Is Your GPS Set For Wealth?
Yet many people do not have a map for their own financial future.
This is surprising because everyone will eventually age and hope to retire. We all have heard that Social Security will not be able to help us all in the way it was intended. Planning one’s future finances has never been more important.
There are three key parts to any plan. Learn how they can send you down the right road to wealth:
Good Habits
Are Your Bad Habits Keeping You Down?
Most people know in order to build wealth, negative habits need to be replaced with positive ones. But this alone isn’t enough. From grade school math, we know an equal amount of positive and negative will always equal zero.
To build wealth, the majority of your habits must be positive. You can’t start building wealth or keep it, without letting go of most negative thoughts, environments, habits, and behaviors. Learn to avoid using credit – especially if you carry a balance.
Be satisfied with what you already have and avoid the temptation of the latest shiny gadget. Modify your lifestyle to avoid any unnecessary costs. Prepare your own meals and don’t purchase extras as a habit. Think of how much you could save if you take yourself off auto-pilot when it comes to your local coffee shop. If you are getting a coffee every day on your way to work, you are probably spending well over a thousand dollars a year. Are you really enjoying it that much, or is it just a comfortable habit?
New positive habits, environments, thoughts, and behaviors will go a long way to help you on your road to wealth. Aim for your higher and better self.
Lifestyles of the Rich and Famous
Look around you at those who have money.
Look beyond the conspicuous consumption pushed on the media. A very small percent of the wealthy live extravagant lives. Most live in upscale – but not opulent – neighborhoods and have learned that more is not always better. Change your perspective on wealth and how millionaires live.
What are the habits you need to emulate for success?
People
Your friends and family are a huge influence on you. Your environment and sphere of influence will most often match the person who you are or want to be.
You are the average of the five people we spend the most time with.
– Jim Rohn
It is simple to say you should avoid negative people, but eliminating them without a plan for improvement just leaves you in a vacuum. Look for ways to expand your circle with “like-minded” individuals who will be a positive influence on you.
What does that mean?
Seek out individuals – and organizations where people who are also trying to better themselves meet. If there are investor meetings, evening courses on financial planning, or clubs in your neighborhood, that is a great way to meet new people. These people will not only have similar thoughts and objective to you, they could have a positive impact on your future.
If you enact positive change in the type of people you associate with, this circle will cheer you on and even help you.
Strategy
What’s Your Plan To Achieve Wealth?
Most people dream of winning the lottery, but this wishful thinking rarely materializes. Powerball is an unlikely solution!
Yet many people have an unreal expectation about their future. Thinking that you will earn more money later in your career and save it then is not reasonable. One can never know what the future holds and the best way to prepare for it is to start saving money NOW.
It can be a little overwhelming for some to think about how much money they might need in 25 or 50 years.
It can be a good idea to start with a 1, 3, 5, and 10-year financial plan.
Start by thinking what you want later in life. Do you want a family? What does that entail?
You may wish to ensure your family is well provided for and that your children have a good start in life.
Create a document to break this down. How much is your household expense annually? Include things like housing payments, insurance, utilities grocery and medical expenses.
Do you have or plan to have children? Do you plan to give them financial help for college? How about their children?
Figure out how you plan to address that and write down the numbers.
When do you want to retire? Where?
Use the values you know and have now and don’t get stuck trying to figure out what these amounts will be in the future. Inflation can’t be fully predicted, so just get it done! Ballpark.
Each goal should be
- Specific
- Measurable
- Attainable
- Realistic
- Time defined
There will always be modifications to this plan, but it is a lot easier to modify an existing plan than to forge ahead without one at all!
Use this information to set up or augment your savings plan.
If you don’t have a savings plan, you will never attain wealth without one. Start NOW. Don’t be fooled into thinking you will just contribute more later. Even with today’s low interest rates, compound interest, started early will contribute a sizable amount to your financial goal.
Protect what you have
Most people have home and auto insurance, but it can be surprising how many income earners don’t have life insurance. Some people think this is just inviting misfortune. Having home insurance is not inviting a disaster at your house. Having life insurance is no different!
In addition, secure insurance for all assets as your portfolio grows.
Give your family peace of mind. Dealing with emotional loss following an untimely death is difficult enough. You would not want your family to struggle financially on top of everything else they must deal with.
Knowledge is power and updated knowledge is the most powerful of all.
It takes discipline, but living within one’s means is key to accumulating wealth. Being financially responsible in the present is a good way to ensure a comfortable future.
These steps are good places to start a more conscious and directed route to achieving your financial freedom. Read, reflect and take what will work for you.
Bottom line is that there is no blanket strategy. Each person must evaluate their own circumstances, needs, and desires. Get the help you need to achieve financial freedom.
If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much.
-Jim Rohn
Above all, believe in yourself and believe that you will achieve your goal!
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Sources:
Lynda at Sonoran Sun | Private Equity Investments
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