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Keep savings account. An investment account and a earning account.
Know the consequences of forbearing or deferring loans. The breathing room you get is often paid back threefold in capitalized
interest or an increased loan principal.
Create an emergency fund or funds. These accounts should contain the equivalent of 3 to 6 months salary using low risk accounts
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(savings, certificates of deposits or insured money market accounts) as a safety net not just for your finances but for unexpected events in your life. This prevents you from dipping into your earnings or cashing in other income resources when unexpected and unwanted events happen, such as sudden illness.
Remember that you can grow rich now on money that you are throwing away. To be truly wealthy, you have to know that a simple
dollar is an investment goldmine.
On average, millionaires spend more time selecting what to buy than buying the product itself. Why? Because they look for the best
bargain before laying their money down—and ask for discounts before making a selection. Apply this principal to your life and watch
your expenses go down.
Instead of selecting the first brand-name product you see, take the time to check what exactly you are getting. For example, many commercially branded cereal and grain products have exactly the same nutritional content as their generic cousins, at almost twice the price. Remember that you are paying more for the brand than for the product itself.
Millionaires and the wealthy also know the value of patience. Many stay in the first home they bought long after they can afford a more expensive one.
Never accept a deal at face value. Negotiate until you feel the terms are in your favor.
The most important thing you should know is that without financial freedom, you cannot be truly wealthy. The most important thing is to create a base: a lower debt to income ratio and leeway to save and put money aside for investing later on.
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It also frees up your mind so you can implement the law of attraction. Implementing positive thinking in your life can draw in positive forces and create more and more goodwill and luck. It is hard to think positively when you are constantly worried about Bill or make a payment. By thinking positive and creating more positivity in your life you bring no just monetary wealth but a wealth in your personal life.
11.Investing and Managing Your Wealth:
Becoming Truly Wealthy
Once you have established a firm financial foundation or put aside a little money, it is time to learn to invest. Many first time investors fall into the trap of waiting, and waiting until they “have enough.” The first thing you have to do is nix that notion, right now. You will find out by reading the tips that even measly amounts can add up to great amounts over time.
Others balk at investing because they think “I do not know enough to be a player.” That is right. You do not. The truly wealthy understand how money works and never and never starts sentence with the " I do not know if you not understand investing and how it works" It is time to do the legwork.
The primary focus of investing is making your money work for you instead of working for your money. Many wealthy people have perfected the art of creating their wealth instead of giving a service. Building wealth also means creating wealth that is sustainable and continues to generate even in the event that you are unable to work.
Learn the difference between having a high income and being truly wealthy. High incomes do not necessarily mean that you are rich,
especially if this income comes from only one source. The myth persist that you can only be truly wealthy if you come into family money or are born into a silver spoon, silk sheet and antique furniture continue to believe in this myth., and you still have the mindset of the poor.
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Many of the middle class believe that a high income job is the end all of their existence and work their butts off to get to a position that pays in five or six digits but end up baffled at how little they have by the time retirement rolls around.
For example, the average high level manager earns $200,000 a year, with benefits but stands to lose that income in the event of layoffs or illness. Although his income earning potential is high, it only comes from one source.
Contrast that with a middle level manager earning $50,000 a year. This middleman ager manager, however, rents out properties in the city for another $500,000 and reaps dividends from stocks and bonds for another $100,000 a year. In the event of illness, death or mass layoffs, half of his earning potential is still secure.
The source of the latter’s income is also easily passed on to future generations, securing wealth for the middle level manager’s family.
Choose your investment goals as these will decide your allocation strategy later on. A broker or brokerage firm can help you decide on
what your plans are, as well as help you begin investing.
Research the different types of investments as well as how risky they are. In general:entitled to annual profits. However, many
people buy stock to sell when the price is high, not for dividends. The practice of buying low and selling high is relatively low risk but the potential for reward is governed by market and highly emotional changes. Yes, stock is considered an emotional asset.
•Bonds – bonds are small loans to companies or governments that the investor pays for. They usually have fixed interest rates and are considered very safe and low risk investments. T-bills, municipal bonds•Stocks – you purchase partial ownership of a company and as part-owner, are
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