I often get questions like “Hey Jeremy, I have $5,000 what do I do with it?”. This is the logic I usually walk them through.
I think focus is important. I wouldn’t work on more than one of these steps at a time. I most often see people feeling stuck when they’re doing a little of everything and not getting anywhere. Just go HAM on that debt. Forget about emergency funds and investing until you’re debt free. Then once those debt payments are freed up you can use them to fill up your emergency fund. Once that’s done, then you can invest with no risk and all upside!
The final step is a little more nuanced. If you’re there and want to know what to do, it’s a judgment call. If you’re conservative and want the sure thing, go nuts on paying off the house (if you own one). If you’re comfortable with the mortgage payment, go ahead and invest more (in a regular brokerage account or by buying investment real estate). They’re both good options. Neither is overtly risky in my opinion. Do what feels right to you.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.