Episode 165: We’re talking about investing, saving, and optimizing large sums of money. We’ll also touch on protecting your investments during the market slump as a result of Coronavirus.
We often talk about what you should do when you get a large lump sum of money, and how you can optimize that experience.
Maximize Your Investments
If possible, use your annual bonus or a large influx of money to get a tax advantage. Max out your 401K or HSA, to save yourself from the tax deduction on your income.
That being said, investing is a scary experience right now due to the market. If you get an influx of money, you might want to keep it on hand. Take a look at your portfolio as a whole and don’t panic— things will turn around.
Do NOT sell your stock at a loss. Now is the time to buy.
Building Your Emergency Fund
These strange days are a great time to review your emergency fund. If possible, set aside some money into an accessible account in the event that a situation arises. The Covid-19 situation has been a prime example of why you should strive to build an emergency fund.
Pay Down Some Debts
If you’re working on becoming debt-free, putting a lump sum toward your debts is a fantastic way to get ahead of your payments.
During these uncertain times, budgeting is more important than ever. Pick up a copy of our 2 Frugal Dudes Personal Finance Journal to start tracking today.
Disclaimer: Kevin and Sean are not professional financial advisors. Do not take any advice they give without first speaking with a professional and performing your own due diligence.This post may include affiliate links.