‍

How Much Should I Invest To Be Financially Free?

‍

The short answer? 

‍It depends on what that means to YOU specifically but in the general sense, here's a couple of ways to get you on track:

• Save at least 10-20 % of your income (more if you can).
• Start a side hustle, more income = more money to save.

‍

The longer answer: 

‍If you're new to investing, you might be wondering how much money you should put aside or even if you have enough. It's true that you don't need to start investing until you have hundreds of thousands of dollars on hand. Depending on your demographics and tax rate, investing may seem different. Taking stock of your particular financial circumstances and coming up with an investment plan that works for you and your spending limit are the first steps in figuring out how much you should be investing.

‍

‍Read more:11 Financial Mistakes to Avoid In Your 20s

‍

‍

How Much Should You Start Investing? 

Generally speaking, you should invest a predetermined portion of your after-tax income. However, that proportion may change based on your income, savings, and debts. The ideal amount to invest is between 10% and 20% of your after-tax income, or even more if you can. It's okay if you need to start small and progress toward that objective. The most crucial aspect is that you actually begin.

This is taken into account by some budgeting techniques, such as the 50/30/20 budgeting method, which divides your monthly budget into three sections: needs (50%), wants (30%), and the remaining 20% for debt repayment, savings, and investments. Some people may not be able to invest 10% of their monthly income, but that shouldn't be a reason for not investing at all. 

For instance, Acorns allows you to start investing with just $5! When investing, it matters less how much money you put in than how long it will take for your money to grow or compound. If you are ready to dive into the world of investing, the team at Vincere Wealth management can help! Speak with an advisor today!

‍

It all comes down to weighing your financial priorities. 

Starting with immediate cash requirements, such as making significant purchases or setting up an emergency fund, the focus shifts to analyzing cash flow or extra funds that can be invested in comparison to what would be required to meet one's financial objectives, like retiring at a specific age.

If saving 15% of your income sounds like it might be too much for your budget to handle, you can start with a fixed amount and stick to it. If you have the appropriate investment strategy, you could be able to see a return on an investment of just a few dollars per month.

‍

‍Vincere Wealth Management's team can develop a plan that is tailored to your requirements.   This is not something you have to work out on your own.

‍

Think about how your finances are doing right now. Before deciding how much you wish to save, take into account the following factors:

‍

• Your current payslip: Analyze your monthly income carefully and think about how much cash you have left over after paying your non-negotiable expenses. If you're having trouble making ends meet, you might choose to put extra money first toward paying off debt or an emergency savings account.

‍

• Review your debt balances: If you don't have a plan in place to pay those balances down, debt, especially high-interest debt, can become very tough to manage. Look at the balance you owe and the associated interest rates. Find the investment amount that will allow you to live comfortably while still making the required debt payments. You can review your monthly investment amount as you reduce your debt and adjust it as necessary.

‍

• Your emergency fund: When something unexpected strikes, having an emergency fund is essential if you want to avoid going into debt. Consider investing a lesser portion of your current income while you seek to reach that benchmark if you're still trying to accumulate three to six months' worth (suggested emergency fund amount) of necessary costs.

‍

Relatable: When Is Your Cost of Living Too High?

‍

Start Investing by Deciding What Your Investment Objectives Are

Your ability to assess whether you're investing in the correct quantity, at the right time, and in the right mix of assets depends on the clarity of your investment goals. It can assist you in establishing a timeline for yourself, provide you with a starting point for how much you need to start investing, and explain how that will affect your monthly or annual budget. For example, some questions that you should be asking yourself are:

‍

1. What you're investing for

Maybe you're saving for retirement, maybe you want to buy a house or pay for your kid's college. Deciding on your ultimate objective might help you establish a reasonable timetable for achieving it and make it simpler to decide how aggressively you should be investing to bring those ambitions into reality.

‍

2. Your level of risk tolerance

Investing always carries a certain amount of risk, regardless of the type of asset you choose. Evaluate your comfort level with taking on that risk. Beginner investors should carefully consider the variety of investments they want to include in their portfolio because diversification is beneficial. Investments that are often high risk/high reward offer increased volatility for investors, such as cryptocurrencies or growth-oriented stocks. Treasury bonds, money market funds, and "blue chip" stocks that pay dividends to investors are generally safer investments for people wishing to assume less risk in their portfolios.

‍

3. What your timeline will look like

Depending on what your aim is, your timeline will appear different. Depending on when you start saving, you may have decades to invest and increase your retirement fund if your ultimate objective is retirement. You have the option to begin modestly and increase those payments progressively as your income rises over time. If you're investing for a shorter-term objective, such as buying a home or retiring early, this timetable can look different.

‍

Relatable: How to Prioritize Your Financial Goals

‍

‍Note: Be aware that your investment plan may vary over time and probably will. To make sure that the amount you're investing each month still feels appropriate, it's crucial to routinely check in with your financial advisor and your budget. If your income increases, you might choose to invest more; alternatively, if you've lately faced some form of financial hardship, you might want to put a stop to adding to your investment account.

‍

‍

‍

‍

GROW Your Wealth in 2023 with Help From The Pros!

With the help of a fiduciary financial advisor to help guide your decisions, you stand a much better chance of retiring comfortably—and maximizing your sources of income so you can live the life you want. Contact Vincere Wealth to start today.

‍

I hope this was helpful!

‍

‍