Here are 5 Keys to having a successful plan.
- Having a budget. Your income is the most important asset you have. Without knowing where every dollar goes you will never get a handle on the financial success formula.Budgeting is about cash flow management; where can I create money to save, and where can I find ways to reduce or eliminate unnecessary expenses?
- Having an emergency fund. Without 3 to 6 months expenses to cover the inevitable (Murphy’s Law); it is not a matter of what but when will it occur. By not having an adequate emergency fund, most people resort to using credit cards, borrowing against 401K’s, liquidating retirement accounts; all of which having devastating impact on your ability to win financially. High interest rates, tax penalties are a couple of immediate negative consequences.
- Staying out of Debt. Having debt is the most devastating of all financial decisions one makes. Debt robs you of hundreds of thousands of dollars of your future income. Debt keeps you always broke. Debt is the number one reason for divorce. Debt also creates stress that ultimately causes chronic health issues.
- Right types of Investments or savings strategies. Many people invest in insurance products such as Cash Value (whole life), annuities, universal policies. Insurance products are the most devastating product you can own for creating financial security and long term wealth.If you have any of these types of insurances it would be to your advantage to explore the solutions that will provide for better protection and better returns than insurance products.
- Discipline is the most important quality you have to win financially; have a plan and work it. The number one reason people become financially independent is that they save regularly.It is not about saving a lot money or receiving high rates of return, it is about the discipline.
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