18 Proven Personal Finance Tips to Build Wealth ( #8 Will Surprise You)
Financial Freedom and Wealth Creation Formula: Discover How to Build Sustainable Wealth and Become Financially Free
Financial Freedom can
be described as a mood that pull the conditions, circumstances and
events that empower everybody to bring it into physical reality.
Almost all wealth normally takes place as a result of what you
actually ARE on the inside, NOT what you actually DO on the outside.
Always feel wealthy, then you will get wealth.
Achieving financial freedom and building wealth don't have to be very hard if you have the knowledge and the needed tips.
your Wealth Map / Proper Financial Planning
Having a financial
plan is very important because it can easily assist you clear out your debt, prepare for a retirement that is enjoyable and then save for
the things you really need. Now if you want to stop living from
paycheck to paycheck, I believe it is high time to start following a
financial strategy that is balanced.
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There are some ways
to financial planning: Budgeting and saving; investing;
and retirement and estate
planning. You must work on all these in order to have a good
You have to know that
there is no other way around it because even if you donít like the
idea, one of the main things of managing
your money successfully is budgeting. It is actually not the
negative task which so many people think. It is actually not a
financial diet and it isn't what relieves you of what you actually you
Budgeting assists you
to see the way and where you use your finance. It will also help you
with the right way to use your finance in order to get what you
actually need. It can assist you to strategize your debt elimination
and also start saving for the future.
When you use the
right steps to budget, you are simply laying out the right strategy
for your financial future. You are knowing what you have to save for
and the right way to go about it. Now with a good budget in place you
can easily start a savings plan that will assist you in meeting your
financial goals on long term.
The fact is with a
budget, you will be able to know the place in which you can easily
save money. You have the opportunity to enhance your financial
There are so many
people who think that investing
is not for them. However, investing is very important in starting your
future. All you are needed to do is to just educate yourself and then
start. You are not required to have so
much money to start investing. All you have to do is to easily
start investing and let your money grow little by little.
One of the best ways to get ready for your retirement is investing. If
comfortable retirement is what you want then it is never too early to
start planning. Everybody want to enjoy their life during retirement
but without good planning, you will use most of your golden years
working and social security will not be there when you finally get to
the age of retirement, even if it is there, it definitely won't be
enough to maintain the lifestyle you currently have.
With the right
strategy, you can look forward to retirement. So along with retirement
planning and putting yourself in order, you will need to have
insurance which is good that will cover the right emergencies that may
come up. The priorities here should be generous life insurance and
good health insurance. Property insurance is also needed because it
covers all the hazards in your area. Disability insurance is also a
very good idea only if you can afford it.
is extremely important
Education is a must
for everybody no matter where you are in the world because it is the
process of getting knowledge. It is actually the way of creating a
very civilized society. Education and Literacy are two things that are
different. Education means the ability to reason and being literate
means to be able to read and write. All countries around the world
invest so much in making sure its citizens are educated. Education
assists a person in becoming a better human being, earn a good living
and live a very good life. You have to be aware that in every society
after shelter, clothing, and food, education has become a necessity.
Education assists in
growing a better society, because it shows man so many things like
basic etiquette, rules, regulations and how to behave with others. It
also assist in growing a society of people who are civilized and
working for the good of each other. Citizens that are educated can
easily differentiate between right and wrong. They know their
fundamental duties and rights and also follow laws which govern the
It also assist in
making people earn a good
living. Being educated when you have a business helps you think
about the modern ways to move your business forward. Education also
assists you to afford a luxurious life thereby offering you financial
Education also plays
a very good role in taking the economy forward. An economically
independent and educated country is a big asset because it helps in
building lots of self-confidence. It gives you the required ability to
take informed decisions and also assist in communicating thoughts to
other people in a very effective way.
The best benefit
which education brings is to help people think against the illogical.
It assists in fighting against the superstitions that so many people
who are uneducated follow blindly. People who are educated normally
think rationally and also make arguments which are based on scientific
reasoning. Education also keeps you informed of all the new
developments and happenings around the world and assist in keeping
pace with the evolving technology.
your long-term financial strategy
A lot of people save
so much money, or sometimes buy investments
for the purpose of making money
for big investments such as buying a home, future education or having
a healthy retirement fund. Almost all of these things can easily be
accomplished, if you know what to do, and the dangers to avoid.
