Use the Ladder Method to Make Investing Simpler

So you know it’s time start investing, but you’re not sure where to get started.

There’s your retirement, of course, but there are a few different retirement investing options.

Plus, what if you want to simply invest outside of retirement?

Sethi describes the “ladder of personal finance,” outlining five rungs to investing.

If you might’t get to number 5, don’t worry.

Rung 1: Take full advantage of youremployer’s 401(k) match, if offered.

It’s free money.

Rung 2: Pay off your credit card and other debt.

Rung 3: Open a Roth IRA and contribute as much as you could to it.

Read ourbeginner’s guide to IRAsfor more info on Roths.

Rung 5: Still have money to invest after maxingthatout?

Open a regular non-retirement account and invest it there.

Of course, your situation might vary.

For more info on those breaks, check out our post on howinvesting affects your taxes.

I WIll Teach You To Be Rich| Ramit Sethi

Photo byJohan Hansson.