Financial Planner Q&A: How Do You Invest Your Own Money?

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We’ve got another edition of Financial Planner Q&A, and today’s question from our readers on SaveUp’s Facebook page is “How do you invest your own money?”

I’ll share an overview of my finances in the hopes that it inspires you to develop a plan to improve your own financial position. These investments are only part of the plan I’ve put in place. They don’t include very important aspects like estate planning (I have a trust and other key documents in place) or risk management (I have an umbrella liability policy in addition to other insurance). That said, here is more information about where my money is invested: 

My House

Because this is my home, I don’t consider it an investment in the same way I view my retirement account, for instance. However, it is a large part of my net worth and needs to make sense on an investment level. This could technically be considered a leveraged asset because I have a loan against it.

Checking Account

I have enough money to cover monthly expenses in this account (but no more than that). This isn’t an investment account per se, but I thought I’d mention it because it is part of the picture of how I manage money and investments.

Emergency Fund

My emergency fund is in an easily accessible savings account. It’s not earning much interest, but it is available to me, which is the primary concern for these funds (not growth). Currently, I have about three months of spending set aside, and I’m building it back up to six months.

Health Savings Account (HSA)

This is my smallest account (besides my checking), and it is in cash so that I can spend it on health care expenses as they arise. At this point, the advantage of this account is the tax benefit, but not the investment potential.

Brokerage Account

I have money in a brokerage account, and it is invested conservatively for near term goals (home improvement projects).

Retirement Fund

I have a Roth IRA and own a number of mutual funds in this account. It is a diversified portfolio. They are invested aggressively because I don’t plan on retiring for over 30 years.

Rental Property

I own a small single family home with my brother which we rent. This property has positive cash flow, meaning the rent covers more than the expenses. We keep some money in reserve so that we have funds to maintain and make upgrades periodically. The strategy with this investment is to hold it long term.

Private Bonds

I also own a number of privately held bonds.  These are essentially high yield notes that are diversified. These assets are part of a family business. Therefore, I don’t recommend them to clients because of the conflict of interest due to the nature of the close relationship.

Remember, your portfolio is not your plan. Investments should be driven by your needs and your goals. Just because the above mentioned assets are right for me doesn’t mean they would serve you well and help you meet your goals. I hope that by sharing, I’ve given you some insight into your own financial plan and that you are motivated to consider your own goals and investments in order to SaveUp!

This post was written by SaveUp’s personal finance contributing writer, Catherine Hawley, CFP®.

Image source: Inc.

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Written by Catherine Hawley

Catherine is a CERTIFIED FINANCIAL PLANNER (TM) who offers accessible and objective financial advice to individuals and families. Her aim is to help clients gain clarity and confidence so they can pursue their definition of financial success. You can find more information about her independent practice at www.catherinehawley.com. She has worked at Rhodes & Fletcher, LLC as a Personal Benefits Specialist and at the firms of Bernstein Global Wealth Management and Barclayʼs Global Investors. Catherine has a bachelors degree in communication studies from the University of California, Los Angeles where she was a scholarship athlete and captain of the womenʼs tennis team.