You have already pledged to start on the road to physical fitness in the New Year. Congratulations and good luck! But have you considered your “Fiscal Fitness?” It is an equally beneficial exercise,no pun intended! You may ask, “how do I get started?”

January 19, 2022 – Below, I have offered what I call the “FIVE FUNDAMENTALS OF FISCAL FITNESS”:

1. Pay Yourself First – Savings and Retirement: Save at least 10% of your annual income, including retirement savings. Begin by saving a liquid cash reserve. Once you have achieved sufficient liquidity, direct savings toward balancing and building your portfolio. Take advantage of tax-deferred savings plans, especially if your employer matches contributions.
2. Have Sufficient Liquidity: Most wage earners should have 10% of their annual income in a primary cash reserve and another 20% in a secondary reserve. Self-employed and retired individuals should build their cash reserves to an even greater level.
3. Pay Off All Credit Cards and Consumer Debt: Learn the difference between bad debt, good debt, and acceptable debt. ( https://rscapital.com/2021/10/13/the-wisdom-of-borrowing/ ) Avoid the bad, use the acceptable wisely, and take advantage of the leveraging power of good debt.
4. Own the Right Sized Home: For most Americans, their home is the most significant financial investment they will ever make. Buy a home worth 2 or 2-1/2 times your annual income – 3 or 3-1/2 times in hot markets – with a mortgage of 50% or more of its value. 
5. Invest in Your Career: For many individuals, the biggest asset in their portfolio is their human capital – i.e. their ability to use their skills, experience, and talent to earn income throughout their lifetime. Continue to invest in your human capital to enhance your earning potential.