Do you know how to use other peoples' money to grow your wealth ?
Do you think all types of loans are created equal ?
This post is a continuation of my first post on this topic ( "How To Get Rich - Use Other Peoples Money" ) review first post before proceeding (check the side bar for link under most viewed posts)
All loans are not created equal. Read on to find out what investment loan, if any, may best be suited for you in your current position.
Line of Credit
A Line of Credit is an open ended load that can be paid off at any time and quite often you can make interest only payments which keeps your investment working longer for you. This type of loan is recommended for most liquid investments such as stocks and bonds, REITs, Royalty Trusts, etc. Basically for anything that can be cashed in quickly if necessary.
If you have equity built up in your home, you should also be able to secure your line of credit with this equity in order to ensure a much lower interest rate. Secured lines of credit generally receive a much lower interest rate as there is less risk for the lenders.
Mortgage
A Mortgage is a loan on Real Estate that is secured by the actual real estate. If you own your home, you will likely already be very familiar with this form of loan. I generally only recommend this form of investment loan if you are planning to purchase revenue producing real estate as your investments. These are not well suited for liquid investments as there are too many restrictions and penalties built in should you decide to cash in your investment and pay off your loan. Good for long term revenue producing real estate only.
Margin Accounts
Margin Accounts are loans that are offered by your stock broker and are secured by the asset you are purchasing. I'm not personally comfortable with this form of loan as your broker can require partial or full repayment at any time your investment is below water (in a loosing position) You have absolutely no control over when to make repayment and you may have to sell your investment at a loss in order to repay your loan. Losing money on your investments is never a good way to get rich.
What To Choose
The line of credit, the mortgage and the margin account are basically the most widely used forms of "using other peoples' money" that investors use today. Which form you use will be determined by your type of investment, the length of time you wish to hold your investment, and last but not least, the form of loan that you will be able to qualify for.
I personally use lines of credit and mortgages for my investments and have never used a margin account. I believe in having total control over when I repay my loan amounts.
Using other peoples' money can be very rewarding, however, there is also a great deal of additional risk involved and should only be utilized by experienced investors. This is not the place for the average investor to be starting as it could lead to a total loss of the invested amount should things go wrong.
As always, I welcome your comments and suggestions for future topics.
Tuesday, November 13, 2012
Tuesday, November 6, 2012
How to Get Rich - Turn Negative into Positive
Have you ever listened to a negative person complain about everything ?
Do you enjoy the atmosphere created by a negative person ?
A negative person can be a real downer to your life ! Don't be one of them !
Negative is Everywhere
We are all exposed to so much negativity in everyday life it can be downright depressing. Just listening to the news everyday can depress anyone. Negative sensationalism sells and the media knows this. It's not very often you see a positive enlightening news article.
It's no wonder there are so many negative people around. They listen to the news, they listen to other negative people, etc. etc. Many are defeated before they even start out in life. What a shame it is that we live in a society where it is deemed normal to be negative.
Can You Change
On the other side of the coin there are positive people that refuse to let anything get them down. They seem to attract good fortune and everything just seems to go their way. I think we all know at least one of these individuals but maybe not as well as we would like to. We feel intimidated and not good enough to hang out with them. (negative)
The good news is that you too can become one of these positive individuals. It may take some hard work and constant mental conditioning, but it is possible.
Think of life this way. For every negative action that happens there is an equal and opposite positive reaction somewhere. This is a law of nature Life is always in balance. The trick is for you to find the positive reactions and embrace them.
It may seem like a simple thing to do but in reality it is far from it. You must first learn to overcome the negative conditioning that you have been used to living all of your life. This is not east and near impossible for many individuals. The negative for them is just too overwhelming.
Turn to The Positive
To reverse your polarity (negative to positive) you must start thinking of the positive outcomes to a negative event. There is at least one somewhere, but sometimes they are well disguised. As an example, the good side of a stock market crash is that everything is on sale. There are many bargains to be had for those that embrace the positive.
