Invest For The Future And Build Wealth
So until now, you are doing one thing at a time, from Baby steps 1 to 3. We are going through a step-by-step process to make things work. But today you can do baby steps 4 to altogether in order to move forward. Here’s how:
BABY STEP 4
This is all about investing 15% of your household income to retirement because if you do not, you will not have any money to be secured in the near future when your body quits from working. Usually, people depend on their future with the government with social security, but in fact, that is social insecurity.
According to math, on the average, the payout is based around $17,000 a year. Is it going to be enough to live dreams on? The answer is no; it is not enough. Especially if, as you age, your desire to live a peaceful and comfortable life increases as well.
Frankly, based on studies, here are the top fears for retirement:
- Fear of running out of money
- Fear of becoming a burden
So, start early!
Investing $150 every month from age 25 to 65 (at 11% rate of return) gets you to $1.3 million.
If you think and count, you gain a wider perspective towards things. You figure out things and see that there is a way for you to find money to save.
Have a dream meeting with your spouse. If you’re single, talk with your accountability partner. The thing is, when we dream, we get excited again. You need to see things keenly and start imagining yourself doing it. Change that someday to a concrete plan when you will start.
If you invest 15% of your income every month, you can become an everyday millionaire. You need to know your dreams, but most importantly, you need to know your plan.
BABY STEP 5
Save for your children’s college fund. Now, you will do it after you save for retirement. Every one of us will retire soon, and your kids may or may not go to college, so you need to save for that first. Doing that does not make you a bad parent– it makes you a responsible one. Also, you need to make sure that if your children will go to college, they will not end up in bad student debts.
This whole student loan issue you think is a blessing may, unfortunately, turn out the opposite if you do not prepare for it. You need to know that going to college is a blessing, not an entitlement, but if you can help them financially, that’s a huge blessing and they will be forever grateful for that.
You have two options for college savings:
- ESA and;
- 529 plan
ESA stands for Educational Savings Account or Educational IRA. They invest it in mutual funds, so it’s a very safe and great option. You can put $2,000 a year in ESA, and it grows tax free. However, if you are making so much money, you are not eligible to apply. Also, you can’t fund more than $2,000 a year. So if you want to put more money in, then you must look into the next plan, which is the 529 plan. Though there are good and bad options there, you need to choose a good one that leaves you in full control of the money.
Here are the 3 options for your children to decide that can help him/her through college:
- Select an affordable school. Go to private schools out of state if you can pay for it, or choose a state or community college.
- Apply for things like scholarships, grants, and work-study. All these are money free.
- Get a job. Study shows that they can actually pay the students’ way through an in-state school if they can work 20 hours a week.
Through these, you can help your children not only start their lives off in a financial hole but also let them begin on financially solid ground where they get to build their own futures.
BABY STEP 6
This important step requires you to pay off your home early. Pay off your mortgage. It sets you free. According to research, 100% of foreclosures occur on a home with a mortgage. If you pay off your house, it opens for more things you can do. It will allocate the money that you used for payment to other more important things.
BABY STEP 7
Build wealth and be outrageously generous. One hundred percent guaranteed. It changes everything. You get yourself in a position where you do not have to worry about your place because you have a little amount of money here. Now that everything is settled with your family, the future of your children and your legacy, you finally have the chance to look around where you can be a conduit of God and show up and change something. Giving is incredibly the happiest thing you will ever have with your money. We all have a lot of intentions. We all have a lot of things we desire to do. But if it traps us, then we are not in the position to do it. So when you walk through this process, make sure it puts you in a position to do that. This is the last and most important step.