Make Your Money Work

Make-Your-Money-Work

Having a high income, doesn’t mean you’re wealthy.

In fact, I remember meeting with a financial advisor once who told me she had clients who were earning high six-figure incomes who had no savings.

That’s not wealth.

If you want to create true wealth for you and your family well into the future you need to start paying yourself.

My father taught me this strategy when I was a young boy. I wasn’t able to make much use of it then, but slowly as I started to work, made investments and built profitable businesses, the power of this approach became abundantly clear.

Over just 1 year you’ll have saved $12,000. Over 5 years, you’ll have saved $60,000 and over 10 years, $120,000!

What’s beautiful about this strategy is that it’s available to all.

Now let me share with you the two keys to creating wealth:

1. Pay Yourself

At the end of each month have a set percentage of your bank balance set aside. It’s a simple process to do.

First, decide how much money you will set aside each month. Ten percent is a good starting point. If you’re earning 10,000 a month, start by setting aside 1,000.

If you can put aside more each month, you’ll become wealthy that much faster.

Some people say, “I need that money to live on…” You probably don’t. It’s amazing what happens when you set this money aside and only have $9000 a month (using the above example) to live and support your family on.

You’ll end up getting by just fine. Most people realize that they don’t even think about the money they’ve put aside – it’s like they never had it.

The next step is to automatically have this amount withdrawn from your main account. The key is “automatically”. You set it up once and then never have to think about it again.

If you’re having a hard time saving money and building up your wealth, this strategy will get you going in the right direction very quickly.

Over just 1 year you’ll have saved $12,000. Over 5 years, you’ll have saved $60,000 and over 10 years, $120,000!

2. Put Your Money To Work

You have several options of what to do with the money you set aside. The choice you make is guided by the level of return (or interest) you are looking for on your money and your risk tolerance.

The lowest (and worst option) is just having the money moved into another checking account in your bank. It’s a great start, but it earns almost no interest.

Another option is to have the money put into a money market (high-interest) account, where depending on where you live, could earn you up to 2%. This is very stable and the money you put in is safe. The problem here is that inflation usually grows at a faster rate which means you’re actually losing money with this type of account. Plus, in many countries, the interest you earn on this type of investment is taxed at the highest rate.

An option I prefer is putting that money into an investment account where your money will be invested in a mixture of corporate or government bonds, dividend paying stocks, and other investments. You can have your money put into different types of investments based on the risk level you’re comfortable with.

With this last approach you can earn anywhere from 5%-30% on your money. There’s no guarantee here, but with the right investments and expert guidance you can protect your money and see strong growth.

The Result

After one year, not only would you have $12000 saved, you’ll earn interest on that money. You’ve put that money to work. Keep doing this year after year and you’ll be surprised at how quickly your money grows and you’ll be well on your way to creating wealth for you and your family.