To find money to invest for your future, you need to make sure
that your outgoing expenses are less than the income that you
are receiving. You need to develop an excess that you can have
free to invest.
Now before you start to think….”well I don’t
have any excess left…if I was earning more
money….then I would have some free”. Let me dispel
this myth…and tell you that it is a known and excepted
fact that the amount of money that people earn has little if any
bearing on whether or not they have an excess left to invest.
The only way to create an excess it to spend less than you earn,
instead of spending all that you earn.
Even doctors and lawyers, who earn well over $100,000.00 per
year, often end up at retirement with little more Net Worth than
factory or office workers.
Net Worth is calculated by deducting the value of all the
liabilities or loans you have from the income-producing assets
owned to give you the net value of your income-producing assets.
Why aren’t high-income earners retiring wealthy? Why
don’t they end up with a greater Net Worth than someone on
a low income? It is quite simple. Human nature seems to dictate
that whatever anyone earns….they spend….some even
spend more than they earn and charge it on their credit card.
The higher your income grows…the more you spend and the
only way to get out of this cycle is to realise that it is
happening, and make a concerted effort to reverse this
habit….and to begin reducing your expenditures so that you
can free up money to invest.
The best way to do this, is to try the 20/80 plan. This plan
simply means that as soon as you receive your pay….you put
aside 10% for God, 10% of it for investment….and then use
the other 80% to live off of. Put aside the 20%, and then pay
all the bills and do the grocery shopping….and then after
that whatever is left over you can spend.
Most people do it the wrong way around…they pay the bills,
do the shopping and spend what is left over, never leaving any
left to save or invest. By taking the investment money out first
you will alleviate the temptation to spend it.
The road to wealth is not determined by how much you earn, but
by how you utilise the income you have and how much you save and
invest.
You need to take control of your finances. One of the best ways
to start having more control over your money is to find out
where it has all been going, and then amend your spending habits
to allow you to live within the 20/80 plan.
If you write down a list of your monthly net income, then in
another column write down a list of the essential items that you
have to spend money on. You should be able to work out an
average for telephone, gas, electricity, insurances and rates,
from your previous bills. Work out an average of how much is
spent on grocery shopping and petrol. If there are any other
necessary utilities include them as well. Then deduct the second
column from the first – and this will give you the maximum
potential savings for each month.
It can be quite startling how high this figure can be and make
you wonder where all the extra money went.
Another good learning experience is to simply write down for a
fortnight every dollar spent and write next to it what it was
for. You will soon find that there are a lot of unnecessary
expenses, often caused by impulse buying, where you have spent
money on items that you neither needed or really wanted, and
could easily have gone without.
When you can begin to recognise these areas, and start to
consider whether or not you are spending your money wisely,
before you hand it over, then you will be beginning to take
control over your money and are well on the way to embarking on
your investment journey, which will enable you to have a
financially secure future for you and your children.
Visit my website at To find money to invest for your future, you
need to make sure that your outgoing expenses are less than the
income that you are receiving. You need to develop an excess
that you can have free to invest.
Now before you start to think….”well I don’t
have any excess left…if I was earning more
money….then I would have some free”. Let me dispel
this myth…and tell you that it is a known and excepted
fact that the amount of money that people earn has little if any
bearing on whether or not they have an excess left to invest.
The only way to create an excess it to spend less than you earn,
instead of spending all that you earn.
Even doctors and lawyers, who earn well over $100,000.00 per
year, often end up at retirement with little more Net Worth than
factory or office workers.
Net Worth is calculated by deducting the value of all the
liabilities or loans you have from the income-producing assets
owned to give you the net value of your income-producing assets.
Why aren’t high-income earners retiring wealthy? Why
don’t they end up with a greater Net Worth than someone on
a low income? It is quite simple. Human nature seems to dictate
that whatever anyone earns….they spend….some even
spend more than they earn and charge it on their credit card.
The higher your income grows…the more you spend and the
only way to get out of this cycle is to realise that it is
happening, and make a concerted effort to reverse this
habit….and to begin reducing your expenditures so that you
can free up money to invest.
The best way to do this, is to try the 20/80 plan. This plan
simply means that as soon as you receive your pay….you put
aside 10% for God, 10% of it for investment….and then use
the other 80% to live off of. Put aside the 20%, and then pay
all the bills and do the grocery shopping….and then after
that whatever is left over you can spend.
Most people do it the wrong way around…they pay the bills,
do the shopping and spend what is left over, never leaving any
left to save or invest. By taking the investment money out first
you will alleviate the temptation to spend it.
