How does this compare to your current circumstances? Most people find that they have quite a bit to achieve in the next 10 years if they hope to attain the goals on their list. Now, before you start weeping (or laughing), ask yourself what you’re doing right now to achieve those goals. Do you have an active plan in place that is going to enable you to realize these dreams in the next 5, 10 or 20 years?
Often a good indicator is to look at what you have done in the past five years. Have you been doing pretty much the same things, or are you stepping out and becoming more creative and aggressive? The answer to this question will have a significant impact on your financial future. Most people dream of having money, time and prosperity, but they rarely make the effort to transform these dreams into reality.
Sandra is a perfect example — she wants to be “rich” but makes no effort to save or invest or even think about her future. Basically, she wants to have her cake and eat it too, without ever having to pay for the basic ingredients.
Short-Term Steps to Wealth Creation
• Spend less than what you make.
• Save for the short-term; invest for the long-term.
• Limit gratuitous expenditures.
• Use coupons and buy in bulk.
• Use credit wisely — don’t buy more than you can afford.
• Formulate a budget together with your spouse, and live by it.
• Pay yourself first — 10% of what you make.
If you are not doing anything to improve your situation, then where you are now is a pretty good indication of where you will be in 10 years time. Applying this discipline will not necessarily be easy, but introducing order and structure to your financial picture right now is the key to having an improved picture 10 years out.
Next time I will highlight the most common mistakes people make when trying to make money. Check it out and learn how to avoid the pitfalls!
Plan Your Work and Work Your Plan
You can be wealthy, you can have a wonderful retirement at almost any age you choose — but it won't happen by itself, and is unlikely to happen without your direction, guidance and drive.
In this article, I will address your current situation and look at whether you are on track to achieve your goals. In the future, I will talk about the importance of a “wealth identity” in the wealth creation process, because I have found by both experience and observation that wealth is 20% skill and 80% attitude.
Additionally, I will spend some time going through the different asset classes that are available for you to invest in. Finally, I'll discuss the implications of the changing economic environment in which we live.
The key point to remember is that it is very hard to achieve anything without a plan. A builder would not start laying a concrete slab unless he had the plans for the complete house. Nor would a water-skier get in the water without first organizing his boat. Yet most people are willing to head into the new decade without a plan for the future or their retirement.
How to Reach Financial Freedom
Your financial strategy is going to be the key to your long-term financial success. So let’s examine how to make the best of where you are now and then develop a plan to get you where you want to go.
Sandra's pretty sure she's going to be wealthy. After all, she's been buying lottery tickets every week for the past 8 years, and her number is bound to come up soon. It's just a matter of time.
Every week Sandra faithfully sets aside a sum of money to purchase her lottery tickets. She is determined not to miss her chance of financial freedom.
There are millions of people like Sandra. They live everywhere — in the cities, in the small towns, in large families or as singles — and they have a number of important traits in common.
Usually they live from check-to-check, with little savings and increasing expenses. (There's too much month at the end of the money!) Some earn large amounts of money, some earn basic wages, but none of them can meet their needs and dreams on their incomes. It's as though all their pockets are lined with holes.
They dream of the day they will win “the big one.” They dream of the way this money will change their lives and enable them to live in the style they dream of (or in the style they think they deserve). Everything's going to be great when their numbers finally hit!
In the meantime, they don't really have any spare money to save, and they haven't really given their retirement much thought. “That's years away,” they’re fond of saying. In short, apart from their once-a-week bet, they haven't any wealth creation plans at all.
Is Sandra really going to be wealthy? I'd say she has a one-in-10 million chance. Those are not the sort of odds I’d like to base my retirement income on!
Don't get me wrong — lottery tickets can be fun and sometimes they do magically transform the winner's life. My point in relating Sandra's story is that lottery tickets should not be the sole basis of one's retirement plan. Or perhaps, to say it a bit more clearly, lottery tickets are never a wealth creation strategy!
Certainly, you need a bit more substance in your plan to have a realistic shot at becoming wealthy. Over the next weeks I will be explaining the basic ingredients of a successful wealth creation plan, but remember the old adage: “You can lead a horse to water, but you cannot make him drink!” I can offer the best tips to put you on course to a more financially prosperous life, but it will always be up to you to act upon the information.
Where Are You Now?
Are you in a position where you are easily going to achieve your financial goals, or could you use a little help organizing your finances?
If you are like most people, you may not have given your wealth plans as much attention as they deserve.
But if you want to be wealthy and prosperous, then you must formulate a clear idea of where you want to be in 10 years time. Take a few minutes to write down the lifestyle you'd like to be living in 10 years. List your goals and also how much money you think it will require to achieve them. For example:
Travel Goal: A trip to Europe every 2 years @ $10,000 per trip.
Annual Income Goal: $100,000 per year before taxes.
Now it's your turn: My Goals in 10 Years Time …
Do you expect to be wealthy within the next five, 10 or 20 years? Probably some of you reading this will respond with an emphatic yes. Others, just as likely, will answer with a somehwhat anxious “no.”
This series of articles is designed to help you plan your wealth creation journey. I'm sure everyone has heard the expression, “If you fail to plan, you plan to fail.” Well this phrase is particularly apt when talking about your finances. It boggles the mind to consider the number of people who have no plans for their retirement. Many people spend more time planning their annual vacation than they do their retirement years. You can be sure that all of these people “want to be rich,” but they have never bothered to sit down and plan how they could make that happen.
Discussion Forum
What techniques have you employed to work out your way out of financial difficulties?
