Wealth
How can the average person turn moderate income into high net worth? Why should they?
How can the average person turn moderate income into high net worth? Why should they?
If they save at least 10% – 20% of their income from every check and put it in a ROTH IRA or 401k or 403b, they will be pretty much financially free when retirement comes. Obviously, it is always best to start when you’re younger, but it is never too late to start.
The average person can turn their moderate income into high net worth by taking control of their finances early on, minimizing and eliminating debt, living under their means: minimize unnecessary spending and increase the money you invest. The first and most important step, however, is self educating yourself so that you have all the control with your finances..this can be done by reading a few good books from the pros such as Bogle, Stanley, Hallam, and that crazy guy with the pink wig….just to name a few 😉
Well said Denny and Liz. Liz did a nice job of going into depth on the issue, which will be required for those who are really serious about putting themselves in the right position going forward. Let’s recap.
(1) Believe in yourself. Without that, not much is possible. (2) Invest in YOU as you educate yourself by going to the true experts on the subject: Jane Bryant Quinn, Jonathan Clements, Eric Tyson, John Bogle, Burton Malkiel, Charles Ellis and some guy by the name of Warren Buffett are examples. (3) Live below your means. This means tracking your spending carefully, reducing/eliminating your debt, and spending far less than you earn after taxes are withheld. (4) Save first. Go with at least 10% and strive to make it to 20% or more of your gross paycheck month after month after month. (5) Be wise with your investment dollars and that means having an all index mutual fund portfolio heavily weighted toward stocks when you are young and even older. (6) Keep your investment dollars tax sheltered in retirement accounts at work and a Roth IRA outside of work. (7) Learn to push materialism aside as life goes rolling along. Advertisers try to convince you that you “need” there product or service. Ignore them and do the best you can to avoid their messages at every turn. (8) Hang out with the right people. Your group will pull you up or bring you down. Be mindful of those “friends.” (9) Be patient. Wealth will not be created overnight. The compounding effect of your investments will gradually demonstrate you are on the right path. (10) YOU are the answer. Once you fully embrace this concept you will know this is up to you. Financial freedom to follow!