Tuesday, February 26, 2013

How to Get Rich - Plan To Retire Forever

Do you know how long the average human life span is ?

Do you think you can make a difference towards extending your life ?

Chances are you answered no and then maybe to the above !

Money and Time

Most people work and save their whole working lives hoping to some day retire and live the good life. The problem is how do they know how much to save and invest ? No one knows for sure how long their money must last after they can no longer work for it. This is one of the biggest challenges to retirement planning.

My solution is quite simple really. Plan to live forever. This makes retirement planning very simple.

Here is how it works. Keep saving and investing your money until the income from your investments is large enough for you to live on comfortably without working at all. Of course this means you will still need to make enough for your minimum ten percent savings, even throughout retirement. Without this, inflation will slowly eat into your income and your plan will collapse. Simple, right?

Health and Time  

The other problem with retirement planning is that we have no idea how long we will be alive on this planet after we can no longer work. With the advances in medical science, this could realistically be a very long time. Again, plan to live forever.

None of us want to spend any length of time as an invalid later in life. But in reality, it does happen. Is there anything we can do to better our odds of this happening to us? Yes, there is !

Start treating your body well today as if you will be living forever. By eating healthy, exercising and controlling your stress levels, you will be extending your chances of a longer and healthier life. After all, why bother becoming filthy rich if you don't have the time someday to enjoy it ? Why bother ?

What Now

Well,there you have it. My simple plan for a wonderful long retirement. You must now determine what you must do to realize your future dreams and goals. What can you do today to plan for living forever. Hey, you never know, this could be a reality when it is time for you to retire.

To sum it up, plan your finances to last forever. Start treating your body as if you will be living forever. You want to be able to enjoy a healthy and prosperous life for as long as you can. You do not want to spend forever in a care home ! What a thought !

As always, I welcome your comments and suggestions for future topics.

Tuesday, February 19, 2013

How to Get Rich - Pay Your Governments Less

Do you like paying taxes to your Government ?

Do you think they spend your tax dollars wisely ?

If you're like most, your answers will be a resounding NO !

Waste of Wealth 

Any tax that you end up paying to your various levels of Government is technically a waste of good money and also a waste of every taxpayers' hard earned wealth. The reason I say this is that most governments that I have had dealings with are extremely inefficient and in many cases should be charged with negligence or even downright fraud. However, the way our legal systems are designed, it is very difficult to hold politicians accountable to the people they are supposed to represent.

Please note that this is purely my opinion and there may be good responsible governments somewhere. I have merely not encountered any.

Reduce Your Tax Waste  

Now that you understand my opinion on most governments, my recommendation is to do whatever you can legally to pay as little tax as possible. The wealthy spend a lot of time and effort in this task mainly because it can make a huge difference on their future wealth. The more wealth you create, the more your government will want to share in your success.

Think of it this way. For every dollar you can save in taxes, you will have another dollar to invest in your future. These amounts when compounded over many years can add up to a substantial portion of your overall wealth. Therefore, the reduction of tax payable should be of the highest priority in any planning and investing that you do.

Help Is Good

This is an area where it is good to hire an expert to help you in your tax reduction planning. The average individual will not be able to make sense of the complex wordings of most government documents. They seem to be designed for the legal professional without consideration of the average individual who will most benefit from their understanding.

Paying for good tax planning advise is money well spent. Over the years it will save you much more in tax savings than the initial costs you will invest. Yes, Invest. Think of this expense as an investment in your future wealth.

As tax laws are different in every jurisdiction and are also constantly being updated, it is impossible for me to give you more specific advise about reducing your individual tax bill. You will have to find a qualified individual in your jurisdiction and work with them in this area. Make sure to shop around and always ask for references from satisfied clients. As in most things, there are good ones and some not so good ones.

By finding ways to pay your government less, you will be growing your wealth at a much faster pace. Be sure to invest your tax savings in your future and not spend it. This is the best way to ensure the cost of good planning will benefit you the most.

As always, I welcome your comments and suggestions for future topics.

Tuesday, February 12, 2013

How to Get Rich - Have an Emergency Plan

Would you be able to survive if you lost your main income source ?

Would you know what to do if this situation ever happened ?

Sad to say, many individuals don't have a clue !

Hand To Mouth

I am sure you have heard the saying that someone is living hand to mouth. Basically, this means that all of one's income is used to pay everyday living expenses. There is no money left over to plan for their future financial lives.

Many individuals live this way for their entire lives, never seeming to get ahead. Sound familiar ? What would happen to these individuals if they suddenly lost their only source of income ? Not a pretty picture.

Plan for The Worst 

There are a couple of steps one can take to avoid the above situation. First of all, never put yourself in a position to not have money left over after paying all of your living expenses. Secondly, make sure you set aside this left over money for a rainy day so to speak.

As I have mentioned in previous posts, I recommend you put at least 10% of your current net income in a savings account and never spend it. Learn to live on the rest. Once you have this habit firmly entrenched, you can start ensuring you will be prepared for the worst situation as described above.

You should then accumulate at least 3 months of living expenses (preferably 6 months) and place this in a separate bank account or guaranteed liquid investment. You should leave it there and never touch it for anything except an emergency such as losing your main income source etc. This will be your emergency reserve or safety net.

Why It Is So Important

The reason that this part of your financial plan is so important is that without a safety net, you will have to go into scramble mode and try to find  a way to survive. You will be able to think much more clearly and be relaxed if you know your expenses are covered for 3 to 6 months. Panic can cause many mistakes to be made.

What Next

Only after you have your emergency safety net in place can you plan your future investments and make plans for your future growth. Only use your savings for investing once your safety net is in place. This is a very important first step to building your wealth and ensuring a comfortable future.

As always, I welcome your comments and suggestions for future topics.

Tuesday, February 5, 2013

How to Get Rich - Invest Don't Gamble

Do you think that investing in the stock market is like gambling ?

Are you afraid of rolling the dice on an investment ?

If you are like many, this is a common misconception !

What Is Gambling

First of all, let me say that gambling is an addiction that will kill your financial dreams. Gambling is based mostly on emotion and very little on logic. Most games of chance are designed for you to lose money. The lure of a potential big payout is what keeps people coming back for more.

Casinos and Lotteries are big business today. They know that human nature will always take the easy path and hope for the instant windfall. Sad to say that this is the world's biggest legalized scam today. Yes, governments even run lotteries to boost their tax revenue. It works well for them.

What Is Investing

Investing on the other hand uses mostly logic and understanding of how money is made. Emotions play a very small part in actual investing. A well educated investor takes very little risk when investing his/her money. For example, an investor would buy shares in the above casinos and lotteries which are almost guaranteed to make big profits. This is certainly not gambling.

Where The Problem Lies

The problem with the investment world is that there have been and still are many dishonest individuals selling uneducated investors on fast easy profits. They hardly ever promote the high risk along with their high reward potential. The result is most of these uneducated investors lose their money. Hence these people consider investing the same as gambling.

Stories of losing money eventually spread and the uneducated individual believes that investing is the same as gambling. This misconception will likely continue until more individuals become better educated.  

What To Do

If you want to become truly wealthy, become educated first. Learn the differences between gambling and investing. Never invest in something that has a high risk of failure. Never invest in something that you don't totally understand. Never invest in something that doesn't put money in your pocket every month or every quarter.

You must learn not to believe the promises of huge profits by promoters of so called investments without careful examination. Many pad their own pockets first and leave the unwary investor to hold the obligations of the future enterprise. A very bad situation for most.

Education is your key to building a bright financial future. Continue learning.

As always, I welcome your comments and suggestions for future topics.