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Does the idea of investing sound about as exciting as Ben Stein’s economics lecture in Ferris Bueller’s Day Off?
If so, here’s a little secret: growing your money can actually be a lot of fun!
To prove it, we’re taking it back to the 80s and assigning theme songs to some of Dave’s best retirement advice. These six lessons will have you bobbing your head as you build a better future.
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Lesson 1: Put Debt Behind You
Theme Song: “I Ran (So Far Away)” by Flock of Seagulls
You’ll never build wealth if debt is eating up every paycheck. So act like a gazelle with a cheetah on your tail and start scooting! Run so far away that you break the gravitational pull of debt and move in a different direction.
Use the debt snowball method to build serious momentum, starting with your smallest debts and working your way up to the largest. The more income you free up now, the more you can put toward your future!
Lesson 2: Send Murphy Packing
Theme Song: “Beat It” by Michael Jackson
Michael Jackson was right: no one wants to be defeated. But saving for retirement with no emergency fund is an open invitation for Murphy to sucker punch your nest egg. Your first unexpected car repair will have you elbow-deep in your 401(k), and that’s a really expensive form of payment!
Follow Dave’s advice and pile up three to six months of expenses before investing for retirement so you can handle life’s mishaps without knocking the wind out of your future.
Lesson 3: Take the Leap
Theme Song: “Jump” by Van Halen
Research shows the key to a confident retirement is simply taking that first step. So what are you waiting for? If you’re out of debt with a fully stocked emergency fund, consider these wise words from David Lee Roth: “Go ahead and jump! You might as well jump! Get in and jump!”
Sound like a broken record? Good. Now here’s how to move the needle: Invest 15% of your household income into tax-advantaged retirement plans, like a Roth IRA or a 401(k). Make the most of your money by choosing good growth stock mutual funds with a long history of strong returns.
Lesson 4: Divide by Four
Theme Song: “Hip to Be Square” by Huey Lewis and the News
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Anytime you have a chance to make money, you also have a chance to lose it. That’s why putting your entire nest egg in a single basket is a terrible idea.
Reduce your risk by spreading your investments around. Dave recommends a square approach. In other words, divide your retirement dollars equally across four types of funds: growth, growth and income, aggressive growth and international.
Lesson 5: Commit
Theme Song: “Never Gonna Give You Up” by Rick Astley
If you really want to win with money, don’t run around and desert your investments at the slightest hint of a downturn. Stick with it for the long term—no matter what the market is doing.
Why? Let’s take the past 20 years as an example. Missing out on the stock market's 10 best-performing days during that time could have cost you tens of thousands of dollars. Saying goodbye to that many zeros is enough to make any commitment-phobe cry!
Lesson 6: Don’t Be a Loner
Theme Song: “It Takes Two” By Rob Base and DJ EZ Rock
Want a future that’s outta sight? Partner with a pro to make it go right. A trustworthy financial advisor can help you calculate your retirement needs—a step that’s proven to lead to higher savings—and outline a plan for reaching your goals. It doesn’t cost a thing to sit down and just look at your options.
Dave’s a seasoned investor, and even he knows the value of an experienced pro when it comes to growing his investments. If you’re looking for advice you can trust, we can put you in touch with an advisor in your area who’s earned Dave’s seal of approval.