Have you had money problems for a long time? If so, not to worry—financial security is within reach of any man who diligently and patiently follows the 9 steps in this article. Take a few minutes to check which ones of the following steps you’re currently NOT taking in your life:
Step #1: Live Within Your Means.
Find out how much money you take home from your day job each month, and then limit your monthly expenses (e.g. rent, utilities, food, entertainment, etc.) to only 70% of it. Then use the remaining 30% to fulfill the other eight steps in this article.
Step #2: Eliminate Your Debt.
Especially credit card debt. The only “right” way to use credit cards is to use them for your expenses, and then paying in full every single month. That way, you’ll get all the points, perks, and freebies … and none of the gigantic interest payments.
Step #3: Create an Emergency Fund.
You’ll want to fill an easily accessible savings account with three to twelve months’ worth of expenses. This is to make sure that if for any reason you lose your monthly income (e.g. you get sick or you lose your job,) you’ll be fine for 3-12 months.
Step #4: Start a Business.
One of the pillars of financial security is constantly increasing your income, and starting a business is a great way to do that. You don’t need to start a brick-and-mortar business by the way—you can, for instance, become a financial advisor, consultant, or something else you can do from home.
(P.S.: I can help you with this step – let’s talk!)
Step #5: Make Sure None of Your Money is in Restrictive Accounts.
That is—accounts that don’t let you easily access your money AND doesn’t grow it faster than the current inflation rate. (Example: a College Savings 529 Account.)
Step #6: Unexposed as Much of Your Money as You Can.
“Unexposed” means putting your money somewhere the government can’t touch it, so it’ll be free from lawsuits and other interference – it’s yours, and yours alone. This is another pillar of financial security that sadly many Americans don’t know about.
So how do you unexposed your money? Answer: by following the next three steps.
Step #7: Fill up a Retirement Account.
Your retirement account should (1) grow tax-deferred, (2) allow you to withdraw funds tax-free, and (3) guarantee your principal.
Step #8: Get Enough Life Insurance.
This is super-important when you have a family that’s relying on the income you bring home. Get enough life insurance so that if you died too soon, your family would receive enough money that, if invested in the right places, will give them money for the rest of their lives.
Step #9: Get Disability Insurance.
Likewise, you’ll need enough insurance to protect yourself and your family when you lose your ability to generate income (e.g. if you get disabled).
Now, you might be asking: Why all the insurance? Why not just take all the money you’d pay for insurance premiums and invest it elsewhere?
Well, that’s the goal – you’ll want to have enough businesses and/or investments that generate all the money you need to meet your obligations and continue your lifestyle, even if you stopped working (or became unable to). In other words, you’ll want to eventually become self-insured.
But until you reach that point, you (and the people counting on you) will be vulnerable to money problems. So it’s imperative to get enough insurance to make sure everyone will stay financially okay even if the worst happens.
Besides, more and more insurance products today are ALSO investment products – your premiums are invested in vehicles that grow faster than the current inflation rate. Shop around – you’ll be pleased with what you’ll find.
Need more help or advice? Reach out via my Bio below.
—
Photo: Getty Images