Throughout another post, I talked briefly about the best way to get wealthy. The principle is pretty simple, really:
Maximize passive and profile income
Minimize expenses
But I must go a little deeper into how to get there from here. The greatest question most people have is "How do I start?" How can you go from no passive and portfolio income in addition to big expenses to affluent? Well the passive and portfolio income may take a little work, but the minimizing of expenses is a lot easier. So start there!
The best way to get more money is to stop throwing it away!!
Mentioned previously above, the way to wealth should be to maximize passive and profile income and minimize costs. However it's VERY hard to make any investments into your passive and portfolio income sources if you're strapped for cash from the beginning! So in order to even start building that income, it's crucial to have cash available to seize opportunities when they arise. In order to create this cash, your current J-O-B income will help get you there. But if you're spending all of it, there's no room left to purchase passive and portfolio income.
There's no better means of keeping money than to stop spending it all.
Start by listing out your expense groups. These typically include: tithe, food, restaurants, gas, household items, car repairs, house repairs, education, insurance, utilities, phone, internet, mortgage, credit cards, student loans, car repayments, medical bills, and the like. Some of these can't or maybe shouldn't be eliminated, some can be reduced, and some can be eliminated altogether!
Keep:
- Giving. This includes tithe, charitable giving, and any various other generous donations you help to make. Getting to an affluent state doesn't mean you're a tightwad! I strongly suggest keeping up with your giving habits (unless they're spinning wildly from control) and find other places of minimizing expenses.
- Education. Don't sacrifice education. The only thing that you can change is you. So invest a highly effective education! Now obviously be careful what kind of education you get and how much you spend on the item, but rarely will good education head over to waste. I'm personally not really a huge fan of "traditional education" (although it's usually necessary in buying a J-O-B and have any Master's degree myself), but specialized online courses, seminars, and real-life experience are usually much better value for your money.
- Saving. I didn't include this within the "expense" category, because it's technically not an expense. Outflow, yes; expense, not really. However I did want to mention the item quickly here. It's crucial to keep saving! Retirement (especially should you get matched 401k donations from your employer), Roth IRAs, and general savings are crucial. However, once you've reached a good level of savings, I'd advise using that money to help the "eliminate" category below. And of course, these savings help build the foundation needed to create your passive and profile income.
Reduce:
- Consumables. This includes food, restaurants, gas, household items, and utilities which includes phone and internet. Do you need to eat out every time? Or buy the most recent toy, tool, gadget or other doodad for the house? Do you really should be driving an Excursion rather than a Hyundai? Or go do Disney yearly? This is probably one of the greatest areas to save funds on. Sure some of the other categories such as food won't change much, but there absolutely are ways to reduce how much you spend on the item, such as buying things that you need when they're on sale (if you get something you don't require, you just got SOLD), or maybe buying off-brand items. There are entire blogs focused on this though. Or how about cutting back on how much you spend for your smartphone? Or negotiating the price of your internet service (yes, which is definitely possible!). I'm not advocating rice and beans everyday and never going on vacation! There is a time and extremely important place for so much. But try to be more conscious about your expenses. There are so many areas in this category where a bit savings can add up quickly. It's worth getting a very close look on.
- Repairs. Sure, you can't control when things breakdown. But you can help alleviate problems with these repairs by preventative maintenance. I'm suggesting you spend a tad bit more on preventative maintenance which supports cut down on entire repair bills, be it for ones car, house, or otherwise. Nothing like being stuck with a $3,000 engine repair due to not checking your oil...
Eliminate:
Okay, this is where it could get painful for several you.
- Car repayments. I'm just going to help rip this band-aid away from. Car payments are not a necessary evil! It is possible to purchase a car - even if a cheaper and somewhat older car - with cash. Interest is one of the most painful ways of losing money. Partly because it's so invisible, partly because for a lot of it feels like they're accomplishing "the right thing". "But a brand new car has a warranty and won't cost you anything for repairs." Though true, it certainly does not outweigh the price tag on owning a new car and losing on the depreciation and interest. Trust me, I've run the numbers and can be more than happy to show them to you! "But I got it at such a good deal!" I bet I could get an even better deal used plus a couple years older. Every time. "I can't afford to purchase a car with cash." True it takes a modest amount of saving. I currently put aside a little money every month in to a savings account (actually any bond-based mutual fund) in addition to call it my "car payment". Except rather than paying a lender, I pay myself. In fact, you can't afford TO purchase a car with a loan. It's hard, it's painful, but car payments are one of the greatest wastes of money. Pay off your current car or sell and buy a cheaper one, do whatever it takes to reduce that car payment. And then keep it that way!
