The first step in achieving Financial Zen is getting your house in order.
Part of that is just getting your money in the right places, doing the right things.
Here’s what that should look like. (It’s simpler than you think.)
EMERGENCY FUND: 6 months of living expenses in cash
SHORT-TERM BUCKET: Buy bonds for short-term goals (<10 years). Match the bond maturity to the time horizon of your goal.
LONG-TERM BUCKET: Everything else should be in your long-term portfolio in a well-diversified (aka boring) ETF portfolio. (A robo-advisor like Betterment or Wealthfront or Financial Zen will do the diversifying and rebalancing and tax loss harvesting for you automatically).
FUNNY MONEY BUCKET: If you love speculating on stocks, crypto, etc do it with less than 10% of your liquid assets and do it a Roth IRA if you can.
And that’s it folks!
We like simple at Financial Zen.
