Categorized | Retirement, Saving Money

5 Steps Toward Long Term Wealth


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The American dream may not be dead but it has definitely evolved since its inception. Understanding how a goal evolves can help you to better achieve it. So here are 5 easy steps towards achieving long term wealth.

Step One: Plan Where you want to go financiallywealth 1

Some of the first advice athletes are given is to picture the shot they are seeking. Whether it be making that next free throw or lining up that slap shot, visualizing the shot before taking it is one of the most sound ways to prepare for the goal you are seeking. This primary advice can be applied to your financial goals as well. Financial experts often tell people that there should be short, medium, and long term financial goals set forth in 5 year planners. When there is a clear goal in sight, you are more likely to put aside the necessary resources in order to best achieve your goals. Usually what comes to mind when thinking about how to gain long term wealth, residual income via investments often comes to mind. But understanding how to save is the first step towards achieving long term wealth because it teaches you how to save and spend. When it comes to saving money in short, medium, and long term funds you are only slightly closer to achieving your long term wealth goals.

Step Two: Pretend you’re rich and no one knows

Many people when they think of wealthy people see mansions, expensive cars, boats, and maybe even a private plane or helicopter to shuttle you to and from the house to your place in the islands. However, most wealthy people don’t live to that extravagant lifestyle. There is an old adage that states, “rich people stay rich because they don’t ever spend their money.” Living by that statement is too far from the truth. Many people who are able to retire earlier than most of us and are more financially stable or wealthy are that way because they live below their means. The same advice is often given to people just starting their careers because they are more able to live below their means. That being said, let’s say you work two part time jobs and make $25K a year. Then you are offered a job for double what you make, if you are able to maintain your living expenses at when you were making half of your current total salary, you are more apt towards saving long term.

Step Three: Start planning for retirement now

The key to being able to retire from having to work, is the first step in being able to achieve long term wealth. Your retirement funding is your wealth, because it will allow you to travel or take on that second career you always wanted. By just putting away 50 dollars per month at a 7 percent return, after 30 years you will have complied 56,000 dollars in just thirty years. Don’t wait until your are 30 or 40 or 50 just because of the funding you currently have available to you. Good things may come to those who wait, but when it comes to saving for retirement you are only shorting yourself. Start saving now so that you can worry less as time goes on.

Step Four: Budget your moneywealth

Budgeting your money is one of the best ways to track your money and your spending habits. Understanding how much money you have and where it is going will help you better plan for how to save and spend better over time. Look at your pay stub and balance your checkbook. We tend to over look how we spend our money in the day to day which throughout the week adds up over time. How much do you spend in a given week? Is it possible to cut that expenditure in half per week? Multiple that spent money times 52 weeks in a year and see how much money you are wasting that could be better used in either a savings plan or in your emergency funds.

Step Five: Pay off your debt

Paying off your debt is one of the best ways to build your wealth over time. If you have high loan or credit card debt chances are you are paying a higher interest rate on those outstanding lines of credit. If that is the case then you are spending more than you are saving by just having those lines of credit open. In order to cut your spending, you might have a better shot of achieving your long term wealth building goals by paying down your bills and debt sooner.

These five steps towards helping you build long term wealth are here to help you set up and achieve your financial goals. Following and practicing them in a day to day mentality will help you master them as they become part of your daily routine. Your road to building long term wealth starts here!

 

 

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