Another way to become more positive is to filter out the negative whenever possible. You can start by realizing that the media makes money from the negative. Stop believing everything you read or see. Life is not as bad as what they make it seem. Do your own research and you may be amazed.
There are also many books and other programs that are designed to help you think positive thoughts. Make it one of your goals to look for things to encourage your positive thoughts. It is a lifestyle worth embracing.
Turn negative thoughts into positive ones and you will be amazed at what opportunities you will begin to see beyond the fog of the normal negative world we live in.
As always, I welcome your comments and suggestions for future topics.
Do you enjoy the atmosphere created by a negative person ?
A negative person can be a real downer to your life ! Don't be one of them !
Negative is Everywhere
We are all exposed to so much negativity in everyday life it can be downright depressing. Just listening to the news everyday can depress anyone. Negative sensationalism sells and the media knows this. It's not very often you see a positive enlightening news article.
It's no wonder there are so many negative people around. They listen to the news, they listen to other negative people, etc. etc. Many are defeated before they even start out in life. What a shame it is that we live in a society where it is deemed normal to be negative.
Can You Change
On the other side of the coin there are positive people that refuse to let anything get them down. They seem to attract good fortune and everything just seems to go their way. I think we all know at least one of these individuals but maybe not as well as we would like to. We feel intimidated and not good enough to hang out with them. (negative)
The good news is that you too can become one of these positive individuals. It may take some hard work and constant mental conditioning, but it is possible.
Think of life this way. For every negative action that happens there is an equal and opposite positive reaction somewhere. This is a law of nature Life is always in balance. The trick is for you to find the positive reactions and embrace them.
It may seem like a simple thing to do but in reality it is far from it. You must first learn to overcome the negative conditioning that you have been used to living all of your life. This is not east and near impossible for many individuals. The negative for them is just too overwhelming.
Turn to The Positive
To reverse your polarity (negative to positive) you must start thinking of the positive outcomes to a negative event. There is at least one somewhere, but sometimes they are well disguised. As an example, the good side of a stock market crash is that everything is on sale. There are many bargains to be had for those that embrace the positive.
Another way to become more positive is to filter out the negative whenever possible. You can start by realizing that the media makes money from the negative. Stop believing everything you read or see. Life is not as bad as what they make it seem. Do your own research and you may be amazed.
There are also many books and other programs that are designed to help you think positive thoughts. Make it one of your goals to look for things to encourage your positive thoughts. It is a lifestyle worth embracing.
Turn negative thoughts into positive ones and you will be amazed at what opportunities you will begin to see beyond the fog of the normal negative world we live in.
As always, I welcome your comments and suggestions for future topics.
Tuesday, October 30, 2012
How to Get Rich - Never Pay Full Price
Do you like to get a good deal on a product or service that you buy ?
Do you feel good when you pay less for something than someone else you know ?
If you are like most people, you would say Yes to both of the above!
Human Nature
Yes, it is human nature to get a feeling of satisfaction when you know that either someone else paid more or that you were successful in negotiating a price down from the sticker price.
Most people, however, only experience this feeling occasionally when something goes their way. Most of the time they pay the full price on everyday items without even questioning the price. This is the way that our modern retail system is designed.
Make It a Habit
There is another way! Why not try to get the very best price on everything you buy ? If you do, you can put your savings towards building your financial future !
An old saying once said that a penny saved is a penny earned. Although this saying is very outdated, you could say that a dollar saved is a dollar earned, or a hundred dollars saved is a hundred dollars earned,etc.
If you are having trouble saving the amount you need to achieve your goals, then why not develop the attitude of never paying full price for anything again. Make this a habit and put your savings towards reaching your financial goals.
Action Steps
There are many ways to get deals and reduce your everyday living expenses.
For instance, make it a habit to always shop around and compare prices. You will be amazed at the huge difference competitors will charge just to get your business.
Another way is to collect coupons from manufacturers and retailers. Coupons are designed as a form of advertising to get you to try their products at a discount, sometimes a big discount. The key here is to only collect coupons for items that you would normally buy everyday. Don't fall into their trap of trying new things just to get a deal. This will likely increase your cost of living. Be disciplined !