- Credit card costs. Ouch. Another biggie. Although this one is more simple. If you don't have cash in the bank, you can't pay for it. Don't buy the item. I'm still amazed that people are willing to pay 18% interest to have it now. It's not like you're not going to pay for it at some point in time! You still have to pay for it, now you're just adding 18% per year onto that! My wife and I still use credit cards, but have always paid it off every month. Stop overusing your credit cards!
- Mortgage. Surely not! It's impossible to pay back a house! Well... no, not exactly. It may take awhile, but it certainly is possible to pay it off. We were debt free for about a year after paying off our student loans. We were still paying rent at that time, but what an amazing feeling it had been to be completely debt free! We're eager to reach that state again, and as soon as we possibly can. Imagine also the possibilities of being able to save and invest everything that was going to your mortgage once you pay it off!
- Student loans. Similar to the home loan, it's certainly possible. Also since the interest rates are even higher than mortgage rates, it's much more important to get these repaid quickly.
- Home equity loans or other personal loans. If you haven't obtained my drift yet, let me be a tad bit more explicit... Get out of debt immediately!
Summary
The easiest way of getting more from an income is reducing or eliminating several expenses as possible. I'm no advocate of living blank bones, but I do think most people have quite a number of areas that can possibly be reduced.
Avoid loans when they continually suck money far from you.
I'm sure you probably won't like all of what you heard. But if you want to learn more and keep working to building wealth, come over to http://www.buildingupwealth.com and join the journey!
Article Source: http://EzineArticles.com/?expert=Joel_Palmer
Article Source: http://EzineArticles.com/8625607
Maximize passive and profile income
Minimize expenses
But I must go a little deeper into how to get there from here. The greatest question most people have is "How do I start?" How can you go from no passive and portfolio income in addition to big expenses to affluent? Well the passive and portfolio income may take a little work, but the minimizing of expenses is a lot easier. So start there!
The best way to get more money is to stop throwing it away!!
Mentioned previously above, the way to wealth should be to maximize passive and profile income and minimize costs. However it's VERY hard to make any investments into your passive and portfolio income sources if you're strapped for cash from the beginning! So in order to even start building that income, it's crucial to have cash available to seize opportunities when they arise. In order to create this cash, your current J-O-B income will help get you there. But if you're spending all of it, there's no room left to purchase passive and portfolio income.
There's no better means of keeping money than to stop spending it all.
Start by listing out your expense groups. These typically include: tithe, food, restaurants, gas, household items, car repairs, house repairs, education, insurance, utilities, phone, internet, mortgage, credit cards, student loans, car repayments, medical bills, and the like. Some of these can't or maybe shouldn't be eliminated, some can be reduced, and some can be eliminated altogether!
Keep:
- Giving. This includes tithe, charitable giving, and any various other generous donations you help to make. Getting to an affluent state doesn't mean you're a tightwad! I strongly suggest keeping up with your giving habits (unless they're spinning wildly from control) and find other places of minimizing expenses.
- Education. Don't sacrifice education. The only thing that you can change is you. So invest a highly effective education! Now obviously be careful what kind of education you get and how much you spend on the item, but rarely will good education head over to waste. I'm personally not really a huge fan of "traditional education" (although it's usually necessary in buying a J-O-B and have any Master's degree myself), but specialized online courses, seminars, and real-life experience are usually much better value for your money.
- Saving. I didn't include this within the "expense" category, because it's technically not an expense. Outflow, yes; expense, not really. However I did want to mention the item quickly here. It's crucial to keep saving! Retirement (especially should you get matched 401k donations from your employer), Roth IRAs, and general savings are crucial. However, once you've reached a good level of savings, I'd advise using that money to help the "eliminate" category below. And of course, these savings help build the foundation needed to create your passive and profile income.