Now what is the end
goal of your financial efforts? Letís say you have set a goal, what
you will need next is to have a defined goal time to have it
completed. Your goals need to be based actually upon common sense, and
they also need to be very achievable. A good aim is to easily write
those goals down, and also quantify them with a financial amount. You
have to know that an example of this is to simply figure out the right
amount of money you need for the down payment on the house? How much
do you need to save for that college fund? Whenever you quantify your
goals, then you will be able to take clear steps to achieve them.
Now if you begin your financial planning early, you will have more chances to
make any changes and also to follow your investment plan very smoothly
than anybody who starts out very late. You have to know that life
brings many changes, and there is definitely going to be changes in
our financial situation. But it's not a terrible thing if you start
out late, just that you won't have as much room as any other person
who started out very early.
Good and long term financial planning is all about setting the right financial goals
you intend to attain at some point in the future and that will
determine money habits presently. Long term financial strategy is what
actually brings your current money management habits in compliance
with your goals.
a property when you are financially ready
I know youíve
probably dreamt of owning a property for a very long time now. But
recently, your dream has become more like a driving force than a
twinkling in the eye. Maybe all your friends are currently buying
homes and also asking you to do same. Or letís say your rent was
just increased again. Whatever the case is, you just canít wait for
another year to purchase that much needed property. But currently the
fact is you arenít quite sure if it is something you can easily
Now what is your
financial situation like currently? Do you think you are on top of
your bills? Have you cleared all your outstanding debt?
What if you are
currently struggling financially just to pay off your bills each
month, so it probably wonít be the right time to purchase a house?
Just because you are no longer giving that payment to another person
and instead putting it into an asset you actually hope to own soon
doesnít mean you can easily make the payment each month. You need to
make sure you have the right cash flow for the monthly payment, and
also some to put aside for some repairs and maintenance in the future.
You have to be aware
that, buying a property is
not actually about the down payment and closing costs. Furnishing the
home and filling it with the stuff you want is also needed to be
taking into account. You also have to consider moving. Now all of
these things cost lots of money. This is the reason itís very vital
to have a very good amount of money put away to handle all of these
expenses that will arise. You donít have to get into more debt
because you want to purchase a property.
How secure your job
is and what you actually do for a living should play a very big role
in your decision about buying a home or not.
Always give good and
careful thought to your unique situation before you can make the right
decision to buy. Because, you may not actually know what will happen
in the nearest future, but if currently you donít have a secure job,
then you probably arenít in the financial position that is good to
purchase a home.
off your loans and mortgage loans and be free
Student loans and
mortgage debt are sometimes seem to be good debt because they are
types of debt you take on in order to buy something that can easily
increase your net worth. Some bad debt includes credit card debt, auto
loans, and other consumer debt use to buy things that depreciate in
No matter the
classification, at some point debt still needs to be paid off. And if
you normally get a few extra money monthly, you can easily ask
yourself: Should I make fast payments on my mortgage or student loans
and which exactly should I choose to pay off first?
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6...Reasons to pay off your debts early
There are a lot of
arguments to be made concerning paying off your student loans and
mortgage very fast. For instance, when you pay off your mortgage or
student loans very fast, you will enjoy the following benefits.
Risk. Are you aware that
if you have debt payments, you must have income to cover them? Now if
you are debt-free, a job loss, disability, or any other temporary loss
in income wonít put you at much risk to ruining your credit or
losing your home.
More Wasted Money on Interest.
While you can easily take a deduction in tax for mortgage and student
loan interest (if your income falls below a certain threshold), the
deduction wonít cover interest costs completely. Money saved on
interest gives a very good return on your investment while Money spent
on interest is actually wasted.
You have to be aware that without a student loan payment or a mortgage
payment, you can easily do whatever you want with your money Ė
including saving for retirement and building wealth.
of Non-Bankrupt able Debt.
