Making Money Work for You!

By: Robert Curtis
Submitted: 2007-01-17 16:16:47
Print this article | Tell a friend | For publisher |

Rating:

 

In the book “Rich Dad, Poor Dad”, Robert Kiyosaki tells us that the principles of proper money management aren’t taught in the public schools.

I never had any courses like Money 101, or Elementary Investing 207, or Finance and Marriage 315. They aren’t offered in any schools I attended.

Anyone can achieve financial security with the proper effort and self-discipline. There are no magic formulas. Just old-fashioned values of desire and fortitude!

Look around you. Things have changed a lot in the last 50 years. The days of job security and automatic pensions are nearly extinct. If we plan to have a decent retirement experience, it is now pretty much up to ourselves to plan for, save for, and enjoy the benefits for our own labors. After all, “retirement” is no longer a matter of age, but an income level. It is a matter of financial preparedness.

Obviously, this is an extensive subject with volumes written on the details. I am only going to lay out a road map, a basic plan, to set you on the right path to planning for and implementing strategies for your financial futures. Regardless of where you are today, financially, it is critically important that you review you own situation and start to make the necessary changes, today!

In a nutshell, this is where you need to go in planning your own financial future:

(1) Assume comtrol of your own financial future. It’s your future. No one cares more about your success here than you do. It’s your responsibility, so take it seriously and take the reins to start searching out the best resources to learn what you need to know.

(2) Take your cut off of the top. Always pay yourself something, first. I’m not talking “spending” money, here. I’m talking money to save for investment purposes, to save for your future. The resource material out there is very consistent on this one. The suggestion is to save at least 10% of your earnings in an investment vehicle with a good performance record. But whatever amount you decide on, make it regular and consistent!

(3) Be consistent over time. Here is a key secret to your success. Albert Einstein once commented that “compound interest” should be considered the eighth wonder of the world. Through the principle of “dollar cost averaging”, your consistent investments over time (in spite of the ups and downs of the market), coupled with compound interest, should produce phenomenal results.

(4) Pay down your debt. A simplistic statement, but vitally important. Check into simple interest mortgages with with bi-weekly payments. Remember that the APR (annual percentage rate) is not so important as the actual interest paid! Also, a debt consolidation loan may be a good solution for you. The income freed up as a result could be used to pay down your debt and invest in your future. The main caution, here, is to not allow the temptation of extra cash to drive you into more debt.

(5) Establish the right life insurance plan. Life insurance is not exactly considered a topic of social conversation. And yet how many people do not have any life insurance? Statistics indicate nearly 50%. Of those who do have life insurance, many are underinsured. I won’t discuss the need for life insurance. It should be obvious. I will only recommend that you get adequate coverage using term insurance, leaving you money to invest in your future.

(6) Company participating retirement plans. See if the company you work for offers some form of an IRA participating plan, where they match a percentage of your pay with your own investment. If they do, then take advantage of it. It probably yields the highest dollar for dollar return on your investment. But don’t invest more than they will match.

(7) Be the primary collector of interest. Don’t be giving Uncle Sam an interest-free loan. Check your W-2 at work and only have enough taxes taken out to equal your own tax obligation, as closely as possible. Also, don’t put your own money in any “savings” accounts that don’t pay at least as much interest as the cost of inflation. Learn the “Rule of 72”. This was discovered a long time ago by Benjamin Franklin. The Rule of 72 teaches you how many years it will take your money to double. This is done by dividing the number 72 by your interest rate. The resulting number is the number of years it will take your money to double at that interest rate. For example, at 6% it will take 12 years to double your money. At 8% it will take 9 years. At 12% it will take 6 years.

(8) Professional Management makes sense. Most of us are not well versed or experienced in the areas of and opportunities for investment. The many investment funds hire professional money managers who are not paid according to “trades” that are made, but are paid according to the performance of the portfolio. That is what they do. It only makes sense to invest with those who have a finger on the pulse of the market.

(9) Have faith in yourself. Consult with people whom you trust and formulate a financial plan for your future. Success will be yours as you accomplish your dreams and work your plan!

Perhaps you may be interested in becoming a part of the financial services industry, personally earning the commissions on these mortgages, personal loans, life insurance and securities. It is estimated that the baby boomers will be rolling over $100+ trillion in retirement accounts into other investments. This is an event required by law. Someone will be earning the commissions on this event.

Want to participate?

Here’s to your future!

Bob Curtis has a bachelor's degree in Psychology, and has been writing about the elements of relationships for a number of years. He is the manager of the Essential Sunshine Association, a new website for positive relationship development at http://www.essun.blogspot.com

Article source: Expert Articles