This is not startup founder specific — but think it’s helpful for everyone to have a background in Personal Finance 101.

If you’ve already read up on the topic or consider yourself knowledgeable about Personal Finance, feel free to skip this entirely.

The Foundation

Eliminate High Interest Debt

• Despite what you think, not all debt is bad.
• You can separate debt into:
  • Good debt: Mortgage, student loan payments
  • Bad debt: High-interest debt, credit card debt etc.
• The first thing you want to do is pay off all bad debt since it eats at you and makes everything else 10x more stressful

Start an Emergency Fund

• Have an emergency fund with ideally ~6 months worth of expenses
• You can invest this in a high-yield savings account or a money market mutual fund.
• You want this to be cash-equivalent — in today’s market, you can still get a 5% interest rate.

Spending, Saving and Investing

• Few different frameworks for spending, saving and investing:
  • 50-30-20 Rule
  • The Reverse Budget — pay off your investments, spend the rest
• Super important to track your “Investing Rate”
  • Tough to grow this while running a startup, but try finding a number and committing to it.
  • For non-startup founders, I recommend their investing rate be equal to their age. For founders, do what you can.