Personal Finance Planning – Many people believe that having an open line of credit is a free ticket for spending more money. But getting a new credit card with a $2000.00 spending limit does not mean you now have $2000.00 in your wallet. What it really means is that you have the opportunity to borrow all or part of that amount against future income which you haven’t even earned yet. While this may be the way some governments operate, you will never gain financial independence by spending tomorrows dollars today. The solution to this mindset is quite simple really. We recommend that you get into some degree of personal finance planning in order to get yourself on the right path financially. We list a few ideas below to help you get going.
Let’s Get Started On Your Future
If you have not yet begun planning for the future, now is a great time to start. It is very difficult to set course for the future if you’re not sure where you are right now, so we recommend you first take a look at your credit report as well as your credit score. As we have stated in our earlier annualfreecreditreport blog posts, viewing your credit report is allowed by both state and federal laws. You can request an annual free credit report once every 12 months from each of the three consumer reporting agencies, Equifax, Experian and TransUnion. This step will only takes a few of minutes of your time and is an essential first step with personal finance planning.
Save Money Every Payday
Pulling your credit report only tells you where you are right now financially, putting away money that you do not touch begins the process of financial independence. Remember it isn’t how much money you earn, its how much money you keep. Unbelievably there are star athletes that have earned tens of millions of dollars that are dead broke. And then there are people that have never earned over $30,000 a year that retired multi-millionaires because they invested wisely every single payday.
When it comes to personal finance planning, there a many choices where to put your savings, here are a few ideas:
Passbook Savings Account. Savings accounts currently pay less than 1 percent interest which is less than the rate of inflation. They are considered safe but it is way too easy to pull money out of whenever you are short on cash. Having a passbook savings will make life more comfortable but will never make you rich.
Under Your Mattress. There seems to be a growing distaste for big business and nosey governments. People both rich and poor are keeping a growing amount of cash stashed around the house. While this is a nice short term solution, it would be unwise to keep your retirement money in such an unsecured location and not collecting any interest on the money whatsoever.
CD Deposits. With Certificate of Deposit accounts you lock your money away for a certain amount of time in order to gain higher interest rates. These accounts are safe but the interest rate may or may not equal the rate of inflation. Like passbook accounts, CD deposits will make life more comfortable but will never make you rich.
Individual Stocks and/or Mutual Funds. Do what Warren Buffet does and you can’t go wrong, right? Right! Or is that wrong? Hmm. Bottom line here is a lot of people made money in the market and a lot of people lost money. Invest in stocks if you do your research and believe you know what you are doing, otherwise invest in mutual funds and trust in others that know what they are doing. If you invest in the market over decades, there is a very good chance you will retire with a certain degree of wealth.
Real Estate. Once you have enough capital to diversify into real estate, things get much more interesting. we are not talking about buying a house here, we are talking duplexes, triplexes, fourplexes, apartment units, commercial property etc. With these types of properties you will be earning cash flow each and every month that you can re-invest into other areas. Plus, as property values go up so does your net worth. Odds of getting rich with real estate over time are very good.
Stacking Gold and/or Silver. Do a search on YouTube for the keywords “stacking silver”. It could be life-transforming. Everyday people who would not ordinarily put any money away on a regular basis are buying up silver like there is no tomorrow. There’s something about holding on to a new 1 ounce bar of silver that hits a cord with people. You know that your hard earned money went into something special and now you are holding it in your hand. One episode of “The Pawn Stars” had a guy come in that started saving silver when it was around $5 an ounce and then sold it on the show for $38 an ounce for a cool $110,000! The key here is buy some every payday, put it in a safe location, and don’t be tempted to sell until the price of silver rockets.
Personal Finance Planning
Personal finance planning is only hard if you don’t do it at all. Get your annual free credit report, pick an investment idea or two from the list above and get motivated. Start today, start now! Open up an online Scottrade Account, visit Silvertowne.com and pick up a few ounces of silver, you can thank us later.