You’ve finally pulled the trigger, selling a chunk of your company stock and leaving you with a pile of cash sitting in your brokerage account. What now? Now you have a pile of cash and need to know what to do with it. Let’s talk about that.
Running on autopilot can be dangerous. If a pilot’s course is off by 1 degree traveling from San Francisco to New York, they will end up 40 miles out in the Pacific Ocean. Likewise, if you don’t recalibrate your financial autopilot settings, you’ll miss your destination of financial security.
Some people are concerned about spending their extra cash, while others are concerned that they’re not investing it. In either case, this situation can easily be avoided through a simple process that makes your cash work for you.
Having more income than you spend feels good, yet it’s crucial for us to recognize that this is, in fact, necessary. If you ever want to spend any time without income in your life – whether it’s retirement, a sabbatical, or whatever – then you must earn more than you spend.
So, you want to live comfortably in your future years and you’re not so sure it’s going to happen. What to do? The best step is to maximize your savings. If you’re not already putting the most you can into your retirement accounts, consider starting now.
Your Savings Target is the amount you want in savings so by definition, anything above this amount should be invested in your Long-Term Portfolio.