Berkshire Hathaway Inc. (NYSE:BRK.A): Four Smart Money Moves for the Newly Employed

Page 1 of 2

So you managed to get a job in this tough economy. Congratulations. It couldn’t have been easy.

According to government statistics, the U.S. has added an average of 172,000 jobs per month for the last year. That’s a big improvement from the recession lows, but it’s nowhere near the 300,000 job gains that we saw during many months of the ’90s boom years.

Berkshire Hathaway Inc.

Now that you’ve made it into today’s slowly growing workforce, though, it’s time to put your money to work, too. Here are four financial tips that will help you make the most out of the new stream of paychecks headed your way.

1. Pay off credit cards
Priority No. 1 is to attack those card balances with a vengeance. This is textbook financial advice for a good reason: Credit cards come with some of the highest interest rates around. Banks are handing out car loans at 2.5% these days, and mortgages are still going for less than 5%. But credit cards average a whopping 15% annual charge. Pay off those balances now, and nab the easiest guaranteed 15% return you’ll ever see.

2. Build a cash cushion
The next step is to bulk up your emergency reserves. What Berkshire Hathaway Inc. (NYSE:BRK.A) CEO and famed investor Warren Buffett calls “redundant liquidity,” we non-billionaires refer to as a “rainy day fund.”

This cash cushion is the stash of at least three to six months of living expenses that will be ready in case of an unexpected loss of income. And having a solid reserve will help you deal with those expensive surprises that can pop up — without taking on costly credit card debt.

3. Sign up for automatic retirement contributions
Many employers offer 401(k) retirement plans with a matching bonus, meaning that they will pay into your account a certain percentage of what you elect to contribute. That’s called free money, and you should take advantage of it by contributing at least up to the maximum matching percentage.

However, even if your company doesn’t offer a matching bonus, be sure to sign up for automatic retirement contributions anyway. You’ll get used to living below your means that way, and you’ll give your money the longest amount of time possible to grow before retirement.

4. Invest in the stock market
Yes, the stock market isn’t everyone’s favorite place right now. While retail investors have tiptoed back in lately, many — having lived through the 2008 financial crisis and the 2000 tech bubble pop — have done so only reluctantly. Still, even with huge dips like those the stock market offers by far the best potential for long-term returns. Consider adding to your retirement savings first by purchasing a diversified whole market fund, like one of these.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!