Do-it-yourself or DIY investing has never been easier. If you have access to the internet and aren’t afraid of technology, then you’ve got a chance to earn money on your savings like the 1% (buzz word for the super wealthy). In this multi-part series I’m going to show you how to invest in stocks, bonds, and index funds the easy way so that you can get your money earning more money. Here’s what you need to know before you start DIY investing.
1. Get debt free (except your mortgage)
First of all, you need to be out of debt except for a possible mortgage on your house. If you have any debt (credit card, personal loans, student loans), you need to take the money you’ve saved and pay that off first. It’s a guaranteed return on your money. What does that mean? If your credit card interest rate is 14.99%, whatever you pay off on that card, you’re essentially earning 14.99% back by not having to pay that interest. Debt is negative interest on your money. Paying it off is a guaranteed return. Even a 4% guaranteed return is better than trying to cover that debt by earning more in the market. Pay off your debts first.