Pattie Lovett-Reid: 8 steps toward wealth creation
I believe everyone deserves a financial plan regardless of age, income or financial status.
I don't like cookie-cutter approaches with one-size-fits-all recommendations. We are all different. Rarely are two people at an identical financial starting point. The reality is our plan acts as a roadmap to our financial success. It’s very hard to achieve goals without a focus and a destination.
The wonderful thing about creating a plan is that it’s your plan, your goals and you own it. If it matters enough to you, you will make it happen. No one cares more about your money and your financial future than you.
Let's do this, here is my eight-point plan to wealth creation.
1.Be very clear on how you are spending your money. We all know how much money we have coming in; however, rarely do we really know what we are spending it on.
2.Set some financial goals that mean something to you. Something you can get excited about that will alter your spending habits.
3. Prepare for the unexpected by having insurance. Insurance is best if never used and invaluable if you need it.
4. Beware of credit card abuse. Time and compounding works well if you are saving money (earning income on income) and destroys your financial plan if you owe money.
5. Start saving. Tuck money away systematically by paying yourself first.
6. Build an investment portfolio. Systematic investing takes guess work out of trying to time the market.
7. Create a will. This will allow you to choose how your assets are distributed versus the government stepping in and deciding.
8. Update your plan. Income levels change, family dynamics change, tax laws change, etc. Review the plan at least annually.
Sadly, I've seen more than one household financially destroyed simply by spending more than they earned, from never tucking a little emergency money away, and believing life would never throw them a curveball – but sadly it did.
Bottom line: Everyone needs a little financial flexibility and absolutely everyone needs a financial plan.
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