Whether you are a millionaire, thousandaire or hundredaire chances are you want more money. It does not matter which place you are in at this particular time in your life because how you handle your money will determine where you end up in the future. Having more money and making good financial decisions is a step by step process that takes some dedication. It is very easy for the millionaire and the hundredaire to switch places. Just a few good or bad financial decisions and your life completely changes. Here are a few easy steps that can help you keep your caviar dreams and champagne wishes.
Set goals: Most people know they want to be wealthy but they have not set clear goals on how to get there. Meet with a Financial Advisor, write down your goals and stick to them. Making a commitment to yourself to control and manage your finances will help you get more and keep more of your money.
Get organized: If you are already a millionaire (or if you have been one) you know that keeping up with all your accounts, investments and financial papers can be difficult. Again, this is where a Financial Advisor, CPA, Business Manager or Personal Assistant can help. Put important papers in a fireproof box or safe. Have automatic withdrawals to your retirement, investment, savings and bill pay accounts.
Pay bills and have a realistic budget: Just because you make a million doesn’t mean you have to spend a million. Putting yourself on a budget is not for poor people. It is for wise people. Set some limits and show some restraint. Try spending 20-30 minutes a day reviewing your finances. Take one day a week to spend a few minutes more and pay bills. Do not wait to do this once a month. Once a week breaks up the pressure and keeps you on time. If you wait until once a month it will be overwhelming. Not to mention some of the bills will probably be late. Utilize online bill pay; it can be a life saver for a busy person.
Good spending habits and credit: Knowing when to make a purchase is the difference between good financial decisions and bad ones. Also knowing when to use other people’s money (credit) can help you stick to your goals as well. Before making a purchase ask yourself, “how does this affect my finances?” “Is there a better time to make this purchase?” If you decide to use credit, pay it off as soon as possible. Once you add in the interest you will pay it may not be such a great deal after all. Credit cards are not bad if you use them properly.
Have different account: There are times when I have suggested to clients to have as many as 6 bank accounts. Checking, Long-term savings, short-term savings, gift account, fun account and travel account. The checking account is for paying bills. The long-term savings is for purchases a year or more away like a down payment for new house. Short-term savings accounts are for purchases of less than a year like jewelry, electronics or a motorcycle. The gift account is for people who want to borrow, your tithes, your charities and donations. Do not give away more than you can afford but remember what you put out comes back to you. The fun account is your discretionary income. Have fun with it. The travel account is for people who travel often for work or business. It can also be used to save for a family trip. In the next few weeks I will elaborate on this whole topic. I will illustrate the reasons for breaking up your money into several different accounts.
Transfer risk: Make sure you always have the insurances you need. One catastrophic event can ruin you financially. When you transfer the risk by having car, home, life, health, umbrella and business insurance you protect your financial dreams.
Have multiple streams of income: Having multiple streams of income is like an insurance policy for your bank account. When one industry is down the other will be up. Have a mix of active, passive and business income to help you reach your financial goals and keep your millionaire status. Turn your hobby into income, start an internet business, invest in real estate or invest in someone else’s business.
By following these tips you will be able to save, accumulate, invest and profit 15-20% more money per year.
Remember living your Presidential Lifestyle is not about keeping up with the Joneses, impressing others or spending all the money you earn. It’s about creating your perfect lifestyle in the most enjoyable, time and cost-effective manner.
Having a Financial Advisor…Now That’s Presidential!