Always negotiate the price on big ticket items, such as an automobile, etc. Prices on the larger items are almost always designed to allow for a price discount. If they won't budge, don't hesitate to walk away and take your business elsewhere. The key here is to never let them think you really like something. Develop a take it or leave it attitude. You may find that they will be chasing you down the street when you walk out.
Never buy the add ons such as extended warranties and auto dealer rustproofing etc. These items are designed as pure profit generators and give you very little if any value. Learn how to say No to the pressure tactics they may try to use. Profit for them and extra cost for you. Not good for making you rich.
Penny Pincher ?
Never look at yourself as a penny pincher or being cheap. After all, it's your money and you should be able to spend it however you decide. Why not get the most out of your hard earned dollars. You really do owe it to yourself to get the most bang for your buck.
As always, I welcome your comments and suggestions for future topics.
Do you feel good when you pay less for something than someone else you know ?
If you are like most people, you would say Yes to both of the above!
Human Nature
Yes, it is human nature to get a feeling of satisfaction when you know that either someone else paid more or that you were successful in negotiating a price down from the sticker price.
Most people, however, only experience this feeling occasionally when something goes their way. Most of the time they pay the full price on everyday items without even questioning the price. This is the way that our modern retail system is designed.
Make It a Habit
There is another way! Why not try to get the very best price on everything you buy ? If you do, you can put your savings towards building your financial future !
An old saying once said that a penny saved is a penny earned. Although this saying is very outdated, you could say that a dollar saved is a dollar earned, or a hundred dollars saved is a hundred dollars earned,etc.
If you are having trouble saving the amount you need to achieve your goals, then why not develop the attitude of never paying full price for anything again. Make this a habit and put your savings towards reaching your financial goals.
Action Steps
There are many ways to get deals and reduce your everyday living expenses.
For instance, make it a habit to always shop around and compare prices. You will be amazed at the huge difference competitors will charge just to get your business.
Another way is to collect coupons from manufacturers and retailers. Coupons are designed as a form of advertising to get you to try their products at a discount, sometimes a big discount. The key here is to only collect coupons for items that you would normally buy everyday. Don't fall into their trap of trying new things just to get a deal. This will likely increase your cost of living. Be disciplined !
Always negotiate the price on big ticket items, such as an automobile, etc. Prices on the larger items are almost always designed to allow for a price discount. If they won't budge, don't hesitate to walk away and take your business elsewhere. The key here is to never let them think you really like something. Develop a take it or leave it attitude. You may find that they will be chasing you down the street when you walk out.
Never buy the add ons such as extended warranties and auto dealer rustproofing etc. These items are designed as pure profit generators and give you very little if any value. Learn how to say No to the pressure tactics they may try to use. Profit for them and extra cost for you. Not good for making you rich.
Penny Pincher ?
Never look at yourself as a penny pincher or being cheap. After all, it's your money and you should be able to spend it however you decide. Why not get the most out of your hard earned dollars. You really do owe it to yourself to get the most bang for your buck.
As always, I welcome your comments and suggestions for future topics.
Tuesday, October 23, 2012
How to Get Rich - See Your Life as a Business
Have you ever wondered how big corporations ever got started ?
What do you think led to their success ?
Well, all businesses started with an idea and the desire to turn that idea into profits !
Your Life as a Business
You too can become a big successful business. Think of your business idea as investing in other businesses in order to give you an income. You can even imagine this flow of income as tiny employees that you hire in order to make you more money.
The best thing about these tiny employees is you don't have to pay them or give them any benefits. Also, they will never call in sick or require a vacation. They will be working for you 24 hours a day, seven days a week without the need to take a break.
Basically, the more employees you can hire (the more money you can save !) the faster your growth of new employees will be. These employees will be put to work for you (money invested in other businesses) in order for you to make more employees, and so on and so on. Pretty soon, you could have a whole army of these tiny employees under your command. What power you will have !