While bankruptcy can simply help resolve some debts as a last resort,
student loans are not resolve in bankruptcy and also you canít clear
your mortgage debt in bankruptcy, so if you really want to keep your
house you will have to pay it off since you canít wipe out mortgage
or student loan debt.
We all have those
spending habits that are bad which normally break the budget on a
monthly basis. Maybe you are always needed to have the electronic
gadget that is most up to date. It could be that you normally buy
something thatís on sale, even if itís not what you budgeted for.
Now no matter what it
is, you definitely know itís a big problem. If youíve made your
income statement, then I know you have probably getting to see the
dollar figures your overspending is associated with.
You have to know that
what some people normally see as overspending may be right in line
with you and your budget. You canít always go by those financial
rules of thumb you hear about.
What I actually mean
here is, if you have started cutting back on spending in some other
categories so that you can always dine out four times a week, then
more power to you. You already know whatís very essential to you and
has made it happen by being frugal in some other areas.
Now if your budget is
actually functioning well and you have started meeting all of your
goals, then overspending in that category isnít an issue for you.
Donít let anyone tell you it is.
But what if that
isnít actually the case here? What if you have planned to spend $100
dining out a month, but eventually end up using $400?
Now this is a habit
that is very bad and itís actually time to face the issues and solve
it until you it is fully under control. As you are aware already that
itís making you not to save money or even worse, causing you to fall
more into debt. Now thatís probably not what your goal is.
several income streams
Do you know that an
average millionaire has 7 different streams of income?
According to so many experts, making
money through different streams
of income is a big factor when it comes to how successful
financially you become.
Making money from a
lot of source is one of the best ways to wealth, most especially when
you are able to create passive
income streams that donít need a lot of effort and time on your
Multiple Streams of
Income is a method of making more than one type of income from more
than one source.
The fact is it is
very helpful when you diversify your income
through many streams, because if one type of income close up, then
you will simply have some other sources to help you keep going without
taking a big hit to your financial situation.
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If all your income is
coming from one job, then youíre actually putting yourself at great
risk because if your company decides to relieve you from the job, then
you will have no income until you find and start another one. That
means you have a very small control over that stream
Now earning income
from different sources assist you to be less exposed to some financial
risk. But beyond that, when you have different streams of income,
youíre much more likely to generate exponentially more income than
when you only make money from just one source.
It helps you have
more control over your financial life than when you make income from
just one or two sources.
in business opportunities
opportunities are very good when you know exactly what you are doing
and also what you want. So many people let a very good business
opportunity pass them by or they will sometimes jump into something
when they actually don't know what they are getting themselves into. A
business opportunity is only as good as the person who is actually
investing in it. When you do things the right way then your business
will expand and grow.
There a lot of things
that you should keep in mind when you want to get involved in some
business opportunities. Donít ever believe the claims that you can
easily make money with little or no effort. Any business opportunity
you will come across will require you to put in a lot of time and
effort so that you can simply make the business opportunity work out.
Because there will be no guarantee that the business opportunity will
flourish if you are not willing to put in the effort.
If you see an
opportunity and you want to start a certain business then you should
get all the required details in writing before you commit to anything.
If you are in contact with anyone who is selling a business
opportunity or franchise, then you have to get all required
details from them. These details should include any past financial
information as well as some predictions for the future. Seeing all of
this information written down can assist you to get a very good
picture of what you might be getting yourself into.
You should always
have it in mind that almost all business
opportunities are not without their risks. Most times people
invest thousands of dollars into a business opportunity or company and
then are surprise when the company fails or does not live up to what
they actually expected and they start wondering what they are going to
do now because all their money is gone. So many people always forget
that there is a very good chance that they will easily lose
A lot of investments
are very risky; you have to know that no matter the experience you
have in investment it is always a very risky business.
The fact is there is
nothing like a risk free investing, although some types of investments
are actually more risky than some others. This is one of the reason,
it is very necessary to have a stock portfolio that is diversified
enough to offer some insulation from losing everything due to one
bond, stock, or fund performing very poorly while so many others are
doing very well.
portfolio help in reducing the risks you take by investing carefully.
