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Growing your wealthbegins with your paychecks.
Personal finance expert Vincent Chan laid out exactly what he does after he gets a paycheck.
In anInstagram reel, he explains his steps to ensure hismoney goes to wealth building.
Chan recommended setting money aside until youve had at least three to six months in expenses.
These debts generally accrue 7% interest or more, such as credit cards or personal loans.
To effectively deal with these debts, Chan endorsed the avalanche method of debt payment.
For this strategy, you pay the debt with the highest interest first.
Once youve finished paying that debt, move on to the one with the next highest interest.
By settling the debts with higher interest first, youll pay less overall interest.
In many instances, employers will match your contribution up to a point.
HSAs provide triple tax benefits.
The funds in your HSA can grow over time without incurring tax penalties.
And finally, you’ve got the option to withdraw tax-free funds forqualified medical expensesaccording to HSA Central.
Maxing out your HSA will help protect you against future health expenses.
Unlike a 401(k), contributions to a Roth IRA are made with after-tax money.
Maxing out your 401(k) provides extra opportunities to live comfortably in retirement.
Two of the funds that he said he uses are FXAIX and VOO.
Pay Off Your Remaining Debt
Finally, you could put any extra money toward low-interest debt.
Another payment strategy is the snowball method.
For this method, you target the smallest debt first.
Once its gone, you target the next smallest.
This will give you a sense of momentum and propel you to get out of debt faster.
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