Step 1: Spend less than you earn.
Spending less than you earn is the starting point for doing well financially. Anytime you find yourself trying to keep up with the Joneses, remember what Dave Ramsey says, “If you will live like no one else now, later you can live like no one else.”
Step 2: Don’t be cash poor.
A cash reserve can protect you (i.e. keep you from casing in investments or accumulating debt) when you face an unexpected expense like car repairs, home maintenance, etc. Having cash on hand is also a good way to make sure you can take advantage of any unexpected opportunities or investments that come your way.
Step 3: Accumulate the right types of assets.
When building your net worth, focus on accumulating assets that (1) are likely to appreciate and (2) can be converted into income later in life. It might feel great to have an expensive house that’s paid off, but if you don’t accumulate sufficient investment assets, you might have to sell your home later in life to fund your retirement. If you live in it, drive it, or wear it, then it’s not the right type of asset.
Step 4: Don’t forget the little things.
Many Americans have unsecured debt like balances on credit cards. Debt like this is often accumulated gradually – rather than all at once – until one day it seems too large to handle. Think twice before using your card to charge for spontaneous purchases. Make sure you actually have money to pay for it.
Step 5: Keep it simple.
When it comes to finances, “complicated” doesn’t always mean “better”. Be leery of any investment requires you to sign complicated contracts, disclosure documents, or suitability statements. There are plenty of straightforward, easy to understand savings and investment vehicles available to investors.
To learn more about our company - and find out how we are different from other financial advisors - call (210) 587-6433 or visit www.VannoyAdvisoryGroup.com
