Monday, November 7, 2011

12 Tips to Creating Wealth and Financial Freedom

Want some simple tips aimed at helping you create wealth and financial freedom?Here they are, based on my own personal experience of over 32 years of working with clients as an accountant:
1.   Establish clear goals - remember, they need to be SMART ie Specific, Measurable, Attainable, 
      Realistic and Time Specific
2.   Never forget your goals. It's easy to get distracted by temptation - regularly bench mark
      opportunities to spend your money with your established goals. If the planned expenditure does 
      not meet your goals, reject the opportunity. This takes DISCIPLINE - in other words, you may
      need to sacrifice short term gratification for longer term objectives.
3.   Prepare a budget so that you can understand where your money is going
4.   Earn more than you spend - this is simple but not understood by many. If you spend more than
      you earn, it is very difficult to accumulate wealth. This may mean earning more money  and/or
      trimming your living expenses to make your plan work!
5.   Ensure that your budget includes an element for now - its all about balance.
6.   Avoid bad debt. Simply put, this means avoiding borrowing to fund your lifestyle. Borrowing to
      fund lifestyle is the first step to potential financial ruin
7.   Recognise that there is no quick fix for financial freedom. That is, avoid those get rich quick
      schemes. The only people who get rich undere these schemes are the promoters!
8.   Be patient - it concerns me that many young people want to emulate the lifestyles of their parents
      - who in many cases have spent decades battling and saving for the what they have.
9.   Invest wisely, giving consideration for capital growth and income
10. Ensure that you manage the tax implications of your investing. Tax can erode much value.
      However, keep in mind tax is only one component of maximising your investment returns. To
      much focus on tax to the detriment of other considerations can result in catostraphic consequences.
11. Run your own succesful business. Now this is much more difficult than it sounds - the landscape
      is littered with business failures that have devastated wealth. However, experience has taught me
      that true wealth and financial independance is rare amongst those whose source of income over
      their working life has been working for others
12. Build your knowledge as true strength and power comes from knowledge. Whether its about
      building a succesful business or knowing where to invest - learn as much as you can., And if you 
      feel that you need help, seek it out!
Thats it - certainly not exhaustive but hopefully helpful
I'm interested in hearing from anyone who can add to this list!
Feel free to comment........

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