Guess what?
Most people have it within their power to increase their savings by 30 - 50% INSTANTLY!
Sound good to be true? Try this:
Let's say that in the average month you save $100.00. You probably don't even move that money to a savings account - if you do, you're smarter than most people. The average Joe will just spend what he wants and what's left at the end of the month is "saved." So let's say Joe transfers $150.00 to savings the same day he deposits his paycheck and now only spends what he has left for that month. Get the picture? You've just increased your savings by 50%!!
You may have heard the phrase "Pay yourself first" tossed around by self-help financial gurus...well, this is what they mean. Before you spend money, put some away for yourself. Don't even think about it, do it automatically!
If you want to increase the amount of money that you're able to "keep" for your future, then LISTEN UP: It is easier to NOT spend money than to earn more! Think about it. Let's say that you want an extra $100 a month to begin saving/investing. Think about how to earn extra money - work more hours, work harder, work smarter, get another job...etc. Those are all good things...and you should do them if you want to increase your earning power. But now think for a second about how easy it could be to simply NOT spend all your money.
Now a word here on spending: if you have a problem NOT spending money and like 80% of Americans, you are living paycheck to paycheck - you may want to start taking your finances seriously. Do you have a spending plan (a trendier, cooler word for "Budget")? Do you track it? Computer software makes it easier to do this than ever before. Invest a few dollars in Money, Quicken, or some other financial software and track everything!
Next, figure out how much money you want to save and start an automatic savings plan. Many banks offer online banking with automatic transfer options. If you're not getting a good savings rate, check out what banks are giving good rates at Bankrate.com. I use ING Direct, which gives a very good rate and is easy to use. Set up an automatic transfer into your savings account every month.
How much to save?? That's up to your, your budget, and your goals. Try to save at least 10% of your income with a goal of getting 1 month of your income saved within 1 year (you should get there at 10 months if you're saving 10% a month!!). Ideally, you want to get up to 3-6 months of your salary in savings. That way if you can't work, or need to make a large purchase - you'll have some cash.
Questions/Comments:
Do you have a separate savings account and use automatic transfer?
Is it hard to start a savings plan? What are some changes you've made to adjust?
Is tracking your spending "fun" or "work"? Ideas to make it more interesting?
Try to set tangible savings goals. This helps you strive for something. What are some of your savings goals?
Saturday, November 3, 2007
Wednesday, July 18, 2007
How do I start?
The question I get most is "I want to start investing...how do I start?"
I think that most people are clever enough to figure this out on their own, but they simply lack the passion to make smart investing a priority in their life. Notice I did NOT say they lack "time." I firmly believe that we have enough "time" to do ANYTHING. We just don't have enough "time" to do EVERYTHING. So we prioritize our time according to what we MUST do (work, responsibilities, etc) and what we WANT to do (our passions).
Therefore, my first piece of advice for those who want to "start investing" is that you MUST make it a priority in your life to be a smart investor. This doesn't mean that you have to spend 20 hours or even 2 hours a week on analyzing stocks. It simply means that you must put in the time necessary to make educated decisions. Heck - if you're not gonna make educated decisions then you may as well gamble your money away rather than invest it!
Once you've made up your mind to be a smart investor, we can get serious about what you can actually DO. While everyone's situation is unique, I would recommend the following step-by-step plan to get started:
Questions/Comments:
Does anyone have a story about when they "made it a priority to be a smart investor?"
What do you think about my step by step list? Why is it in that particular order?
What step are you on? What step would you like to be on next year? In 5 years?
I think that most people are clever enough to figure this out on their own, but they simply lack the passion to make smart investing a priority in their life. Notice I did NOT say they lack "time." I firmly believe that we have enough "time" to do ANYTHING. We just don't have enough "time" to do EVERYTHING. So we prioritize our time according to what we MUST do (work, responsibilities, etc) and what we WANT to do (our passions).
Therefore, my first piece of advice for those who want to "start investing" is that you MUST make it a priority in your life to be a smart investor. This doesn't mean that you have to spend 20 hours or even 2 hours a week on analyzing stocks. It simply means that you must put in the time necessary to make educated decisions. Heck - if you're not gonna make educated decisions then you may as well gamble your money away rather than invest it!
Once you've made up your mind to be a smart investor, we can get serious about what you can actually DO. While everyone's situation is unique, I would recommend the following step-by-step plan to get started:
- Have a savings account for short term needs
- Fund your retirement account
- If married and your spouse doesn't have a retirement account, fund an IRA for them
- Fund a ROTH IRA for yourself and your spouse
- Buy a house
- Invest extra savings in mutual funds/brokerage accounts/real estate
Questions/Comments:
Does anyone have a story about when they "made it a priority to be a smart investor?"