The road to wealth is not determined by how much you earn, but
by how you utilise the income you have and how much you save and
invest.
You need to take control of your finances. One of the best ways
to start having more control over your money is to find out
where it has all been going, and then amend your spending habits
to allow you to live within the 20/80 plan.
If you write down a list of your monthly net income, then in
another column write down a list of the essential items that you
have to spend money on. You should be able to work out an
average for telephone, gas, electricity, insurances and rates,
from your previous bills. Work out an average of how much is
spent on grocery shopping and petrol. If there are any other
necessary utilities include them as well. Then deduct the second
column from the first – and this will give you the maximum
potential savings for each month.
It can be quite startling how high this figure can be and make
you wonder where all the extra money went.
Another good learning experience is to simply write down for a
fortnight every dollar spent and write next to it what it was
for. You will soon find that there are a lot of unnecessary
expenses, often caused by impulse buying, where you have spent
money on items that you neither needed or really wanted, and
could easily have gone without.
When you can begin to recognise these areas, and start to
consider whether or not you are spending your money wisely,
before you hand it over, then you will be beginning to take
control over your money and are well on the way to embarking on
your investment journey, which will enable you to have a
financially secure future for you and your children.
To find money to invest for your future, you need to make sure
that your outgoing expenses are less than the income that you
are receiving. You need to develop an excess that you can have
free to invest.
Now before you start to think….”well I don’t
have any excess left…if I was earning more
money….then I would have some free”. Let me dispel
this myth…and tell you that it is a known and excepted
fact that the amount of money that people earn has little if any
bearing on whether or not they have an excess left to invest.
The only way to create an excess it to spend less than you earn,
instead of spending all that you earn.
Even doctors and lawyers, who earn well over $100,000.00 per
year, often end up at retirement with little more Net Worth than
factory or office workers.
Net Worth is calculated by deducting the value of all the
liabilities or loans you have from the income-producing assets
owned to give you the net value of your income-producing assets.
Why aren’t high-income earners retiring wealthy? Why
don’t they end up with a greater Net Worth than someone on
a low income? It is quite simple. Human nature seems to dictate
that whatever anyone earns….they spend….some even
spend more than they earn and charge it on their credit card.
The higher your income grows…the more you spend and the
only way to get out of this cycle is to realise that it is
happening, and make a concerted effort to reverse this
habit….and to begin reducing your expenditures so that you
can free up money to invest.
The best way to do this, is to try the 20/80 plan. This plan
simply means that as soon as you receive your pay….you put
aside 10% for God, 10% of it for investment….and then use
the other 80% to live off of. Put aside the 20%, and then pay
all the bills and do the grocery shopping….and then after
that whatever is left over you can spend.
Most people do it the wrong way around…they pay the bills,
do the shopping and spend what is left over, never leaving any
left to save or invest. By taking the investment money out first
you will alleviate the temptation to spend it.
The road to wealth is not determined by how much you earn, but
by how you utilise the income you have and how much you save and
invest.
You need to take control of your finances. One of the best ways
to start having more control over your money is to find out
where it has all been going, and then amend your spending habits
to allow you to live within the 20/80 plan.
If you write down a list of your monthly net income, then in
another column write down a list of the essential items that you
have to spend money on. You should be able to work out an
average for telephone, gas, electricity, insurances and rates,
from your previous bills. Work out an average of how much is
spent on grocery shopping and petrol. If there are any other
necessary utilities include them as well. Then deduct the second
column from the first – and this will give you the maximum
potential savings for each month.
It can be quite startling how high this figure can be and make
you wonder where all the extra money went.
Another good learning experience is to simply write down for a
fortnight every dollar spent and write next to it what it was
for. You will soon find that there are a lot of unnecessary
expenses, often caused by impulse buying, where you have spent
money on items that you neither needed or really wanted, and
could easily have gone without.
When you can begin to recognise these areas, and start to
consider whether or not you are spending your money wisely,
before you hand it over, then you will be beginning to take
control over your money and are well on the way to embarking on
your investment journey, which will enable you to have a
financially secure future for you and your children.
Visit the authors web site at
http://members.optushome.com.au/dlohrere/
About the author:
Debra has spent several years researching the powerful medium of
property investment and speaking with hundreds of other property
investors. She has discovered many different strategies that
have been used and the ones that have worked best. She now
writes books and articles about property investment, goal
setting, budgeting and how to create financial security for
retirement
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