• ParulB

It is easy to start small and create wealth

I am in a profession in which I look at people’s bank statements and credit cards every working day! I am an accountant and I have looked at people’s books for more than 20 years now. And I can say that no matter whether you are making $40K a year or $400K a year, most people cannot make it past a month if they stop getting paid.

That is a terrifying thought in these times. A lot of people have been laid off and there is a lot of uncertainty about the financial future of our country and our world.

Most people freeze when they think about their financial future and they see no way in which they will meet their financial goals and their financial freedom. It seems that they are doomed to a life of financial anxiety and poverty in retirement.

No matter what your situation, you still have the option of taking action today rather than procrastinating. I seriously believe that wealth creation is a matter of strict discipline. In this article I will give you three easy steps which you can take now to have a more secure future. This is not financial advice and is only general advice. It is not based upon your personal situation.

1. Start Saving: Wealth creation depends upon your ability to save money first. In order to be successful, you have to start thinking like the rich. The rich plan their expenses and their investments. They think in terms of budgets and financial goals. This is just like saying that you will workout 30 minutes every day. You can set such a goal about your income. You can decide to save 10 percent of your income every time you are paid. Of course, many people will not be able to achieve this outcome. I will put down a few solutions below which will help you achieve your goals.

2. Tear up your credit card: Don’t spend the money you do not own. Do you know that you pay an interest of around 20% on outstanding balance in days when it costs you 2.9% to fund a home loan? Is impulse shopping worth it? Let’s say you owe $10,000 on your card. If you don’t pay it straight back, you might end up paying upwards of $35,000 over the life of the debt. Check out this calculator at MoneySmart. https://resolveyourdebt.com.au/?gclid=EAIaIQobChMIoqrul6SL6wIVmLaWCh15sw2vEAAYBCAAEgInivD_BwE It would be worthwhile to transfer your debt to a low interest credit card and repay that debt in priority to stop the outflow of your hard earned money on interest charges.

3. Start eating most of your meals at home: We all love takeaways and restaurants. But do you know how much they cost? Let us suppose you drink one coffee a day from your local café and one takeaway lunch every day. That is likely to cost you $15 everyday in addition to your grocery shop. Over period of 7 days, it adds up to $105 and over a year, $5,475. Over 20 years, it will cost you $110,000. This calculation does not include any interest paid over the money. Obviously, if you do not change your habits, over 20 years, your coffee and lunch will cost you more than $20 a day.

Is it possible to swap your meals with home made meals at least on 6 days? All it needs is some organisation.

I know many of my café owner friends will not like this suggestion. I am aware that it will be inconvenient and a lot of hard work for busy parents, but this could easily be the difference between owning your own home and living in a rental property. It can be the difference between financial anxiety and financial freedom.

To summarise, creation of wealth is like a habit. It is probably like being able to work out every day. But once you do it daily, you see the results in 6 months. Similarly, once you start putting some money aside every time you are paid, in six months, you will start seeing the results.

4 views0 comments