Unique Beautiful Fun

      10 March 2017 by Sarah-Jane Smith

Building Wealth

I read a lot of books about money. How people make it, how they manage it, how you should manage yours!  There are a number of things that have struck a chord with me that gives us all lessons in becoming more wealthy.

Firstly, spend less than you earn.  This may seem like a no brainer but it's surprising how many people I know, who have seen substantial rises in their pay checks over the years and yet, don't really have a lot to show for it.  If every time you get a windfall you go on a splurge you're never going to increase your wealth (though you may increase your wardrobe or your credit card debt).  We have a household budget.  We occasionally exceed our budget but by having one we're much more likely to stay within our spending capabilities.

Second, don't put all your eggs in one basket.  All of the rich people that I've read about have more than one source of income.  Robert Kiyasaki invests in real estate, writes books and does public speaking, Warren Buffet owns more than one type of business as well as various stocks and shares.  Even your local bank no longer just relies on one form of finance to earn its profits.  Diversifying your income across different income streams is about diversifying your risk.  If something's goes wrong you won't lose your shirt (or your home) in the fallout. Currently, I earn income from my cleaning company, from my online art store and some rent from investment properties.

Pay off your bad debt.  Bad debt is debt that is not attached to an increasing or income producing asset.  Your mortgage is called good debt because hopefully your home is increasing in value.  Bad debt is massive credit card debt or loans for things which have falling value.  Like cars, clothes and stuff you just had to have! I try not to carry credit card debt and always make an effort to pay if off in full so that I don't incur any interest.

Make sure you've got insurance! You never can tell when things might go wrong and it may be no fault of your own.  Insure your valuables and property, insure your home contents and  vehicles and, most importantly, insure yourself. Have life insurance and income protection.

Have financial goals. Make a plan to improve or protect your financial position, whatever it is! There's tons of money information available these days.  In books, in magazines, on t.v. and online. It's also worth remembering that what's rich to one person may be poor to another.  Decide on what your own idea of wealthy is and work towards that.

Till next time,

Sarah-Jane X