This has to be the most simple financial advice I have come across in a long while. By Scott Adams:
- Make a will
- Pay off your credit cards
- Get term life insurance if you have a family to support
- Fund your 401k to the maximum
- Fund your IRA to the maximum
- Buy a house if you want to live in a house and can afford it
- Put six months worth of expenses in a money-market account
- Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement
- If any of this confuses you, or you have something special going on (retirement, college planning, tax issues), hire a fee-based financial planner, not one who charges a percentage of your portfolio
If I had to add to add something from an Indian POV to the above –
- By a small piece of real estate in India. Comparing population to area, land will always appreciate there.
- Don’t buy a fancy german car before buying a house. The market is cheaper now to buy a house than an expensive car.
- Don’t travel to places where you will have to take your kids or parents alone or with your spouse. You will have to do it again and it will be expensive. Rule out Europe, LA, Orlando or DC.
- If you still have something left over, buy a vacation door/cabin in Tahoe or LA or Hawaii. They are at the rock bottom now and rent is always more than mortgage.
- My only don’t: Stay away from a house in US till you know you will settle here. The closing and selling costs are not what you think they are.