Master your inner thoughts and spoken words
Your inner thoughts are the start of everything that you create. What you focus on expands. Negative, fear based thoughts will manifest themselves into reality if you allow them to grow in your mind. You must focus on the things that you want so that it expands and manifests in your life. Your words are also important as negative words such as “I can’t afford it” or “I will never be rich” will send out the wrong message. The universe only responds to thoughts and words of abundance. From this moment forward stop yourself the second you think or say a negative word and immediately replace it with something positive. You must believe that you can be rich and live a life of abundance. If you have the mental capacity to read this article then it is your duty to get rich so that you can help those that are less fortunate than yourself.
Create a spending plan
A spending plan specifies exactly how you will spend and save your money. I prefer not to call it budgeting as this implies constraint and scarcity of choices. A spending plan on the other hand suggests mastery and control of your finances. It is vital to track every cent that you spend. The idea is to create a list of spending priorities that is aligned to what is most important to you. There is one thing that is non-negotiable. You may not spend more than your earnings and at least 10% of your income must be saved so that you can build capital for investment. You should have a short-term plan that covers the period of a month and a long-term plan that is for a year. This is because certain expenses like home improvements may need longer planning periods. Long term home improvements can also be managed by taking out a loan and paying a fixed monthly amount that fits in with your plan.
Simplify your lifestyle
You can save and live a life with lesser stress if you just simplify. An expensive car and dining out at popular restaurants is not a necessity. Don’t drink coffee at Starbucks or spend money on fancy branded clothing. Once you are earning your desired working income then you can treat yourself to luxuries but if you are struggling to save then really think hard about your lifestyle and spending habits.
Pay off your bad debt
Credit card debt is bad if you pay just the minimum amount every month. If you have a large credit card bill then do your best to pay if off quickly.This is because the high interest will keep you in debt for many years to come and will result in you paying more than the original amount. Sometimes it is necessary to take out a loan to take care of an emergency or a home improvement project. This is not avoidable but get the best interest rate possible and pay more than the required monthly amount so that the loan is disposed off quickly.
Create a balance sheet and income statement
This might sound like a scary proposition and you may think that these financial reports are just for businesses. This is not true, every person needs these drawn up so that they know what their net worth is. A person may be earning a really good income but can still have a very low net worth. Net worth is the total of all your assets such as cash, investments, properties and cars minus your liabilities such as loans. A person can have many assets but may still be in big trouble if they can’t pay back their liabilities. The ideal situation is to have assets that you own completely and liabilities that are not more than 40% of the value of your assets.
If you have no financial goals then you have nothing to aim for. There is no point in saying you want to get rich. You have to specify the exact amount and the exact date you want it. What is the ideal working income that you want? Write down the exact amount then double it to take into account taxes. What is the exact amount of money that you wish to have in your bank account in five years time? What would you like your net worth to be in five years time? Write down all these figures and look at them everyday before you go to sleep and again when you awaken in the morning. This gives your subconscious mind something to aim for and manifest into your life.
Learn to invest
The interest your money earns in banks or financial institutions will never make you rich. It is important to earn more than 20% interest every year on your money. Financial institutions will never be able to do this for an individual. It is up to each person to learn the skills to invest in the stock market and residential property market. This is a long-term commitment which requires diligent study and application. You must read the books, attend the seminars and listen to a good mentor so that you can acquire the required knowledge. Once you have the knowledge then massive action and discipline is needed to execute the investment strategies. The work is hard but it will be worth it if you can retire early and not have to worry about whether you can afford the lifestyle you want.