hard · Certified Financial Planner Risk Management
The Varela household has high income and no emergency fund. Mr. Varela asks the planner to recommend an aggressive small-cap growth fund for their excess monthly cash flow.
What is the correct application of the 'Order of Surplus Allocation'?
- Invest in a Health Savings Account (HSA) first, then the small-cap fund
- Fund a starter emergency reserve before any taxable investing
- Prioritize the small-cap fund to take advantage of market volatility
- Use the excess cash to pay down low-interest mortgage debt
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