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.
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Sound Wealth Building Tactics ... continued from above
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.
Asset Protection.
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.
Use an
online calculator that will help you establish how much insurance
you should own.
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.
Disclaimer:
The information contained above has been provided as a general
service. Any references to specific financial, legal, accounting, or
taxation issues are done so in the context of general information
and should not be relied upon as fact or construed as advice by the
us in any of these areas. You should consult a relevant financial,
legal, tax or accounting professional to assist in your particular
circumstance. |
