The All at once strategy:
To start, understand that in a GIG economy, there is no set monthly income, so you have to think of what you bring home differently than would a salaried employee. Too many experts and coaches want you to focus on tackling one financial goal at a time, but you are living in an era where everything is happening to you all at once. A step by step approach is the old way. Today you need to tweak that a bit by focusing on how you can start to make steps towards each goal, while addressing the smallest ones as fast as possible. In this strategy every step is step 1 because you can actually start on them all at the same time and complete them in whatever order works best for you.
Step 1: Building the emergency funds
If you have trouble saving for the emergency fund, supplement it by micro investing with your extra dollars, channel your extra money into saving a starter emergency fund, and then building a bigger emergency fund to cover 3-6 months of expenses.
Why is having a healthy emergency fund so important? Consider this: 69% of Americans have less than $1,000 in savings according to the latest news reports. Surprise expenses, like a car repair or a broken water heater, happen to all of us. Having an emergency fund means that you can cover those emergencies without having to dip into your investments or go into debt.
Step 1: Retirement – types of retirement saving accounts
It is recommended to consistently invest at least 15% of your income toward retirement savings. Here’s how to get started when you don't have a company plan and match to rely on:
Build your own Retirement plan. You have lots of options so spend time to review them all. Some have things that will be important to you later so make sure to always consider the future as you work through these options.
1. Simple IRA
2. SEP IRA
3. individual 401K (Traditional or Roth)
Step 1: Keep a Long-Term Perspective
Micro investing is great way to sprint for short term savings and hit your goals, but if you want to finish the race you will need to turn the sprint into a marathon. The key to investing is to have strong diversification across multiple asset classes. Protecting your investment by not allowing any one area of the market to drag you down to far is vital to building for the future and keeping you in the race. Add some investments outside of the stock market, Asset backed investments like real estate are a perfect fit for this.