Asset Allocation by Time
| Emergency Fund | A stash of money set aside to cover the financial surprises life throws your way. These unexpected events can be stressful and costly. Here are some of the top emergencies people face: Job loss. Medical or dental emergency.
Strategy: High Yield Savings Accounts (Liquid). Floating rate based on Federal Reserve Rate. |
| Short Term | Establish a budget; combine the information from all your accounts into one place so you can label each expense by category.
Pay off debt to reduce and eliminate high interest payments to other institutions. Strategy: U.S. Treasury Bills, Notes or Bonds, Municipal Bonds, Certificate of Deposit (Term duration 3, 6, 9, 12-months, 2 to 5 years). Rates locked based on term. |
| Intermediate Term | Brokerage Account
Strategy: Acquire income-generating assets. Liquid Assets: Stocks, ETFs, Mutual Funds, Index Funds, Sector Funds, Commodities, Crypto currencies. Hard Assets: Real estate, Precious Metals, Businesses, Land. |
| Long Term | 401k/Roth 401k (min contribute up to the company match or max. contribution $23,000 per individual in 2024). Age 50 or over, $7,500 catch-up contribution.
Health Savings Account (max. contribution $4,150 per individual in 2024). Employee contributes $2,750, Employer contributes $1,400. IRA/Roth IRA (max. contribution $7,000 per individual in 2024). Age 50 or over $1,000 catch-up contribution. Strategy: Growth, Value (Income), Blend |