Have you noticed that everyone wants to be rich, but few people seem to want to build wealth the old fashioned way - step by step? If you have tried the 'lottery method' and it hasn't worked out, read on for some tips on how you can build wealth for a better future.
Save Sooner, Rather Than Later.
Attention, procrastinators: listen up! One thing you don’t want to put off is saving for the future.
The earlier you save in life, the more you will have later in life.
Thanks to compound interest, the little bit of money you save as a 25 year old can become a lot of money by the time you are 60.
Even if other responsibilities crowd out your personal saving plan [i.e., buying a house, expenses for the kids, etc.] you can step up your savings in your 40s and 50s and still come away with a decent nest egg.
Discard Your Debt.
Before starting a wealth building plan, get rid of all of your unsecured debt [credit cards] and work toward paying off car loans and other personal loans.
If you don’t attack your debt, the interest you owe on your debt could effectively cancel out your savings. Better to get rid of your debt faster, than start building wealth.
Rainy Day Funds.
Life’s little emergencies [as well as big ones] can cause you to plunge into debt faster than you can even imagine.
Set aside 3 to 6 months of your annual salary in a special account and only draw upon the funds in an absolute emergency.
If you think you’d be tempted to plunder the fund, put it in a term deposit to make it more difficult to get instant access to your monies.
You Get Paid First.
Ask your employer if you can have money deducted from your pay to be deposited into a savings account ... or, better still, have money deducted as voluntary contributions to your employer superannuation plan.
The funds will come out before you even see your pay, therefore the “loss” of discretionary earnings will be less obvious to you.
There may also be tax benefits for making or increasing personal contributions to your super.
Find the Right Mortgage.
If you plan on living in your residence for a short amount of time, then choose a variable rate mortgage as your rate will be lower than with a fixed rate loan.
Use the monies saved with a variable rate mortgage to reduce your mortgage faster; refinance your home loan if interest rates begin to surge.
Your robust portfolio can evaporate swiftly if you are not suitably insured.
Make certain that your life insurance, health insurance and income (disability) insurance policies are sufficient to meet your needs.
Quick riches may come to a few, but most wealth is generated through careful planning and through the efficient managing of your resources.
You can properly prepare for the days ahead by implementing these proven wealth building tactics right away.