What do you think about my step by step list? Why is it in that particular order?
What step are you on? What step would you like to be on next year? In 5 years?
Why MoneyWiseGuy?
Money
Is there a more controversial topic than money? Perhaps religion and politics are the two no-no's of dinner conversation, but think for a second about the taboo topic of money:
What's the #1 cause of problems in marriages?
What's the #1 cause of disagreements among heirs of an estate?
What topic is so "personal" that some families don't discuss it at all?
Companies have unwritten rules about their employees talking about their salaries.
Siblings start to resent the others because of differences in wealth.
There's even the often quoted (and misquoted) Bible verse that says that "...money is the root of all evil."
For better or worse, money has permeated most of our society. We can choose to either ignore the topic as a lot of people do, or tackle the tough questions head on.
That is what this blog is all about!
WiseGuy
I like this moniker a lot because it can have a double meaning. Obviously "wise" + "guy" could mean having knowledge or wisdom and being a dude. Both of which I qualify somewhat.
But also the fact that "wiseguy" could mean poking fun at some of the preconceptions and misconceptions about money. You know those people who are either embarrassed, shy, or think it's wrong to talk about money? Well, that's not me.
At this point in my life, I've learned that I have a deep passion for all things business: business planning, budgets, strategy, investing, and yes, even tax work. I've immersed my personal life in business. I still have my CPA license (now inactive) and my Accounting & Business education from Drury University. I still prepare tax returns annually for myself, my businesses, and a handful of clients. Now, I've received my Realtor designation and started a real-estate investing company with a friend of mine. And I've made it a point to run my personal finances like a business: keeping monthly financial statements and actively looking for investment opportunities.
Since money is the common language of all things business, a lot of my discussions will revolve around business topics. However, I would also like to touch on many other related topics such as:
A lot of people are scared talk about money, especially their personal situation. I encourage those people to stretch their comfort zones! Open and honest discussion is the best way to LEARN! I think most people who struggle with finances are the ones who either do not or are afraid to talk about their money.
And if you ARE comfortable! AWESOME!! It is said that "iron sharpens iron" so please join this important dialog and we'll learn together.
Questions/Comments:
Why is it "TABOO" to talk about personal financial issues?
Do you share my opinion that we SHOULD talk about these issues?
What do we need to be careful of when discussing financial topics?
Do you share a passion for business/money/finance? What excites you about it?
What topics would you like to see in the future?
Is there a more controversial topic than money? Perhaps religion and politics are the two no-no's of dinner conversation, but think for a second about the taboo topic of money:
What's the #1 cause of problems in marriages?
What's the #1 cause of disagreements among heirs of an estate?
What topic is so "personal" that some families don't discuss it at all?
Companies have unwritten rules about their employees talking about their salaries.
Siblings start to resent the others because of differences in wealth.
There's even the often quoted (and misquoted) Bible verse that says that "...money is the root of all evil."
For better or worse, money has permeated most of our society. We can choose to either ignore the topic as a lot of people do, or tackle the tough questions head on.
That is what this blog is all about!
WiseGuy
I like this moniker a lot because it can have a double meaning. Obviously "wise" + "guy" could mean having knowledge or wisdom and being a dude. Both of which I qualify somewhat.
But also the fact that "wiseguy" could mean poking fun at some of the preconceptions and misconceptions about money. You know those people who are either embarrassed, shy, or think it's wrong to talk about money? Well, that's not me.
At this point in my life, I've learned that I have a deep passion for all things business: business planning, budgets, strategy, investing, and yes, even tax work. I've immersed my personal life in business. I still have my CPA license (now inactive) and my Accounting & Business education from Drury University. I still prepare tax returns annually for myself, my businesses, and a handful of clients. Now, I've received my Realtor designation and started a real-estate investing company with a friend of mine. And I've made it a point to run my personal finances like a business: keeping monthly financial statements and actively looking for investment opportunities.
Since money is the common language of all things business, a lot of my discussions will revolve around business topics. However, I would also like to touch on many other related topics such as:
- personal finance
- money in marriage
- money and the Bible
- Investing strategy
- Real Estate
- Tax planning and strategy
A lot of people are scared talk about money, especially their personal situation. I encourage those people to stretch their comfort zones! Open and honest discussion is the best way to LEARN! I think most people who struggle with finances are the ones who either do not or are afraid to talk about their money.
And if you ARE comfortable! AWESOME!! It is said that "iron sharpens iron" so please join this important dialog and we'll learn together.
Questions/Comments:
Why is it "TABOO" to talk about personal financial issues?
Do you share my opinion that we SHOULD talk about these issues?
What do we need to be careful of when discussing financial topics?
Do you share a passion for business/money/finance? What excites you about it?
What topics would you like to see in the future?
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