By the time your career is in a groove, you’ve probably developed your spending and saving habits. You might also have purchased a home and be paying down a mortgage. For many Americans, these are the highest earning years, and it’s smart to look for ways to get the most out of your investments.
Keep that emergency fund
It’s always a good idea to maintain a rainy-day account that can cover your household expenses for three to six months in case of a job change, major household repair or unexpected medical bills. It prevents you from having to tap your retirement or college savings for emergencies.
Diversify your account
At this stage, you’ll want to start thinking strategically about your finances, and the best first step is to diversify your investments. That means spreading your savings across different types of investments, such as U.S. and international stocks, maybe some small U.S. stocks, some bonds and so on. Diversification does not ensure a profit or protect against loss, but it is a way to help manage investment risk.
Define your priorities
Mid-career individuals often balance multiple investment priorities: their own retirement, children’s college savings and perhaps even helping aging parents. You will want to invest appropriately for each goal.
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Once you’re ready, start here.
The sooner you begin investing, the more time you have to reach your goal.
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