The avenue to wealth in tough times call for some refocusing on certain areas in your financial life. Here's the situation.
The government has financial problems (in case you didn't know). Their bills are more than what's coming in. What are they going to do? It will be a combination of cutting their expenses, i.e. reduce social security payments, medicare costs, welfare, etc. and increasing their revenues, i.e. tax you, borrow more money, etc.
Their irresponsible financial decisions will affect you one way or another. Whether it's the unstable economy, less entitlement handouts, or more taxes, there is no greater time to start focusing on being self-sufficient, independent, or otherwise insulated from your governments.
You can pay a little more attention to personal expenses, you can teach your kids (and yourself) to be financially literate, and you can do things to keep the government hands from picking your pockets (lower your taxes).
So, here are some tips to help you create wealth now.
"Avenue To Wealth" Tip 1
This tip has got to be the most powerful tip for a kid (or even an adult) to see. It's simple financial intelligence. And, this goes to show you that in order to build wealth,
you do not need a lot of money to start with. Try this yourself: double $10 until you reach a million dollars and count how many times it took. Now, double $100 until you reach a million dollars. Notice the $100 turned into a millio
ONLY 3 times faster. This goes to show you that the amount of money you have to start with has very little effect on whether or not you become a millionaire!
You just need to realize that the real power comes further down the "doubling" road. So, DO NOT ruin your ticket to financial freedom by spending what you've built half way through your plan.
If you're going to build wealth in good times or bad, you need to incorporate (right now) the POWER of compounding.
You might have already heard about the story of the red paper clip, but for those of you who didn't, it is a perfect example of how you can build wealth with practically nothing, IF YOU EXPLOIT THE POWER OF COMPOUNDING.
The story was about a young man who found a red paper clip. He built a story around that red paper clip telling his (website) visitors that he was planning on trading up this paper clip. It had great potential of becoming popular and, thus, more valuable than just it's initial cost.
What he did was bartered with others and finally traded it for a pen (I believe. The items are not important, but the lesso
IS). Then, he bartered more and traded the pen for a cup...the cup for a canister...the canister for an electric clock...the clock for...
Well, you get the picture. He caught the attention on some talk shows and made guest appearances. This popularity put his little tow
"on the map," as they say. The town benefited from all this publicity. Soooooooooooo, what did he get from reinvesting the items he had (at one point, he had a snow mobile worth hundreds). Did he cash in that snow mobile and spend the $900? Nope. He kept reinvesting it.
Here's the jackpot:
The city gave him a HOME where he could live rent free...all from a little red paper clip!
Watch the
video on my site to see the AMAZING power of a penny.
"Avenue To Wealth" Tip 2
This tip relates to personal expenses. And, before you discount this controversial subject, I urge you to be as objective and fair minded as possible.
Paying for an advanced degree, i.e. Masters Degree, may be a BAD investment.
You read that correctly. According to an article found in Forbes Magazine (Special Issue: 2011 Edition), although that degree will probably translate into a high salary, it also comes at a HIGH COST. Cost such as a high tuition (often paid for with debt), plus a year or more of lost earnings.
The article goes on to show you how a hard working Medical Doctor will only make slightly more spendable income than a plumber over their lifetime.
Averaging data from different states, the article says a doctor's peak earnings would be about $185,900, and the plumber's $71,700. After factoring in the actual earning life of both professions (since doctors must go through more schooling and residency) and related expenses, you'll be stunned at the net results!
Since the doctor also must spend more money in tuition, student loan interests (unless you're wealthy to begin with), and income taxes than the plumber, the net result is that the doctor will come out with only $500 (adjusted for inflation adjusted) more a year of spendable cash during his/her adult life than the plumber!
Pursue your education if you love studying the subject, and NOT FOR MAKING GOOD MONEY.
"Avenue To Wealth" Tip 3
Homeowners, here's how you can possibly find hundreds of dollars... by
challenging your property tax.
Depending on which state you live in, experts estimate that 30%-60% of tax assessments are OVER-assessed. Middle- and lower- income taxpayers are the most over-assessed. The sad thing is that only about 5% actually challenge their assessment. Just by doing some homework and some preparation, most of the challengers won at least a partial victory.
Property tax assessors are sometimes just part-timers with little training. These folks do a lot of guesstimating that give your property an inaccurate value, thus, over-assessing your property tax.
Watch the video on my site for tips on what you can do to save hundreds, or even thousands on property taxes:
"Avenue To Wealth" Tip 4
Also relating to personal expense for parents, as well as kids funding their own education, is the fallacy of prestigious degrees.
Degrees from big name universities are NOT necessarily valuable.
The reality is graduates do well in life because of talents, skills, work ethic, ambition, initiative, and the like. All this can be picked up outside of a prestigious (and expensive) classroom.
A strategy offered in the same Forbes article mentioned above is to have your child attend 2 years at a community college and then switch to a state university. This will literally save tens of thousands of dollars.
Cheap Colleges
Beerea College
Cooper Union
Deep Springs College
U.S. Military Academy
"Avenue To Wealth" Tip 5
With the world being electronically connected, markets have become more volatile than ever. Bear markets, like the one in 2008, have become vicious. Sideways markets have lasted longer. It is critical to your investing success to
find a trading system that is comfortable for you and one that you believe in. It needs to make sense to YOU so that you can take gains and losses without hesitation and second guessing.
Usually, this calls for a system that leaves the guess work out and the only way to do it is through a mechanical trading system. The system needs to be one that, once learned, you can trade on your own. Independence is what we want, right?
There are many proven trading systems out there, but the weakest link to any system is the trader. Since investing is a marathon and not a sprint, you will get the best results you possibly can if you align yourself with a comfortable strategy.
I must emphasize again, it is important to be comfortable and consistent because if you are not in control of yourself, no system will make you money.
Financial security will come to those that take responsibility of their future.