Investments
Investments & 10% Rule
Put 10% of your income to work every month — here's exactly how.
What an A-grade financial life looks like
Below is a real example of the numbers a financially excellent person maintains. Use it as your target. Every single metric is achievable — most people reach it within 2–4 years of focused effort.
A-Grade Financial Profile — $8,500 / month income
$8,500
Take-home after tax
$3,485
41% of income
$850
10% → savings
$850
10% → investments
$850
10% → tithe + gifts
$0
Debt free ✓
$25,500
3× monthly expenses
$214,000
Growing every month
$8,500 monthly income allocation
Financial Health Score — How the A is calculated
Score 85+ = A grade. Every pillar matters — here's how a perfect profile hits each one:
Saving ≥20% of income → 25/25 pts. At 10% savings you earn ~12pts. Aim for 20%+ first.
Zero debt = full 25pts. Every dollar of debt shaves points. Pay off all consumer debt.
Spending <80% of income → 20/20. Living below your means is the cornerstone habit.
Goals 85%+ funded → near-max pts. Set goals in ClearWealth and fund them monthly.
Positive net worth → 15/15. Assets > liabilities. Every month should push it higher.
Your 10% Investment Amount
Enter your monthly take-home income — see exactly where to put your 10%.
Enter your income above to see your personalized investment plan
Where to Put Your 10% — Priority Order
Follow this ladder in order. Don't skip steps. Each one unlocks compounding at a higher level.
Why: Free money — 50–100% instant return on every dollar. Always capture the full match first.
Example: Employer matches 4% → contribute at least 4% of gross. Example: $102k salary → put $340/mo minimum.
Why: Paying 20% APR debt is a guaranteed 20% return. No index fund beats that.
Example: Credit cards, personal loans, car loans above 6% APR — knock these out before investing more.
Why: Tax-free growth AND tax-free withdrawals in retirement. The single best vehicle for most people.
Example: $7,000/yr = $583/mo. Invest in low-cost index funds (VTI, VXUS). Start as early as possible.
Why: Tax-deferred growth. Lowers taxable income today. Compound for decades.
Example: After maxing Roth IRA, funnel remaining 10% dollars here until you hit the annual cap.
Why: No limits, full flexibility. Buy total market index funds. Long-term capital gains are taxed favorably.
Example: VTI (US), VXUS (international), BND (bonds). Keep it simple — 3-fund portfolio wins long-term.
What to Actually Buy
Keep it simple. The research is clear: low-cost index funds beat 95% of actively managed funds over 20+ years.
VTI
Vanguard Total Stock Market
Every publicly traded US company in one fund. The bedrock of any portfolio.
VXUS
Vanguard Total Intl Stock
6,000+ companies outside the US. Diversifies currency and market risk.
BND
Vanguard Total Bond Market
Stability buffer. Reduces portfolio swings. Increase % as you near retirement.
Pro tip: If your 401(k) doesn't offer VTI/VXUS, look for any fund with "Total Market", "S&P 500", or "Index" in the name with the lowest expense ratio. Avoid funds with >0.5% expense ratio — fees compound just like gains do, but against you.
What $850/mo Grows Into
10% of $8,500 invested monthly at historical market average of 8% / year
Year 5
$62,000
Year 10
$156,000
Year 20
$507,000
Year 30
$1,270,000
7 Mistakes That Keep People From an A
✗ Waiting for the "right time" to invest
✓ Fix: There is no right time. Time in market always beats timing the market. Start today with $50.
✗ Carrying credit card debt while investing
✓ Fix: A 20% APR debt cancels your 8% market gains. Kill high-interest debt first, always.
✗ Picking individual stocks
✓ Fix: 80% of professional fund managers underperform the index. Just buy the whole market.
✗ Cashing out 401(k) when changing jobs
✓ Fix: That's a 10% penalty + income tax = 30-40% gone instantly. Roll it over instead.
✗ Ignoring employer 401(k) match
✓ Fix: Not matching = turning down your own salary. It's a 50-100% instant return.
✗ High expense ratios (>0.5%)
✓ Fix: A 1% fee on $500k = $5,000/yr gone silently. Index funds charge 0.03-0.07%.
✗ Investing before having an emergency fund
✓ Fix: 3-6 months expenses in HYSA first. Otherwise a car repair forces you to sell at a loss.
Ready to track your investment accounts?
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