Reduce:
- Consumables. This includes food, restaurants, gas, household items, and utilities which includes phone and internet. Do you need to eat out every time? Or buy the most recent toy, tool, gadget or other doodad for the house? Do you really should be driving an Excursion rather than a Hyundai? Or go do Disney yearly? This is probably one of the greatest areas to save funds on. Sure some of the other categories such as food won't change much, but there absolutely are ways to reduce how much you spend on the item, such as buying things that you need when they're on sale (if you get something you don't require, you just got SOLD), or maybe buying off-brand items. There are entire blogs focused on this though. Or how about cutting back on how much you spend for your smartphone? Or negotiating the price of your internet service (yes, which is definitely possible!). I'm not advocating rice and beans everyday and never going on vacation! There is a time and extremely important place for so much. But try to be more conscious about your expenses. There are so many areas in this category where a bit savings can add up quickly. It's worth getting a very close look on.
- Repairs. Sure, you can't control when things breakdown. But you can help alleviate problems with these repairs by preventative maintenance. I'm suggesting you spend a tad bit more on preventative maintenance which supports cut down on entire repair bills, be it for ones car, house, or otherwise. Nothing like being stuck with a $3,000 engine repair due to not checking your oil...
Eliminate:
Okay, this is where it could get painful for several you.
- Car repayments. I'm just going to help rip this band-aid away from. Car payments are not a necessary evil! It is possible to purchase a car - even if a cheaper and somewhat older car - with cash. Interest is one of the most painful ways of losing money. Partly because it's so invisible, partly because for a lot of it feels like they're accomplishing "the right thing". "But a brand new car has a warranty and won't cost you anything for repairs." Though true, it certainly does not outweigh the price tag on owning a new car and losing on the depreciation and interest. Trust me, I've run the numbers and can be more than happy to show them to you! "But I got it at such a good deal!" I bet I could get an even better deal used plus a couple years older. Every time. "I can't afford to purchase a car with cash." True it takes a modest amount of saving. I currently put aside a little money every month in to a savings account (actually any bond-based mutual fund) in addition to call it my "car payment". Except rather than paying a lender, I pay myself. In fact, you can't afford TO purchase a car with a loan. It's hard, it's painful, but car payments are one of the greatest wastes of money. Pay off your current car or sell and buy a cheaper one, do whatever it takes to reduce that car payment. And then keep it that way!
- Credit card costs. Ouch. Another biggie. Although this one is more simple. If you don't have cash in the bank, you can't pay for it. Don't buy the item. I'm still amazed that people are willing to pay 18% interest to have it now. It's not like you're not going to pay for it at some point in time! You still have to pay for it, now you're just adding 18% per year onto that! My wife and I still use credit cards, but have always paid it off every month. Stop overusing your credit cards!
- Mortgage. Surely not! It's impossible to pay back a house! Well... no, not exactly. It may take awhile, but it certainly is possible to pay it off. We were debt free for about a year after paying off our student loans. We were still paying rent at that time, but what an amazing feeling it had been to be completely debt free! We're eager to reach that state again, and as soon as we possibly can. Imagine also the possibilities of being able to save and invest everything that was going to your mortgage once you pay it off!
- Student loans. Similar to the home loan, it's certainly possible. Also since the interest rates are even higher than mortgage rates, it's much more important to get these repaid quickly.
- Home equity loans or other personal loans. If you haven't obtained my drift yet, let me be a tad bit more explicit... Get out of debt immediately!
Summary
The easiest way of getting more from an income is reducing or eliminating several expenses as possible. I'm no advocate of living blank bones, but I do think most people have quite a number of areas that can possibly be reduced.
Avoid loans when they continually suck money far from you.
I'm sure you probably won't like all of what you heard. But if you want to learn more and keep working to building wealth, come over to http://www.buildingupwealth.com and join the journey!
Article Source: http://EzineArticles.com/?expert=Joel_Palmer
Article Source: http://EzineArticles.com/8625607
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