Don't Fire Your Employees
The biggest mistake most individuals will make is to fire their employees (spend their money) before they have a chance to make other employees. In order for a business to thrive and grow they must retain their employees (earnings) in order to invest for their future ( hire more employees)
This is basically a very simple business strategy that anyone should be able to develop. Start by hiring as many employees as you can (saving as much as you can) . Find productive jobs that these employees can do for you (invest wisely) and most important, never fire your employees (never spend the money)
More Now Equals More Later
The more employees you can hire today, the faster your business will grow and the more employees you will have in the future. Pretty soon, you could be commanding your virtual army of tiny employees that will always be loyal to you and never give up on the fight to survive and thrive.
Perhaps this idea is a bit crazy and off the wall for most. However, I like to see it as a way for the average individual to feel the power of control that they alone have in developing their future potential. It truly is within you to do what you want to do.
Start your new business today and go out and hire as many new employees as you possibly can. The sooner you start the faster your business will grow !
As always, I welcome your comments and suggestions for future topics.
What do you think led to their success ?
Well, all businesses started with an idea and the desire to turn that idea into profits !
Your Life as a Business
You too can become a big successful business. Think of your business idea as investing in other businesses in order to give you an income. You can even imagine this flow of income as tiny employees that you hire in order to make you more money.
The best thing about these tiny employees is you don't have to pay them or give them any benefits. Also, they will never call in sick or require a vacation. They will be working for you 24 hours a day, seven days a week without the need to take a break.
Basically, the more employees you can hire (the more money you can save !) the faster your growth of new employees will be. These employees will be put to work for you (money invested in other businesses) in order for you to make more employees, and so on and so on. Pretty soon, you could have a whole army of these tiny employees under your command. What power you will have !
Don't Fire Your Employees
The biggest mistake most individuals will make is to fire their employees (spend their money) before they have a chance to make other employees. In order for a business to thrive and grow they must retain their employees (earnings) in order to invest for their future ( hire more employees)
This is basically a very simple business strategy that anyone should be able to develop. Start by hiring as many employees as you can (saving as much as you can) . Find productive jobs that these employees can do for you (invest wisely) and most important, never fire your employees (never spend the money)
More Now Equals More Later
The more employees you can hire today, the faster your business will grow and the more employees you will have in the future. Pretty soon, you could be commanding your virtual army of tiny employees that will always be loyal to you and never give up on the fight to survive and thrive.
Perhaps this idea is a bit crazy and off the wall for most. However, I like to see it as a way for the average individual to feel the power of control that they alone have in developing their future potential. It truly is within you to do what you want to do.
Start your new business today and go out and hire as many new employees as you possibly can. The sooner you start the faster your business will grow !
As always, I welcome your comments and suggestions for future topics.
Tuesday, October 16, 2012
How to Get Rich - Kill Your Bad Debt
Do you know the difference between good debt and bad debt ?
Do you know how to make debt work for you ?
The wealthy know the answers to these important debt issues, you should too !
Bad Debt
Bad debt is defined as any debt that you incur to purchase something that you do not receive an income from. Most consumer debt falls into this category.
Credit cards, car loans, lines of credit, even most mortgages fall into the bad debt category.
Good Debt
Good debt, yes you probably guessed, is any debt that you incur to purchase an income producing asset.
Investment loans, brokerage loans, mortgages for investment properties, etc. fall into this category.
Kill Your Bad Debt
When it comes to building wealth, the key is to eliminate (or kill) all of your bad debt. You cannot possibly get rich if you have to continually carry around the ball and chain of bad debt. Your income will continue to make someone else rich, namely your bank or other financial institution. Not a good plan.
To kill bad debt, you can either pay it off with a repayment plan or find a way to convert your bad debt into good debt.
Repayment Plan
For most, unless you already have liquid investments, this will be their only option for killing bad debt. Start by identifying which of your debts incurs the highest interest rate. If you have credit card debt, this is normally where you start. Next, proceed to the next highest rate and so on.
To free up funds to put towards repayment, you will likely have to make sacrifices to your lifestyle or increase your current income level. Either way, it will not come without some pain. Motivation is the key in any debt repayment plan. It will take time and commitment.
