In
Sickness and in Wealth
By: Tom Justice
For Starters
When asked to name an effective way of obtaining
wealth, a common answer is: "Invest". What is the
problem with this answer? Well, the majority of
respondents have very little or no money in their
savings account. I see the beginning of wealth
building in a different light. A saying that almost
everyone knows but nearly no one applies is: "A
penny saved is a penny earned". In today's culture
it is definitely much easier to spend money than it
is to save it. The average American is exposed to
247 advertisements in one day! Less than 5% of
Americans have at least $3000 in savings and no
debt. It is no wonder that most consumers struggle
with saving money or grasping the concept of
building wealth. We are mentally flogged with
television and radio commercials, newspaper and
magazine ads, billboards, signs, posters and even
conversations. Whatever the method, it all serves
one main purpose - to take your money and
make it theirs.
Unveiling the Mystery
So with all those statistics and all that
advertising, how in the world is it possible to
build wealth? Well consider yourself ahead of the
game already. By reading this article you are
opening your mind to ideas and concepts which could
help you to begin the process which is more than can
be said for most people out there. A house starts
with a single brick and the same is true with wealth
building. You have to start with what you can and
keep adding to it.
Why not jump in to stocks, mutual funds or other
investments right off the bat? Life will continue to
happen whether you plan for it or not. So plan for
it. You must start with a lump sum of money in your
savings account which has been referred to as an
"emergency savings". A good figure for this is
$1000. You MUST pay your savings first, before
anything else. If you do not, your savings will not
grow (or it may not happen at all). This extra money
will act as a soft landing for any financial falls
that can and will occur while you pay down other
debts that are road blocking your way to building
wealth. You must realize though; this money is first
priority but can not be touched - ONLY for
emergencies. By following these 2 steps:
1) Stocking up your savings
with $1,000 and then
2) Eliminating extra debts (with great fervor), you
will prepare yourself for a much easier road to
building wealth.
Making it Happen
You have to take action now or this whole savings
thing will not happen. First, get a savings account.
If you have one, find out what the interest rate is.
Many have something like 0.25% to 1% (WHOOPEE!).
Remember that you are not trying to make all your
money in interest right now but since the money
is going to sit you may as well look around. It
is possible to land up to a 3-5% interest rate.
Another option is a money market account to get a
good rate although restrictions sometimes apply for
things like early withdrawal fees and keeping a
minimum amount in the account at all times.
Secondly, as I stated earlier, take your savings off
the top on payday. You have to make a painful change
as well though. You may have to sacrifice some
things to get that initial $1,000. This could mean
no eating out or temporarily cutting out an
expensive hobby. You also might want to try changing
your phone company or downgrading your cable
package. I hate this next idea but it is for a good
cause: Drop your credit card payments below the
minimum (JUST FOR NOW). Anyway, you get the idea.
Cut some here - cut some there. Now, take all the
figures you cut and add them together. This
is what you will put in to your savings account
until you reach $1,000. See, when the average person
feels like they are getting ahead or even staying
even, a setback occurs and sends everything
spiraling downward. This is the hard part of
building wealth and it is just the beginning (the
first brick). However, without this extra money in
savings you will tread water until you eventually
drown, so stop thinking about it and start acting on
it today.
Author Bio
Tom Justice is the webmaster for Clean Credit Online
and does all the designing, marketing, SEO and
maintenance for the site. He has a passion for
personal finance and how the economy and consumers
are affected by money. To see how you can use Clean
Credit Online to help you with your personal
finances please visit
www.cleancreditonline.com
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