Before investing, try this

Before you put money into stocks, ETFs, REITs, or

Before you put money into stocks, ETFs, REITs, or anything like Vanguard funds, you should build a financial foundation first.

Here’s what matters most:

Emergency Fund (Non-Negotiable)

This is your #1 priority before investing.

How much?

• 3–6 months of essential expenses
• If income is unstable ? 6–12 months

Since you’re a W2 employee and your wife is 1099 (contractor income can fluctuate), I would lean toward 6 months minimum.

Where to keep it?

• High-Yield Savings Account (HYSA)
• Money Market Account
• Very safe and liquid (no stock market)

Why this matters: If you lose your job or your wife has a slow month, you don’t want to sell investments at a loss.

Short-Term Savings (0–3 Years)

If you plan to:

• Buy a house
• Buy a car
• Start a business
• Pay taxes (especially important for 1099 income)

This money should NOT be invested in the stock market.

Keep it in:

• HYSA
• CDs
• Treasury Bills

Stock market = long-term only (5+ years).

High-Interest Debt Paid Off

Before investing, eliminate:

• Credit cards (18–25% interest ??)
• Personal loans
• High-interest car loans

If you’re paying 22% interest, investing for 8–10% returns makes no sense.

Insurance Protection

Before building wealth, protect what you have:

• Health insurance
• Term life insurance (especially with 2 kids)
• Disability insurance
• Umbrella policy (optional but smart as wealth grows)

You’re building a financial structure — insurance is the foundation.

Retirement Account Match (Free Money)

If your employer offers 401(k) match:

Contribute at least enough to get the full match.

That’s a guaranteed 100% return on that portion.

Tax Planning Buffer (Important for You)

Since your wife is 1099:

• Save 25–30% of her income for taxes
• Keep it separate in a dedicated savings account

Avoid IRS surprises.

Ideal Order (Simple Roadmap)

1. Emergency fund (6 months)
2. Get employer match
3. Pay off high-interest debt
4. Build tax buffer
5. Then start investing seriously

After That… Then Invest

Once your base is strong, you can invest in:

• Broad ETFs like Vanguard S&P 500 ETF
• Dividend stocks like Coca-Cola
• REITs like Realty Income
• Or diversified portfolios

The Big Mistake People Make

They invest first… Then life happens… Then they sell investments at a loss.

Wealthy people build stability first, then growth.

Try to check:

• Your monthly expenses...
• Current savings...
• Debt (if any)...