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In Sickness And In Wealth
By: Tom Justice
For Starters
When asked to name an effective way of obtaining wealth, a common answer is:
"Invest". What is the problem with this answer? Well, the majority of
respondents have very little or no money in their savings account. I see the
beginning of wealth building in a different light. A saying that almost everyone
knows but nearly no one applies is: "A penny saved is a penny earned". In
today's culture it is definitely much easier to spend money than it is to save
it. The average American is exposed to 247 advertisements in one day! Less than
5% of Americans have at least $3000 in savings and no debt. It is no wonder that
most consumers struggle with saving money or grasping the concept of building
wealth. We are mentally flogged with television and radio commercials, newspaper
and magazine ads, billboards, signs, posters and even conversations. Whatever
the method, it all serves one main purpose - to take your money and make it
theirs.
Unveiling the Mystery
So with all those statistics and all that advertising, how in the world is it
possible to build wealth? Well consider yourself ahead of the game already. By
reading this article you are opening your mind to ideas and concepts which could
help you to begin the process which is more than can be said for most people out
there. A house starts with a single brick and the same is true with wealth
building. You have to start with what you can and keep adding to it.
Why not jump in to stocks, mutual funds or other investments right off the bat?
Life will continue to happen whether you plan for it or not. So plan for it. You
must start with a lump sum of money in your savings account which has been
referred to as an "emergency savings". A good figure for this is $1000. You MUST
pay your savings first, before anything else. If you do not, your savings will
not grow (or it may not happen at all). This extra money will act as a soft
landing for any financial falls that can and will occur while you pay down other
debts that are road blocking your way to building wealth. You must realize
though; this money is first priority but can not be touched - ONLY for
emergencies.
By following these 2 steps:
1) Stocking up your savings with $1,000 and then
2) Eliminating extra debts (with great fervor), you will prepare yourself for a
much easier road to building wealth.
Making it Happen
You have to take action now or this whole savings thing will not happen. First,
get a savings account. If you have one, find out what the interest rate is. Many
have something like 0.25% to 1% (WHOOPEE!). Remember that you are not trying to
make all your money in interest right now but since the money is going to sit
you may as well look around. It is possible to land up to a 3-5% interest rate.
Another option is a money market account to get a good rate although
restrictions sometimes apply for things like early withdrawal fees and keeping a
minimum amount in the account at all times. Secondly, as I stated earlier, take
your savings off the top on payday. You have to make a painful change as well
though. You may have to sacrifice some things to get that initial $1,000.
This could mean no eating out or temporarily cutting out an expensive hobby. You
also might want to try changing your phone company or downgrading your cable
package. I hate this next idea but it is for a good cause: Drop your credit card
payments below the minimum (JUST FOR NOW). Anyway, you get the idea. Cut some
here - cut some there. Now, take all the figures you cut and add them together.
This is what you will put in to your savings account until you reach $1,000.
See, when the average person feels like they are getting ahead or even staying
even, a setback occurs and sends everything spiraling downward. This is the hard
part of building wealth and it is just the beginning (the first brick). However,
without this extra money in savings you will tread water until you eventually
drown, so stop thinking about it and start acting on it today.
About the Author:
Tom Justice is the webmaster for Clean Credit Online and does all the designing,
marketing, SEO and maintenance for the site. He has a passion for personal
finance and how the economy and consumers are affected by money. To see how you
can use Clean Credit Online to help you with your personal finances please visit
http://www.cleancreditonline.com |
