3 Smart Money Tips you can implement today to help you in your quest for wealth creation.
What’s the point when I’m up to my eyeballs in debt I hear you say?
Well these tips apply just as much to you as they do to those who aren’t indebted as they will help anyone improve their financial situation & ultimately create wealth.
These smart money tips will help end your paralyzing doubts and help you conquer your dreams of wealth & financial freedom.
1. Think Big – Avoid the “Penny Wise, Pound Foolish” Trap
Going without your morning coffee from your local coffee shop to save a few measly bucks isn’t going to have a huge impact on your financial situation and isn’t really a smart money move.
Rather identify the big ticket items like you car repayments for example.
If you live in a city with a reasonable public transport system imagine how much extra disposable income you would have by not having to make your monthly car installments, insurance premiums, maintenance costs as well as parking fees & traffic fines.
Apart from these costs, a car is a depreciating asset that chomps a massive hole in your disposable income so getting rid of it will set you up nicely to start creating some wealth rather than eroding it.
Rather than cutting back on inexpensive pleasures, it’s important to take the right decisions to curb your spending in a big way so that it has a real impact on your disposable income.
This will help you to start making money on your money and adopt the right mindset when it comes to being smart about money & creating wealth.
Don’t get me wrong, saving pennies is a good habit but it may take so long to see any benefit that you could get demoralised and just give up.
Here are some easy money saving tips that you can implement today to get started with your wealth creation plan.
2. Unleash the Power Of Compound Interest To Create Wealth
Your goal should be to invest at least 5% of your monthly income so that you can unleash the power of compound interest to start working to making you wealthy.
Example of compound interest at work;
- If you had invested R500 every month in a recurring interest account (compound interest at 8%) 5 years ago…
- It would now be worth R37,483
- After 10 years it would be worth R93,193
- If you had increased the amount by 10% every year, the net worth of your capital amount would have increased drastically.
Based on this illustration you would be crazy not to put something away every month – this is basic wealth creation.
For real wealth creation you must ensure that you are making as much money from your money as possible
The same principal applies to paying off a mortgage…
By paying just R100 a month more than the minimum amount you have to pay, you could reduce your payment period by a year or more. An additional benefit is that it’s effectively a tax-free saving.
3. Automate Your Monthly Money Receipts & Payments
By ensuring that your monthly money flows are automated you don’t get to see & feel the money passing through your hands.
What this means is that by not getting your monthly salary in your hands you’re not tempted to skim some off the top to go and buy that new shiny thing you’ve had your eye on.
Automating your payments also helps you avoid the temptation of skipping paying a creditor or not contributing that monthly amount to your savings account which helps you pay off your debt quicker & start creating real wealth sooner.
Instruct your company to pay at least 5% of your salary directly into your investment account before you even see it
Remember making insurance payments or to creditors, where you’ve already received the benefit, are all grudge payments which are naturally hard to self motivate, but with automation, the decision is taken out of your hands.
This means that you don’t have to go through the “grudge payment” turmoil in your mind as they’re processed automatically which means that, before you know it they’ll be paid off and you can start building your financial empire.
This strategy has worked for many especially Marcus Garrett who paid off more than $34,000 worth of credit card debt as well as a debt consolidation loan that he misused.
Garrett also ensures that his retirement savings contributions are automatically taken care of since he knows he wouldn’t pay over the money on his own.
In conclusion please remember that Rome wasn’t built in a day just as you aren’t going to be wipe out your debt & become ridiculously wealthy overnight.
However, if you can get these smart money tips to work for you, you will start seeing financial reward which will motivate you to relentlessly pursue your quest for real wealth.