easy · Certified Financial Planner General Principles
The Alvarez family carries $46,000 in credit card debt with an average interest rate of 24%. They have no emergency reserve and ask for a recommendation on how to invest a recent $10,000 year-end bonus.
Applying the hierarchy of policy elements, which action is most appropriate?
- Open a taxable brokerage account to begin building the client's outside investment portfolio.
- Invest the bonus into a diversified S&P 500 index fund to maximize long-term growth potential.
- Prioritize establishing a starter emergency fund and paying down the high-interest debt.
- Recommend a high-yield corporate bond fund to provide income while maintaining some liquidity.
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