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Five Secrets For Long-Term Financial Success
By: Rhiannon Williamson
Future financial success is not a guarantee that any one of us can rely upon, no
matter how wealthy we are now or intend to become.
There are however five future proofing financial steps that we can take to
protect our current financial status, improve our future financial prospects and
secure our long-term financial success.
1) Know The Different Between Good Debt & Bad Debt
Bad debt is any debt that accrues interest month after month on outstanding
balances and includes credit card debt of course, which is now the most common
type of bad debt that we are all burdened with. Other examples of bad debt
include store card debt, home secured loans other than your mortgage and any
money borrowed from lenders dealing with high risk borrowers as they charge the
highest rates of interest and have the most restrictive and inflexible terms and
conditions.
Good debt is really only your mortgage, although some people would argue with me
and include car finance in this category even though a car is not an essential
item for most people – if we’re honest with ourselves! Good debt in the form of
your mortgage enables you to afford the roof over your head and for most of us
it is the only way we will ever be able to afford a home.
A mortgage with an attractive and affordable interest rate will of course cost
you money but at the same time it enables you to purchase a capital growth
appreciating asset that you can later sell and redeem cash from or pass to your
heirs upon death and that will be a positively tangible asset to benefit their
financial futures.
2) Get Out Of Bad Debt
Examine all of the bad debt you have and prioritize the amounts to be paid off
first by beginning with the most expensive debt in interest and charge terms.
Every month pay off as much as you can afford from your number one debt and
proceed with this approach right through every bad debt you have until you have
no outstanding amounts remaining.
Then – take on no new bad debt! Keep out of credit card and loan hell.
3) Pay Off Your Good Debt
Having worked hard for as long as it takes to pay off all of your bad debt you
can now turn your attention to your mortgage – some mortgage lenders penalize
for early repayment so consider re-mortgaging if you can get a better or same
rate of interest and you won’t incur arrangement fees, or try to arrange new
terms with your current lender that will allow you to make regular lump sum
repayments.
The shorter the life of your debt the less interest you will pay and the sooner
you will own your own home – your most significant financial asset – outright.
This will give you massive security and also free you up financially to enjoy
life to the full and save more towards your retirement.
4) Save For Retirement
Most governments of the civilized world reward their citizens with tax breaks on
retirement savings made. Furthermore many conscientious employers add to an
employee’s contribution to a works pension scheme. Find out what benefits you’re
entitled to and get a retirement savings plan in place immediately. It is never
too early to start saving for retirement.
Whilst paying off your debt is an essential step on the road to long-term
financial success, so ensuring your future is secured through saving today for
your own financial wellbeing is an essential step. After all, if you don’t look
after your best interests, no one else will.
Put as much as you can possibly afford each month into the best savings or
investment product to suit your requirements and circumstances – and start
today.
5) Protect Your Personal & Financial Assets
Insure your life, your family, your health, your business and your home – then
use the services and advice of qualified taxation and trust professionals to
find out whether there are legal and legitimate ways in which you can reduce
your overall taxation burden and your estate’s future inheritance or death
taxation burden.
Look after your personal interests today and ensure that your financial assets
are protected for life.
About the Author:
Rhiannon Williamson is a freelance writer whose many articles about onshore
saving and offshore investing have appeared in financial publications around the
world. Visit this link to read her latest articles about Offshore Investment. |
