start adding your banks and soon to be Vanguard account to help you set financial goals and to see what your net worth is.
Step 3
Only when you have $3,000 ready to invest, open a Vanguard account.
You probably see all these commercials for Fidelity, Schwab, ETrade, etc but completely disregard those and invest using strictly Vanguard.
- Sign up for Vanguard using this link: https://apps.vanguard.com/web/cf/move-money/welcome
- Select “Open a new account”
- Under “Are you registered on vanguard.com” select NO.
- Click continue after you have all the “things you need”
- Under why you are investing, choose “general savings”
- Then select “individual” and click continue
- Under “primary investment objective: select INCOME and your source of funds is CORPORATE INCOME (or whatever type of income you have).
- Fill in your personal info.
- When you get to the point where it ask if you’re married to a Vanguard employee, select NO for all 3 questions then hit continue. (most of you will select NO)
- Select “Electronic bank” and add all your info.
- For investment amount, I’d start with $100.
- Then continue through the application until you can sign up for web access.
- Then you’ll be given future steps from Vanguard.
In a few days after your Vanguard account is set up and you’re able to access it online, you’ll be able to start buying index funds.
Not sure if you know what they are but basically an index fund is one individual stock that is a combination of hundreds of other stocks.
So lets say you like tech. You choose a tech index fund and within it you’ll have small shares of Facebook, Netflix, Apple, Amazon, etc. So if you buy $1 of that tech fund, you now own a small percentage of all those companies.
Here are the Vanguard funds you should invest in. It’s literally one fund.
- VTSAX
This is called the total market fund which means that every single stock that is available is included in this fund.
You’re literally investing in the entire stock market.
And that’s it…
So simple.
So easy.
The hardest part is setting aside 8 minutes to open up a high yield savings account. And even that part is so easy.
…
NOT FINANCIAL ADVICE.
Affiliate Disclosure: Some of the links are affiliate links meaning that I’ll earn a small commission for each sale/sign-up at no extra cost to you. This literally helps me pay for my mortgage payments and other monthly expenses.