I Will Teach You to Be Rich
’m always surprised by the e-mails I get rom people who haveoptimized every part o their investing strategy and are nonetheless
looking or more ways they can optimize their nances. It’s easy: Just ask people ve to ten years older than you what they
they hadstarted earlier, then do that. You’ll get three answers right o the bat:
CReate an eMeRgenCy fund.
An emergency und is simplyanother savings goal that is a way to protect against job loss, dis-ability, or simple bad luck. Most people in their twenties don’t needemergency unds because we can just borrow money rom our othersavings goals or, worst case, go home to Mom and Dad. But i youhave a mortgage or you need to provide or your amily, an emer-gency und is a critical piece o being nancially secure. To createone, just set up an extra savings goal and then unnel money to itin the same way you would your other goals. Eventually, your emer-gency und should contain six months o spending money (whichincludes
your mortgage, other loans, ood, transportation,taxes, gits, and anything else you would conceivably spend on).
As you get older and more crotchety, you’ll wantmore and more types o insurance to protect yoursel rom loss. Thisincludes home-owner insurance (re, food, and earthquake) and lieinsurance. I you own a home, you need insurance, but young, singlepeople don’t need lie insurance. First o all, statistically, we hardlyever die, and the insurance payout is useul only or people whodepend on your livelihood, like your spouse and kids. Beyond that,insurance is really out o the scope o this book, but i you’re trulyinterested, I encourage you talk to your parents and their riends,and search or “lie insurance” online to research the various options. You probably don’t need to buy a bunch o insurance options rightnow, but you can certainly set up a savings goal so when you
needthem, you’ll have money to use. One last thing: Insurance is almost
financial otins rSuer-Achievers: Make theTen-Year plan That few others d