I’ve been a financial advisor for 12 years and have worked with hundreds of clients on all walks of life. As a result, I have encountered just about every financial situation you can possibly think of. With that being said, there is still one thing that continues to fascinate me -- why do people commit to buying cars, boats, campers, golf memberships, gym memberships, and countless other subscriptions but struggle to commit to building their wealth? Imagine if from the moment you started earning your first paycheck, you treated your wealth building as a bill, just like you treat your rent! You pay your rent when it’s due, no excuses.
The goal of this blog is to help people mentally reframe wealth building and commit to it like you commit to your monthly bills. If you’re someone who is looking to execute better in the area of personal finance – onward!
Step 1: Do you know how much money you need to be saving and investing to achieve all of your financial dreams? Goals like retirement, college for your children, major purchases, traveling, etc. all can be broken down into a monthly savings goal. Our team uses sophisticated software to help our clients plan for this, but there are plenty of adequate free tools out there to help you get started! Getting clarity on this monthly number is the first step to making wealth building a bill in your budget!
Step 2: Another way to increase your net worth is to pay off debt. This should be a part of your MWB(Monthly Wealth Building) as well. If you have any high interest debt, typically above 5%, you should be trying to pay down the principal faster. Set a goal of how much extra you want to pay toward high interest debt and add it to your MWB!
Step 3: Do you have 6 months of expenses in your emergency fund? If not, set a goal of how much you want to be saving toward your emergency fund and add it to your MWB. Trust me, that unexpected flat tire is expensive!
Step 4: What's the total monthly number when you add all of the above steps? Can you fit it in your budget? If not, are there items in your budget that are less important and should be eliminated to prioritize your MWB? If you can't do all of it now, how much can you do? Commit and move closer to the goal.
Step 5: The last, and possibly most important step is to AUTOMATE. This is where people fail. What gets automated, gets done. How can you automate your MWB? Setup up auto transfers to the appropriate destinations so that you don’t have to apply will power.
My promise to you: financial freedom is one of the best feelings you will experience in your life. The result is life changing peace of mind. It allows you to truly focus on the priorities in life. Commit to it like you commit to your bills. Because after all, you wouldn’t miss a rent payment, would you?
Max your dash my friends,