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5 Secrets to Wealth
1. Know Your Accounts & Balances
You have to know what checking, savings, credit card, investment accounts and loans you have, and what the balance of each one is.
2. Know Your Net Worth
Next, add up all you have and subtract from that amount all that you owe. The result is your net worth. The more the better. If it's less than zero you have too much debt.
3. Pay Your Bills On Time
Speaking of debt, make sure you pay your bills on time. Put every bill you receive in a filing system, go through the file weekly, and pay it at least a week before it's due. Late and missed payments cost you penalty fees, can increase your interest rates, and worst of all can negatively affect your credit score. Pay your bills on time.
4. Save Money
Build up a rainy day fund of at least six months of living expenses to help protect yourself against the unexpected - and then keep saving. Put aside some money every time you get paid. This is the easiest way to save money - no need to budget. You can start small, say 5% of your net pay and then gradually increase it. Ten percent is a worthy goal, 20% is even better.
5. Invest
After you've built up a rainy day cushion, the rest of your savings should be invested so that it continues to grow. One easy and proven method over long periods of time is in the stock market itself. One of the easiest ways to invest in the market is through an index fund that tracks the S&P 500 or Dow Jones Industrial Average (DJIA). Most mutual fund companies offer index funds.
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