How to grow my networth?
30, single with TC of $175K. Base Salary $132K. HCOL Investments/RSU $75K Cash $15k Student loan $20K balance Credit cards $10K How do I grow my net-worth? Do I use all my cash to pay off credit cards? Or do I put all in stock market? Is it wise to cash out RSU/Investment and put all as down payment for a house? Am I too poor to own a house? What do you suggest?
Pay off credit cards first. Interest rates would otherwise counteract investment gains.
You need start with the basics. - Pay off high interest credit cards - Create emergency fund of six months - Tackle student loans In parallel you keep investing in the market as well with whatever is left over. Read about the snowball method.
Pay off credit card immediately, and always pay credit card on time. Student loan depends on interest rate, if it’s 6 or less % then do not pay. Live within 50% of your take home pay and invest rest. (20% in qqq, fcld or similar etfs, 20% on individual stocks and 10% risky bets) Increase your income. Btw- Happiness and health is most important priority that too
Immediately pay off cc debt. Only use cc for what you can pay before interest hits.
Probably best to take care of those debts before putting a considerable amount into the market. From there you should also have a good net worth tracker that isn’t a spreadsheet or a budgeting app lol. I’m a fan of Roi, been using them since their beta. Works with all my brokerages. Invest, and invest often. Don’t have to be a day trader or anything. But DCA’ing into the S&P through various index funds/ETFs will do the trick. If you’re in a rush to buy a house, might not be a horrible idea to use your RSUs (of course after you’ve got rid of those debts). But if you don’t need to buy a house right away, continue saving/investing so you don’t have to deal with the crazy interest rates. Caveat to that is if you can make those high interest rate payments now, you can refinance when/if rates drop.
In order, I would: 1. Pay off credit card debt 2. Sell some stocks to have 6 months of living expenses in a high yield savings account. You want to limit a single stock exposure anyway so RSUs shouldn’t be kept long unless you have a lot of other investments 3. If your student loan interest is over 5% pay the balance by selling stocks 4. Limit your expenses and always save 30% of your income minimum in a balanced portfolio (S&P500 index fund + REIT for example). I would suggest 10% goes to your 401k, 5% in IRA (backdoor Roth) and 15% in brokerage account. 5. You likely shouldn’t buy a house quite yet if in HCOL area but it depends what you are looking to buy. A duplex where you live in half and rent the other is probably a better idea than a $1M single family home 6. Figure out how to increase your income. Job hoping, raise, promotion, side hustle… and don’t spend more when you make more 7. In 10 years you’ll be sitting on a comfortable nest egg!
Thank you so much. I’m paying the credit cards right away.
Seattle real estate agent, would love to chat! Everyone’s situation is different so it depends on yours and your goals. The answer is not always to buy a house.
I would like to buy a house!
Sent you a dm!