For Starters
When asked to name an effective way of obtaining wealth, a common
answer is: "Invest". What is the problem with this answer? Well, the
majority of respondents have very little or no money in their
savings account. I see the beginning of wealth building in a
different light. A saying that almost everyone knows but nearly no
one applies is: "A penny saved is a penny earned". In today's
culture it is definitely much easier to spend money than it is to
save it. The average American is exposed to 247 advertisements in
one day! Less than 5% of Americans have at least $3000 in savings
and no debt. It is no wonder that most consumers struggle with
saving money or grasping the concept of building wealth. We are
mentally flogged with television and radio commercials, newspaper
and magazine ads, billboards, signs, posters and even conversations.
Whatever the method, it all serves one main purpose - to take
your money and make it theirs.
Unveiling the Mystery
So with all those statistics and all that advertising, how in the
world is it possible to build wealth? Well consider yourself ahead
of the game already. By reading this article you are opening your
mind to ideas and concepts which could help you to begin the process
which is more than can be said for most people out there. A house
starts with a single brick and the same is true with wealth
building. You have to start with what you can and keep adding to it.
Why not jump in to stocks, mutual funds or other investments
right off the bat? Life will continue to happen whether you plan for
it or not. So plan for it. You must start with a lump sum of money
in your savings account which has been referred to as an "emergency
savings". A good figure for this is $1000. You MUST pay your savings
first, before anything else. If you do not, your savings will not
grow (or it may not happen at all). This extra money will act as a
soft landing for any financial falls that can and will occur while
you pay down other debts that are road blocking your way to building
wealth. You must realize though; this money is first priority but
can not be touched - ONLY for emergencies. By following these 2
steps:
1) Stocking up your savings with $1,000 and then
2) Eliminating extra debts (with great fervor), you will prepare
yourself for a much easier road to building wealth.
Making it Happen
You have to take action now or this whole savings thing will not
happen. First, get a savings account. If you have one, find out what
the interest rate is. Many have something like 0.25% to 1%
(WHOOPEE!). Remember that you are not trying to make all your money
in interest right now but since the money is going to sit you
may as well look around. It is possible to land up to a 3-5%
interest rate. Another option is a money market account to get a
good rate although restrictions sometimes apply for things like
early withdrawal fees and keeping a minimum amount in the account at
all times. Secondly, as I stated earlier, take your savings off the
top on payday. You have to make a painful change as well though. You
may have to sacrifice some things to get that initial $1,000. This
could mean no eating out or temporarily cutting out an expensive
hobby. You also might want to try changing your phone company or
downgrading your cable package. I hate this next idea but it is for
a good cause: Drop your credit card payments below the minimum (JUST
FOR NOW). Anyway, you get the idea. Cut some here - cut some there.
Now, take all the figures you cut and add them together. This
is what you will put in to your savings account until you reach
$1,000. See, when the average person feels like they are getting
ahead or even staying even, a setback occurs and sends everything
spiraling downward. This is the hard part of building wealth and it
is just the beginning (the first brick). However, without this extra
money in savings you will tread water until you eventually drown, so
stop thinking about it and start acting on it today.
Author Bio
Tom Justice is the webmaster for Clean Credit Online and does all
the designing, marketing, SEO and maintenance for the site. He has a
passion for personal finance and how the economy and consumers are
affected by money. To see how you can use Clean Credit Online to
help you with your personal finances please visit
www.cleancreditonline.com