"Donít ever put all your eggs in one basket". Your
investment portfolio needs to be diversify so that one stock wonít
make you lose all your investments. You have to feel very secure that
your investments are somehow secured to some extent despite the many
fears you will face. You need to have a sense of security so that you
can continue building and investing in your financial future.
There are different
types of investments, different sectors, different companies,
different types of stocks, funds, bonds,
foreign exchange market, and others that has different types of
risks each and also different type of security it normally depends on
how you strategize your investment portfolio. Always make sure that
your portfolio has a mix of high risk and conservative investments to
a Long-Term Perspective
It is very important
that we always anticipate change and also build for some decades to
come in all our different business. Because we sometimes mine natural
resources in quarries that have long life spans. Therefore, we
strategize on how we will use these resources to the best benefit of
all the stakeholders. Now itís only when we do this, we can ensure a
supply which will meet the needs of some existing and emerging
applications. In the area of investing this is very true.
Diligence, time and
patience are all investors' best friends. Long term investing always
results in compounding effect
in increasing the wealth. Compounding
is a process where the interest is added to the principal amount which
in turn makes more interest. So over time the startup investment
Passive income can be
defined as an income which is gotten as a result of growth in capital
or maybe in relation to some negative gearing. Passive income is
normally taxable. Now from the above explanation, a recurring income
usually comes from somewhere that is not important for you to even
This means you can
easily earn an income stream even when you could be out there having
fun with your kids, partying on the beach, having fun with your spouse
all day and be easily making money on autopilot.
Donít you think
that sound like a very good lifestyle? These are just various methods
you can use to make passive revenue online.
Estate - Buying and renting
out some rental property is a very good way to earn passive income.
Store - If you have any
type of internet business, you can simply earn so much money on
autopilot by driving lots of traffic to your online store.
- Now you'll have to reason with a broker to know what is the best
stock option for you personally because in this instance what you are
looking for are stocks that pay dividends.
Reports - With this you are
going to write a very quality eBook teaching people how to do
something so you will have to put in lots of your time into this
because you are expected to give away lots of value in the free
your money to work / start earning more money
Do you know that what
actually differentiate the rich from the poor is just that the rich
let money work for them while the poor work for money? If you
seriously want to be rich, then you need to know how to get your money
to work for you so that you wonít be the one working for it.
The more you put your money to work for you the less money you will need to be
free financially free. Now how do you make your money work for you so
you don't have to work?
When you want to know
how to make your money work
for you the most important thing you have to do is increase your
financial education. When you start increasing your financial
education the greater return on investment you will attain and the
less money you need to be free financially.
You can easily start
by reading some finance books.
You can also be a part of an email newsletter which gives advice and
tips weekly on the best way to increase your
financial intelligence. There are a lot
of ways to easily learn about money, but the essential thing is
that you start learning because the more you learn the better return
on investment you will always get and then you will become simply free
out of debt
Money is a very
simple idea. We can exchange money for the goods that we want and we
can also use that money on anything else. Where it usually gets
complicated is when I need some goods from you now but I do not have
the required amount of money to pay you. This is how loans and debts
normally come about.
Itís actually good
to borrow some money today and then say I will pay you next month
because I am expecting some money but what will take place if the
money I was expecting does not get to me? This is exactly what happens
when debt becomes an issue.
To get the money I
will use in paying you I will need to lower my spending on any other
thing. We have evolved a way of life that is dependent on borrowed
money where we have things today and promise to pay for them next
month or next year.
Now how can we manage
to stay out of debt so that
we can easily avoid all the issues it brings along? First all we have
to do is change our philosophy because our parents and grandparents
never got all the things they needed straight away. Whenever they
needed something, all they do is saved up for it. Most times when they
are saving, they will come to a conclusion that it doesnít actually
matter and they will simply put the money to another thing which they
We are normally used
to getting all we want at the exact period we want it but the
satisfaction we usually get from buying new things passes away soon
and all that is left with us is just the debt. So you have to change
the way you think and also reduce your spending on unimportant things
and then start using cash to buy things. When you donít have cash
with you just stop spending.
