The fifth and last phase in our financial freedom plan is to “Put your money to work”. Here is where the fun begins. Now you can build up piles of cash for investments. To build those accounts use the money you were putting towards your debts and emergency fund in phases three and four.
The following must be maintained to stay on the road to financial freedom:
1. Stay debt-free.
2. Accelerate paying off your mortgage to at least 15 years or less.
3. Maintain at least 15% of household income towards retirement, a fully funded emergency fund, and adequate term life insurance, if needed.
4. Pay cash for everything (except possibly real estate, an appreciating asset).
5. Diversify your investments.
Always keep in mind that you MUST fully understand the investment BEFORE you invest in it. Relying on someone else to “manage” your investments can lead to disappointment and frustration. So be sure that you have a complete understanding of all the risks before investing. Always remember no risk, no reward.
Please list some investment options in the comments that should be investigated.