Increasing personal wealth always has to start with a plan, and the simpler the plan is, the better your chances will be of following through and making it happen.
Too many people start out motivated to make a change in their financial life, and have a super ambitious and overly complicated plan. The problem with this approach is that when things start to get a little hectic (and in life, they do), a complicated plan is just too hard to stick with. So here’s a simple plan for gaining control of your financial life and increasing wealth.
Increasing Wealth Begins With Managing What You Have
I’ve said it before and I’ll say it again…the most important step to wealth building is the first step. That step is gaining control of your current cashflow by managing what you already have. If you aren’t managing what you already have well, increasing personal wealth or cashflow won’t help you. You’ll find a way to get rid of the money that you have, no matter how much of it you have coming in. So get started by taking control of your spending using the simple “four bucket personal finance system.”
With the four bucket approach, you dissect your spending into the following four categories: 70% into expenses, 10% into giving, 10% into investing, and 10% into cash reserves. Then you allocate your earnings into each of these categories, starting with cash reserves (for emergencies), then investing, and then giving. Pay your expenses last, with the remaining 70%. Believe me, you DO have enough money to do this, it’s simply a matter of disciplining yourself.
Follow a Simple Investing Plan to Increase your Wealth
Many people don’t succeed (or ever get started) with investing because they over-complicate it. However, the most effective investing strategies are always the simplest. Choose an investing strategy: real estate (my favorite), stocks or mutual funds, and stick with it until you get good at it. There’s no reason to dabble in all three (or more), until you’ve achieved proficiency with one. However, if you get really good at one type of investment, you’ll build the confidence and the momentum that you need to adopt another.
Finally, reward yourself for being consistent in sticking with your personal wealth building plan. Too many of us are good at being hard on ourselves when we mess up, but we stink at awarding ourselves.
Set some landmarks (one month into your plan, six months, one year) and make it a habit to reward yourself for sticking with your personal wealth building plan. Have fun!
There is more…Click here to receive your free ebook on Personal Wealth Building and learn more…