Sunday, August 10, 2008

Slow but sure way to be Rich

I have read a very interesting book about secrets of the rich. That it is through wise management of our personal finances, anybody even payday-to-payday survivors like us-- can grow her wealth. The author of that book who is also an entrepreneur, management consultant and also a financial advisor believes that we can retire from work well off without resorting to high ventures or illegal gambits. He shared the following in achieving financial independence...
  • Pay yourself first. The only way to start growing your money is to save some 20% of your salary immediately. To make it easier, think of yourself as a company and compensate yourself first before doing anything else.
  • Keep it liquid. Instead of real estate of other hard-to-unload properties consider investing initially in safer money instruments such as government treasury bills and bonds. Here your money stays liquid and earns more than if locked away in a savings account.
  • Consider the risks. But if you want to invest big time, know that the bigger the returns, the higher the risk. Playing with stocks is a very dicey move, and franchising and small businesses have a high failure rate. Best option is to spread the risks and find a mentor to guide you.
  • Steer clear of dubious pyramid, networking and other get-rich schemes that will only fleece you dry.
  • Do not equate wealth wealth with tons of money. The goal is to become wealthy, but in the sense that present financial resources can support your lifestyle over a long period of time, even if you no longer work.
Whatever the case may be, the only way to start growing our money is through prudent saving and investing.

No comments: