Before you begin to implement the 7 steps to create financial wealth, take a look at your mindset of wealth. Financial success starts in your mind. One of the first requirements to creating financial wealth is to make a decision to be wealthy. Decide what that means to you. Give yourself permission to create financial wealth. Stop a moment and look at any negative beliefs that may have come into your mind while reading these first few sentences. Look at those beliefs and keep only the ones that empower you to make and enjoy the amount of money that you deserve.
1.Create a budget. Many people cringe at the thought of a budget because they associate it with limits and restrictions. Actually a budget allows you to see where you are spending your money and to make conscious choices about your spending. It frees you to be able to do the things you really want to do. Your budget is tool for setting your goals and reaching your goals. Begin by writing down all of your fixed expenses. Then write down everything that you spend money on for a full month. This will allow you to see where you could make different choices.
2.Have an emergency fund. Everyone should have 3 to 6 months of living expenses in an emergency fund. This money should be in an investment that is readily available and liquid. It is to be used only for emergencies such as medical, deductibles on insurance policies or other necessary unforeseen expenses. Many insurance policies have a 90 day elimination period. This emergency fund will be available to use during the period of need before the insurance company begins paying.
3.Have adequate insurance.Your insurances are the foundation to your house of wealth. It is vital to have your insurance in place to protect the assets that you will begin to accumulate. You should have auto, homeowners, medical, disability, life and an umbrella insurance policy. Find a good insurance agent to make sure that the amounts and the limits that you have are adequate. You can save money on your insurance by having a higher deductible. You have your emergency fund to pay the deductible in the event of a claim.
4.Reduce your taxes. People who accumulate wealth know how to pay less in taxes. Make sure that you are taking all of the deductions and credits that you can. Do not withhold more than you will owe. Yes, you will get it back in the form of a refund but that is money that you could have been investing and already earning money on. The most effective way to reduce taxes is to own your own home based business. When you have a home based business many expenses that you already pay such as telephone, internet access, computer and car become tax deductible.
5.Pay yourself first.Save 10% of everything you earn. Start the habit of saving 10% on a regular basis. The best way to do this is to have it done automatically every week or month. If your company offers a retirement plan, contribute up to the amount that they will match. Have that automatically come out of your paycheck. If you are self employed you can set up an automatic investment into a mutual fund. Investing just 10 % of your income will eventually help you to amass a fortune due to the magic of compound interest. If you save just 0 a month beginning at age 25 until you are 65 at a 10% interest rate, you will have over a million dollars at age 65.
6.Be a generous giver. Give 10% of everything you earn. This may sound like odd advice when it comes to creating wealth. Many of the world's wealthiest people have been generous givers. Money is not static, it is a flow. When you hoard money you stop the flow; when you joyfully give money you open the flow. Joyful giving allows you to be grateful for your blessings. When you learn how to give you open yourself to receive. You will see the 10% that you give multiplied many times over.
7.Create passive income.Passive income is generated when you have either money or people working for you. It gives you the time to do the things that you enjoy and spend your time the way you choose.You create incredible leverage. Examples of passive income are stock investments,real estate investments,vending businesses,internet marketing and network marketing businesses. It is very easy to get started in a network marketing company, just look for the best network marketing company for you. The best way to enjoy greater income is to create multiple streams of income.
If you want to create financial wealth, find a way to serve others. When you choose to do work that benefits others and your efforts are focused on giving rather then getting,you are going to eventually receive back more than you have given. The greatest levels of satisfaction and contentment are experienced by those who have found a way to serve others.