Get rich slowly (and then get rich quick!)

You're looking to secure yourself for the future, you're starting to earn some money but you don't know where to put it. Time and time again, I have friends who ask me "how do I get started? - and then what?".

I'm going to give you five simple steps (plus one bonus pre-step). Taken and executed in order, these are going to help you get rich slowly to start, and then get you rich more quickly, as you move further on. This is your pathway to personal financial independence.

Step 0 - Make a budget!

You're never going to have any liquid capital available for investment if you're spending more than you're earning. Find your net income, track your spending, set your goals, make a plan and see what you can cut to save more, adjust your habits, and refine, refine, refine.

Step 1 - Set up an emergency fund (3 to 6 months)

The start needs to be gradual. Baby steps to start - don't be macho when you don't need to be. To build a real emergency fund, you're going to need to first determine the amount of liquid capital you need each and every month. Take the money you spend on rent, hydro, water, food, required services, transport, etc. - and add it all up. Now you know how much you need every month to get by. Start your investment journey by saving at least 3-6 months of cash that you would require in case of an emergency, where you were no longer able to work. How many months should you save? That depends on many factors: How precarious is your job? Would you have someone to stay with if you needed to move out of your place? Do you have dependents? Could your family assist financially if you were in need? The more secure you are, the less you'll need to save for this step. I recommend 6 months of emergency funds for anyone who isn't sure.

Step 2 - Invest in your company 401k (if available)

This is not a step for everyone, as you may be working for an employer who does not offer any retirement benefits. For those of you who work for a company that provides you a percentage match on your retirement investments, contribute!!! You're getting FREE money to invest in your own retirement - take it!

Step 3 - Pay off your debt

Prioritize paying off all your debt at this stage. It's amazing how many people I have met who have long-term investments, and are paying off 20+% annualized credit-card interest. Choose the cards or loans you have that have the highest % interest, and pay them off first. Work away at all the debts you have, unless any of them are very, very low in terms of interest rates (for instance, a friend of mine had a University loan that was only 0.25% until a certain number of years after his graduation).

Step 4 - Contribute to Roth IRAs, Traditional IRAs (or equivalent tax-free accounts in your country)

In the USA there is a tax-free saving account called a Roth IRA, in Canada they have two versions, one called a TFSA (Tax Free Savings Account) and another called an RRSP (Registered Retirement Savings Porfolio). Many other countries have similar vehicles that allow you to invest money without being taxed on investment growth. Find these vehicles and make contributions - you're going to get to keep more of your investment growth in these, and less to taxes! These are so key - be careful not to invest in unregistered accounts EVER before these are filled up.

Step 5 - Other investments and savings

The last step is where you can enjoy more freedoms. You've locked down an emergency fund, you've vested money with your employer, you've destroyed your debts and contributed to tax-free savings accounts. Now you can get into the riskier and more open plays. This is where you can invest in unregistered accounts, stocks, index funds, bonds, and yes, of course, cryptocurrencies. Perhaps you want a rainy-day fund, some money set aside for a vacation or your child's education. Maybe you want to purchase a Lamborghini! The sky is the limit at this point, but remember, all your investment earnings here are likely to be taxed in different ways - and that's why it is best to get at the tax-free and beneficial stuff first.

I hope you all enjoyed this short set of steps. I'd love to hear any comments, suggestions or constructive criticism below. Everyone's financial situation is different, but I hope this can be a guide for some of you out there.