Laying A Foundation

Kirk wants to know the building blocks of becoming a good investor, so Dave lays out the basics for him.

QUESTION: Kirk and his wife are in their mid-30s and have $14,000 in debt. They have $40,000 in their 401k plans and have no kids. He wants to know what it takes to become a good investor.

ANSWER: Lay some good bricks in the foundation. Become debt free and then have an emergency fund of three to six months of expenses. When you have those two things, it makes a solid foundation to start building wealth. Most people skip those things and that is like building a house without laying the foundation first. That’s a problem! Make sure to get on a budget, because your debt is a symptom of buying what you can’t afford. Get a game plan for that.