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Wednesday, September 8, 2010

The Seven Steps to Financial Freedom

 A Get Rich Slowly but Surely Plan in Seven Steps

It's true that money can't buy happiness, but it certainly can help you live the life of your dreams!

You don't need fancy investment strategies to become financially secure, and you don't need to win the lottery either!

Here are seven simple steps you can take to help you reach your financial goal:

1. Make a Budget

Budgets are a necessary evil. They're the only practical way to get a grip on your spending so that you can make sure your money is used the way you want it.

Creating a budget generally requires three steps:

A. Identify how your money is spent today.

B. Evaluate that spending and set goals that take account of your financial objectives.

C. Track your ongoing spending to make sure it stays within those guidelines.

2. Pay Yourself

Save 5-10% of your paycheck to a separate account before you have a chance to spend it and you will soon realize a great wealth! Best of all this will grow your "nest-egg" without changing your lifestyle!

3. Get the Most for Your Money

Place the same amount of money each and every month into an investment, thus helping your fortune grow steadily over time.

4. Make Your Assets Work

Convert savings accounts into higher-paying money market accounts. Sell unneeded items and invest the proceeds. Invest in stocks rather than bonds and guaranteed income funds.

5. Know about Compound Interest

The secret of compound interest is time! Compounding simply works better over time. Start investing regularly in stocks keeping a long term of 5 to 20 years.

6. Pay Lower Taxes

The only two things certain in this life are death and taxes. Though we all must pay taxes, there is no patriotic reason to pay any more than our fair share. Be smartm check this possibility with a good accountant and do some research.

7. Build Your Plan

Build a financial time targeted investment plan and stick to it! Like most people, you know that you have to save and invest your money, but, without clearly defined goals and objectives, it's hard to know how fast to save, whether the return on your investment is high enough, and if the investment is safe enough to rely on to be there when you need it.

Knowing and understanding the desired outcome of your investment will help keep you motivated and focused.

Knowing and understanding your personal investment goals will help you determine what to seek from your investments.

Finally, before investing, ask yourself: Why do I need my money to grow & when do I want to use it?