Sequential Investing Hierarchy – Secure

The next foundational step is “secure.” This step comes after households have started saving for major, short-term purchases and worked this amount into their monthly cash flow plan. Once this has been achieved, it’s time to start attacking long-term goals. These are big-ticket items such as retirement, college, or major lifestyle changes down the road.

When saving for long-term goals, it’s critical to focus on maintaining a long-term approach. Investing is often needed to meet long-term goals, meaning that risk is involved and that accounts will fluctuate in value. It’s important to maintain the proper amount of risk and diversification over a long-term time frame – this is what leads to investing success! Make sure to check out one of our recent blogs for more investing information: 11 Biblical Principles for Investing (

As a general rule-of-thumb, aiming to have 15% of your gross income directed to long-term savings is recommended. The earlier you can start, the better! Compound interest is the eighth wonder of the world, but you need time for this to truly take effect.

Pro-tip: Consider making Roth contributions in your retirement accounts. Unlike pre-tax retirement accounts, there is no tax deduction when the contribution is made. However, Roth funds grow tax-free as long as the earnings are withdrawn after age 59 and ½. Having tax-free assets down the road can be a game-changer!

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