Turn Bad Debt to Good Debt
If you already have investments that are liquid (easy to turn into cash) and will not incur a lot of income tax if you were to cash them in, it may be best to look at this option for killing your bad debt.
First, cash in all of your investments that fall into the above category. Second, use this cash to pay off all of your bad debt. Third, obtain a new loan for investment purposes. Fourth, use the borrowed funds to buy back your previously cashed in investments.
This will in effect turn your bad debt into good debt. The big advantage of this option is that in many countries, you will now be able to "write off" your interest payments as an investment expense on your income tax. This can be a significant amount, especially as your income increases.
The key for this option to work is that your investment income or expected gains must be greater than the interest you will be paying on the loan. Check with your local adviser before trying this option.
R. I. P.
Both of the above options could be used together to ensure your bad debt is killed and hopefully will never resurface from it's ugly grave. Motivation and determination to improve your financial life will be absolutely necessary to achieve this ultimate goal.
As always, I welcome your comments and suggestions for future topics.
Do you know how to make debt work for you ?
The wealthy know the answers to these important debt issues, you should too !
Bad Debt
Bad debt is defined as any debt that you incur to purchase something that you do not receive an income from. Most consumer debt falls into this category.
Credit cards, car loans, lines of credit, even most mortgages fall into the bad debt category.
Good Debt
Good debt, yes you probably guessed, is any debt that you incur to purchase an income producing asset.
Investment loans, brokerage loans, mortgages for investment properties, etc. fall into this category.
Kill Your Bad Debt
When it comes to building wealth, the key is to eliminate (or kill) all of your bad debt. You cannot possibly get rich if you have to continually carry around the ball and chain of bad debt. Your income will continue to make someone else rich, namely your bank or other financial institution. Not a good plan.
To kill bad debt, you can either pay it off with a repayment plan or find a way to convert your bad debt into good debt.
Repayment Plan
For most, unless you already have liquid investments, this will be their only option for killing bad debt. Start by identifying which of your debts incurs the highest interest rate. If you have credit card debt, this is normally where you start. Next, proceed to the next highest rate and so on.
To free up funds to put towards repayment, you will likely have to make sacrifices to your lifestyle or increase your current income level. Either way, it will not come without some pain. Motivation is the key in any debt repayment plan. It will take time and commitment.
Turn Bad Debt to Good Debt
If you already have investments that are liquid (easy to turn into cash) and will not incur a lot of income tax if you were to cash them in, it may be best to look at this option for killing your bad debt.
First, cash in all of your investments that fall into the above category. Second, use this cash to pay off all of your bad debt. Third, obtain a new loan for investment purposes. Fourth, use the borrowed funds to buy back your previously cashed in investments.
This will in effect turn your bad debt into good debt. The big advantage of this option is that in many countries, you will now be able to "write off" your interest payments as an investment expense on your income tax. This can be a significant amount, especially as your income increases.
The key for this option to work is that your investment income or expected gains must be greater than the interest you will be paying on the loan. Check with your local adviser before trying this option.
R. I. P.
Both of the above options could be used together to ensure your bad debt is killed and hopefully will never resurface from it's ugly grave. Motivation and determination to improve your financial life will be absolutely necessary to achieve this ultimate goal.
As always, I welcome your comments and suggestions for future topics.
Tuesday, October 9, 2012
How to Get Rich - Secure Your Main Income Stream
Are you worried about losing your job ?
Are you worried about what will happen if you are unable to pay your bills ?
If you are, you are not alone ! This is one of the top financial concerns of individuals today !
Your Main Income Stream
Chances are if you are like most people, your job is your main source of income that you rely on to pay your bills and have a little fun. The reality is, even if you take the necessary steps to become wealth, you are going to need a job for quite some time yet. This means that you had better enjoy what you are doing and take the necessary steps to protect your income.
