Wealth Building Part 1

Wealth Building Part I
Over the next few weeks I will be reviewing and highlighting several points from the book The Millionaire Next Door: Surprising Secrets of America’s Wealthy. As followers of the book know, true monetary wealth is determined not by the size of your paycheck, but by the amount of your paycheck you are able save. On that note, I thought I might give a quick refresher on the basics of building wealth. Here are a few pointers to get you started or refreshed on the fundamentals of reaching your savings goals.

1. Eliminate debt. The first step to saving is, of course, having enough expendable income to invest. What is the best way to free up more of your income? Pay off your debt. Simply calculating the monthly amount you spend on debt repayment will illustrate that eliminating debt is the fastest way to free up money. The only saving that should take precedence over debt repayment, is setting aside an emergency fund of 2-6 month’s salary. Once this is done, pay off your debt and re-purpose the money to savings. Let interest work for you instead of against you.
2. Set savings goals. Short term goals can be as simple as setting aside cash for a new dishwasher. Achieving your short term goals helps keep you motivated to reach your long term goals, including saving for retirement. How much will you need to set aside for a retirement that could last 20 or even 30 years? Set your goals, seek financial advice if needed, make a plan and get started towards reaching those goals.
3. Make a plan. Figure out how much you will have to save per week, per month or per pay check to reach your goals. For most savings goals, it’s best to save the same amount per period. If you will need to purchase a $20,000. car in three years (hopefully after you have driven yours as long as long as you possibly can), you will need to set aside approximately $128. per week. It might involve cutting costs in other areas, but it beats making car payments for 5 years, and think of the interest you’ll save.
4. Track and trim your expenses. Go through your monthly budget and see what you can eliminate or cut back on. You may be able to live with a haircut every 6 weeks instead of 4, or get up just a bit earlier and eat breakfast before you leave for work instead of stopping off for coffee and a doughnut. Your wallet and your waistline will be the better for it.
5. Most importantly, stick with it. If you mess up, don’t beat yourself up. Vow to do better next paycheck. We all falter occasionally, but success comes to those who keep trying.

Most people would admit that saving for the long haul instead of feeling the instant gratification of buying the latest gadget is tough, but the rewards outshine any fleeting joy you may feel. True satisfaction comes with the security of knowing your future is set, and nothing beats that!
  
It's a Good Life!!!
Greg Novak MBA
NMLS # 329079
Vice President / Partner
American Mortgage
Cell - 386-846-6686
Office - 386-756-8228
Fax - 386-756-8108
Website - www.AmericanMortgageNow.com

Oh, by the way, If you know someone who is thinking about buying or refinancing a home, please give me a call with their name and number, I will be happy to follow up with them for you.

FLORIDA- American Mortgage Loan Services, Inc. - NMLS Company ID 330596