The truth is we will
be better off emotionally and financially, if we learn to buy less
stuff. You have to know that shopping is not entertainment. So if you
really want to stay away from debt, you have to stop using money very
rough and simply look for other things in life to enjoy that cost much
One of the common
goals most people really want to accomplish is building wealth. But
most issues along the road usually make this goal very unreachable.
When you are face with so many problems in life; all you have to do is
always ask yourself some questions which will assist you in solving
the issue not question which will make you place your focus on the
problems. You can start by asking yourself some questions, below are
some questions which you can get started with.
skills do you have in money management?
is your current net income and what does it cover?
decision making skills do you possess when it comes to money?
After answering these
questions, you will have to move to the next step which is to know the
right way you can use in building
wealth with your current income. There are so many books out there
which teach how to build wealth wisely with the income you currently have. A
lot of financial expert normally agree that "poor money
management" is the most common issue which most people normally
face and one of the problems of Poor money management is so many bills
and just small money to clear them. You need to learn how to always
hold yourself accountable on how to manage your money. Just do your
best to strategize any expenses that is big and small which at the
very end assist you in making very good decisions!
Just ask any person
who is wealthy how they made their wealth, you will never hear them
say they had a good high paying job, or they sold few things and then
became very wealthy. What you will always hear them say, is that a
wealthy person is very smart with their investments and normally find
a good way to generate a passive or residual income that keeps growing
even when it is not being developed actively. One of the common
mistakes most people normally make is thinking that their wealth will
grow with high paying job alone.
Achieving wealth with
the income you currently earn is very possible but you need to know
the right way to make good decisions and keep an open eye for
investment opportunities which can easily assist you grow the income
you currently earn. All you are needed to have is a positive outlook
by using your powerful mind. You need to trigger your sleeping brain
so that you can make use of it.
in great businesses for the long term
Do you know that
long-term investment is the method of buying and holding investment
securities that you believe might compound wealth indefinitely into
the future? Long-term investing is all about depth of vision, character, and the
cultivation of patience, about the person you are and who youíve
actually made yourself to be.
The purpose of life
is not to actually manage your investment because long-term investment
needs less of your time. Your work is usually done when you purchase a
high quality stock which you actually believe will maintain its
competitive advantage indefinitely.
All you are needed to
always do is easily check in on the company periodically to ensure it
is very well. Now when exactly do you need to always check in?
Quarterly is usually good enough.
You wonít have to
start looking for any other quality investments today, tomorrow, next
week, next month or even next year because the money youíve already
invested is compounding away safely.
The fact is long-term
investing is always successful because of its benefits. If you
actually invest for the long-term then you will need to focus on
businesses which has strong and durable competitive advantages.
So many people don't
really think about the future so they don't plan accordingly. Research
show that over 90% of the people currently working will retire without
them having enough money coming in which they will use to maintain
their current lifestyle. Almost all of these people will become very
broke and just a little percentage will actually retire wealthy.
Most of these people
who retire wealthy have some things in common and the first is that
they all own their own home. It's very difficult to build a very big
fortune if you are throwing money away towards rent every month.
Another thing they all normally have is the fact that they own
a business with a little percentage having a very good paying job.
One other thing that is very common which they all have is that they
saved and invested their money.
18...Save Money and Own a Business
So if you actually
take these 3 things: Save money,
buy a home, and own a
business, then you have a very good opportunity of retiring
The truth is every
one of us actually want to be very wealthy but the difference between
those that have attain wealth and all others who have not achieve it
yet lies in the various methods both the wealthy and poor respond to
their doubts, strengths, beliefs, fears and weaknesses. The main
reason you are still poor and average is because you normally fall
back whenever things go in the direction which you did not expect;
this is the time when fear of losing money comes in; and now what do
you do? The most common thing people which are average do at this time
is to look for security by giving up. Now you have to know that this
is not a winner mentality, and if you must change from your present
place of financial insecurity you must pay the price and chose
freedom. So it is usually at this very point that so many people fail
because they are normally faced with the very urge to go back to their
comfort zone; which is usually their jobs.
So if you really want
to take full control of what you do today in order to be able to
change your financial
standpoint tomorrow, you will have to review your current
financial position and draw up a strategy of action to assist you
reach your financial destiny.
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