Enjoy Your Work
Many people I have talked to hate their jobs. My advise for them is to find a job or career that they can actually enjoy or at least not absolutely hate. This will not only make their life much more tolerable, but they could actually be seen by others to actually like what they are doing. This could create interest by their current boss and actually lead to advancements etc. Grumpy employees generally do not get very far.
It is therefore in your best interest to be liked by your superiors and may prevent you from being the first one to be laid off if tough times are ahead. If you don't like what you are doing, find something you would like to do. Life is too short not to.
Add Value to Yourself
Your goal in any job or career should be to position yourself to be the last one to be laid off. In order to do this, you must give your employer a reason not to consider you for a layoff. If you can work towards being the most valuable employee in the organization, this will certainly help. Be the best at customer relations. Be the most punctual and reliable employee. Do a little more than what is required. Etc. etc. You get the idea !
Adding value to yourself will also make it easier to get a good recommendation some day if needed for another job or career position. This is basically your best insurance from a life of poverty.
Be Prepared for the Worst
Even doing all of the above does not guarantee you will not someday be the victim of a layoff. Many things can happen that are totally out of your control. A company could go bankrupt. Governments could change policies that eliminate your job. Etc. etc. You therefore need a financial buffer to help through a potential layoff.
Many call it an emergency fund. Today, I call it a survival fund. I recommend saving an amount equal to three to six months of your committed expenses. Keep this amount somewhere where you can't easily get at it such as a savings account with no bank card access.
By following the above suggestions you should be able to prepare yourself as much as reasonably possible for a possible disruption to your main income stream. Nobody knows for sure what the future will bring, but we can take steps today to help limit the damage should trouble arise.
As always I welcome your comments and suggestions for future topics.
Are you worried about what will happen if you are unable to pay your bills ?
If you are, you are not alone ! This is one of the top financial concerns of individuals today !
Your Main Income Stream
Chances are if you are like most people, your job is your main source of income that you rely on to pay your bills and have a little fun. The reality is, even if you take the necessary steps to become wealth, you are going to need a job for quite some time yet. This means that you had better enjoy what you are doing and take the necessary steps to protect your income.
Enjoy Your Work
Many people I have talked to hate their jobs. My advise for them is to find a job or career that they can actually enjoy or at least not absolutely hate. This will not only make their life much more tolerable, but they could actually be seen by others to actually like what they are doing. This could create interest by their current boss and actually lead to advancements etc. Grumpy employees generally do not get very far.
It is therefore in your best interest to be liked by your superiors and may prevent you from being the first one to be laid off if tough times are ahead. If you don't like what you are doing, find something you would like to do. Life is too short not to.
Add Value to Yourself
Your goal in any job or career should be to position yourself to be the last one to be laid off. In order to do this, you must give your employer a reason not to consider you for a layoff. If you can work towards being the most valuable employee in the organization, this will certainly help. Be the best at customer relations. Be the most punctual and reliable employee. Do a little more than what is required. Etc. etc. You get the idea !
Adding value to yourself will also make it easier to get a good recommendation some day if needed for another job or career position. This is basically your best insurance from a life of poverty.
Be Prepared for the Worst
Even doing all of the above does not guarantee you will not someday be the victim of a layoff. Many things can happen that are totally out of your control. A company could go bankrupt. Governments could change policies that eliminate your job. Etc. etc. You therefore need a financial buffer to help through a potential layoff.
Many call it an emergency fund. Today, I call it a survival fund. I recommend saving an amount equal to three to six months of your committed expenses. Keep this amount somewhere where you can't easily get at it such as a savings account with no bank card access.
By following the above suggestions you should be able to prepare yourself as much as reasonably possible for a possible disruption to your main income stream. Nobody knows for sure what the future will bring, but we can take steps today to help limit the damage should trouble arise.
As always I welcome your comments and suggestions for future topics.
Tuesday, October 2, 2012
How to Get Rich - Have a Destination
Have you ever driven anywhere without knowing where you planned to go ?
Have you ever set out to do a job without knowing the desired outcome ?
Chances are you answered NO to both the above ! At least I hope so !
