Friday, March 22, 2013

Ideas to help build wealth

Tax time helps us focus on money, how we spend it, how we save it. Here are some ideas to help when you are looking at money. The most important idea is #3.
  1. Take time to plan. Invest time in working out a long term and short term financial plan. The worst thing one can do is start trying to accumulate wealth without a real idea of what they are going to do tomorrow.
  2. Invest wisely. Research stocks and know the amount of money you are willing to lose. High return equals high risk. Stay diversified and you should not be disappointed.
  3. Pay yourself first. One simple word, save. Before you pay rent, bills and the like, pay yourself that is why you work. Take it out of the money been before it gets passed around.
  4. Use cash. Using cash not only gives you bargaining power, but it also brings spending to a more tactile experience. It is much easier to impulse buy with a card, but counting out the cash is a bit harder to do.
  5. Do not depend on a credit card. Credit cards are not bad in and of themselves, but if you are relying on a credit card to pay your rent or bills, then you have a serious problem. Get on your feet first.
  6. Pay off debt. Get the monkey off of your back and pay off those outstanding credit card bills or your student loans. Your personal net worth will never increase until debt is g-o-n-e.
  7. Pay cash for big ticket items. This makes you save and think about whether or not you really need that 80 inch plasma TV. It also gives you bargaining power at the check out stand. Try it, it works.
  8. Shop around. Prices on big ticket items and even cars and comparable houses vary from street to street. Know what is the going rate in a given area for a given item.
  9. Give to charities. Read any book about people who were able to amass a ton of wealth and they will say that they gave to charities on a consistent basis. Karma, anyone?
  10. Budget. Take control of your money, do not let it control you. Budgeting allows you to tell your money where to go and what to do. It is the single most helpful practice to get into on one’s way to becoming wealthy.

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