Have you set Financial Goals - Will the Wealth Paradox Claim You?
Written on the 27 July 2015 by Janet Culpitt
Only 10% of people get to age 65 with more than $500,000. If you were to retire tomorrow, how much would you need to provide you the lifestyle you want after all those hard years of working?
And remember that amount has to last you 30-40 years. Are you thinking oh no find another topic and move on, this is getting too complex or boring and I'd rather not think about it, I'm not even ready to retire?
OK, but while you have money coming in, you should be managing it and planning ahead. Living from day to day and paying the bills is not really money management. It is spending and meeting commitments. We all do this, but there comes a time you begin to think about a specific thing you need to save for, such as a new fridge, TV or even a holiday.
This is when Money Management (financial planning) really steps up to the mark.
You have to put some of your income away (SAVE!) so this would usually mean spending less in a particular area, as the commitments still need to be met. To save you must spend less than you earn (this includes loan commitments and credit card payments).
Setting a goal to save for is always the best place to start. Know where you are now or how much you have, then determine how much you need (total amount required, such as cost of the holiday). Develop a strategy or budget to get you there, within the desired time frame.
Monitor during the time to ensure you stay on track and that you are moving towards meeting that goal. This is a fundamental financial plan. From this you can think ahead and begin a bigger plan that compliments your working life and begins a plan for the future.
On a scale of 1 to 10 -Where are you now? (With 1 being no direction or plan, and 10 be Financially Independent)
How important is it to you that you move up that scale?
Do not let the Wealth Paradox claim you as a statistic in that 80% of non-achievers.