Plan Your Work
Before starting on a project you should always make a plan of the steps you need to take to accomplish your desired task. You also need to have a method for measuring your results versus what you planned.
Designing a financial improvement project is no different. In fact it should be easier than most other projects because everything can be measured in numbers. Let me use an example to explain this point. Let's say your project is to get out of debt by a certain length of time. You already know the amount of your debt and the length of time to accomplish your project. You simply divide the debt by the time to know how much you must save out of each paycheck etc.
More complicated projects will require steps. These steps should be planned out in detail and the results should be measured against your desired outcome. For example, let's say you wanted to increase your investment income by a certain amount per month. You must first determine how much you need to save to invest. You must then determine how many investments you wish to make to provide this desired income.
You must then look for good quality investments to provide this desired income. ( I recommend using my 50/12 Rule for this example - check it out in one of my previous posts)
Work Your Plan
Once you have developed your plan with all the necessary steps, it is merely a matter of starting to implement your plan. You have already determined what it is you need to do for each step. Start with your first step and just do it.
Of course you may find there to be obstacles in the way which you must find a way to overcome. This is normally the case with all well intended plans. These are the challenges that I mentioned in a previous post that must be overcome in order to reach your desired outcome (or goal) and to take advantage of the opportunities that await you.
Measure, Measure, Measure
Every step should be measured continuously along the way. Much like your car's odometer measures your distance traveled so that you know exactly where you are at any given time. This way you know how far you have come and how far you have left to go. This is a very important component of your project as it will help keep you motivated towards reaching your desired destination (or goal)
To know exactly where you are will give you a great feeling of well being as you look back to see how far you have come. As your destination grows closer, your feeling of well being will increase and your determination to reach your destination will become overwhelming.
In order to become wealthy, you must first know what wealthy means for you. (Your Destination)
Without knowing your destination and having a plan to get there, you could wander aimlessly in the vast world of financial challenges and opportunities and get nowhere.
As always, I welcome your comments and suggestions for future topics.
Have you ever set out to do a job without knowing the desired outcome ?
Chances are you answered NO to both the above ! At least I hope so !
Plan Your Work
Before starting on a project you should always make a plan of the steps you need to take to accomplish your desired task. You also need to have a method for measuring your results versus what you planned.
Designing a financial improvement project is no different. In fact it should be easier than most other projects because everything can be measured in numbers. Let me use an example to explain this point. Let's say your project is to get out of debt by a certain length of time. You already know the amount of your debt and the length of time to accomplish your project. You simply divide the debt by the time to know how much you must save out of each paycheck etc.
More complicated projects will require steps. These steps should be planned out in detail and the results should be measured against your desired outcome. For example, let's say you wanted to increase your investment income by a certain amount per month. You must first determine how much you need to save to invest. You must then determine how many investments you wish to make to provide this desired income.
You must then look for good quality investments to provide this desired income. ( I recommend using my 50/12 Rule for this example - check it out in one of my previous posts)
Work Your Plan
Once you have developed your plan with all the necessary steps, it is merely a matter of starting to implement your plan. You have already determined what it is you need to do for each step. Start with your first step and just do it.
Of course you may find there to be obstacles in the way which you must find a way to overcome. This is normally the case with all well intended plans. These are the challenges that I mentioned in a previous post that must be overcome in order to reach your desired outcome (or goal) and to take advantage of the opportunities that await you.
Measure, Measure, Measure
Every step should be measured continuously along the way. Much like your car's odometer measures your distance traveled so that you know exactly where you are at any given time. This way you know how far you have come and how far you have left to go. This is a very important component of your project as it will help keep you motivated towards reaching your desired destination (or goal)
To know exactly where you are will give you a great feeling of well being as you look back to see how far you have come. As your destination grows closer, your feeling of well being will increase and your determination to reach your destination will become overwhelming.
In order to become wealthy, you must first know what wealthy means for you. (Your Destination)
Without knowing your destination and having a plan to get there, you could wander aimlessly in the vast world of financial challenges and opportunities and get nowhere.
As always, I welcome your comments and suggestions for future topics.
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