I can’t give financial advice on wealth creation, but one thing I can tell you, it will not happen by itself. Wishing to have wealth won’t help you either. You need to sit down, figure out what you want and then put a plan in place.
And whilst I say that you cannot create wealth by yourself, you need a team, be vary! You are the person who is most interested in your financial success. Not the financial advisor, not the hedging fund manager, not your bank manager, and the list goes on. So whilst you need to weigh up all wealth creation options, you also need to understand them!
Do not ever invest in something that is about as clear as mud to you. Also forget the get rich quick schemes. Wealth creation takes time, buying into the next big thing, will only make the salesperson richer.
So here is what I recommend for you to do to create wealth:
Get clear on your income
Sit down and work out what your income is. You may have salary to consider, from one or more jobs. You may have put some money in the bank and have interest accruing, or receive some sort of benefits, rental income, dividents. It all counts, put them all down along with their frequency. Do you get them weekly, fortnightly, monthly, annually?
Get clear on your outgoings
This is everything you need to pay, rent/mortgage, utilities, child care, food, car loan, personal loan, credit card. The list goes on. Make sure you account for everything. Again write out their frequency also.
So what is the figure you came up with? Does your income cover all your outgoings? If so, that is a great start! You should stay within those boundaries. Once you have done that, also check for any bad debts. You will need to cut bad debts out of the equation of your wealth creation strategy. You need to see where you can cut on your spendings to get rid of your bed debt as soon as possible.
Credit cards, car loans, personal loans, loans to friends and family, they all need to go. If possible reduce one payment to the minimum, and add the extra to the other. Make your payments weekly to pay as little interest on these as possible.
Now have a look at how much money you need to survive, that would be the cost of your food, shelter and necessities. Once you have this figured out, I strongly encourage you to look at saving up at least 6 month worth of funds to cover the necessities in case of emergency.
Once you have knocked out bad debt and have increased your savings, create a budget that you can stick to. Don’t cut out the fun stuff from your life, but make sure that you are not spending all your residual income on that.
Whilst you are getting rid of bad debt, look into and learn about wealth creation strategies. What is it you could get into and you understand? There is property, there are index funds, option trading, businesses, the options are endless. Learn about them. See which one is for you, and put a strategy in place.
What do yu need to do to invest in your chosen wealth creation strategy? Do you need a deposit? If so how much? Do you need to cover any fees when getting into it? Are there any running costs? Can you afford the running costs? What makes this class a good investment? What do you need to know or look for? Once you got your ducks in a row, then go for it.
Don’t forget that the best time to start creating your wealth is now. Don’t feel disheartened if you are starting from behind the eight ball, there is always room for improvement for all of us.
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