The Strategy For Paying Off Debts and Building Wealth

Generalizing What We've Learned

As we saw when we put it all together, once you can assign a rate of return to your liabilities and assets, and take into account certainty, as well as your own specific goals, you can start to see how to approach your specific situation and build your wealth over time.

What we can do with these tools, is create a general purpose strategy that you can start with, to pay your debts and build wealth for retirement and whatever other goals you have!

A Flowchart

Check it out below, this is a general approach we feel good about, that you could use to find the best purpose for your extra savings each month. It should make sense, given what we discussed before.

Flowchart about strategy for paying off debts and building wealth
Flowchart about strategy for paying off debts and building wealth

Beyond The Flowchart

Once you've reached the bottom of the flowchart, you probably only have long term low/medium debt left. After this, you can start to think about how you would invest your savings to grow them, such as in stocks and bonds. Congrats, you're well on your way to your long term goals!

This is the end of the introductory articles! By now you should be feeling pretty good about how to handle your money. If you're ready, please consider moving on to more advanced topics, such as retirement or financial independence. Thanks for reading!

Putting It All TogetherNext Topic: Retirement