How do I become wealthy? Part 1
Steven May, Financial Planner and Head of Financial Planning at Rethink Financial Group
Throughout my career as a financial planner, I’ve been asked one question many times over – “Steve, how do I become wealthy?”
There are a number of things people should consider when pondering that question:
Most importantly, what is wealth?
I believe it’s the freedom and ability to live a life that you love, that you are truly passionate about and one that embraces everything that is important to you.…… And of course that is different for everyone. I know clients who have been happy to live a simple, but enjoyable life requiring little money to most people’s standards. I’ve also known many who live a more lavish lifestyle with plenty and enjoy spending what some would consider excessive amounts on “toys” and “travel”.
Have a think about what “wealth” means to you and this will form the basis for your goal setting. Here’s an example…………..” in retirement I’d be happy to be able to spend $1,000 per week on the basic things in life, have an overseas trip costing $10,000 every year and buy a new car every five years”.
Spend less than you earn
This sounds like an easy one, but it’s very common for me to meet people who don’t know how much they spend. In some cases they don’t even know how much they earn! I totally get that budgeting can seem onerous and confronting, however without getting your cash flow under control it’s very difficult to develop a workable wealth creation plan. There are many methods of tracking and understanding a family’s cash flow. Many online budgeting programs are available or it can be as simple as writing every cost down on a budget worksheet. Whatever works best for you = is the solution.
Once you know how much you need to spend each week/fortnight/month on mandatory expenses and savings, you then have the freedom to use the remainder as “fun money” and spend it however you choose.
Put your plan in writing
Once you understand what “wealth” means for you and the amount you have available for investing, then get a written plan in place. You can do it yourself or you can engage a financial planner to coach you and keep you on track.
There’s no time like the present
The main reason people don’t achieve their desired wealth is that they don’t take that active step to get started. Procrastination, over analysing, information overload and busy lives are all reasons people give me for not starting on the road to creating financial freedom.
With support and guidance it’s possible for anyone to create wealth. Have you thought about what wealth means to you, and have you started your journey to financial freedom?
If you’ve enjoyed this blog, I will be sharing the second part to it shortly, everything in life is a journey, stay tuned…
Disclaimer: This editorial provides general information only. Before making any financial decisions, consult a financial planner to take into account your individual needs.