Fortune Watch

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Here are three words you rarely hear: “Get rich slowly”.

The fact is that very, very few people get rich quickly. It simply doesn’t happen. If it did, we’d all be rich and the world would be a lovely place. It isn’t, sadly. I tell you this not to burst your bubble, but to help you understand the practical reality of how money works.

Lottery winners are among the few who get rich quickly, and statistics show that within 18 months, most of them get poor quickly. Never having had much money, people generally don’t know how to handle it when they win big, and they tend to spend their way to the poorhouse at great speed.

Enough bad news. It is possible to “get rich”, highly possible. The catch, if you choose to look at it that way, is that it takes both time and effort. You can get rich slowly, which doesn’t sound like fun, but is in fact enormously satisfying when you pull it off. All it takes is the application of common sense and an adult attitude. You are capable of both.

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Seriously, you dont….
I advise people on personal finance including banking, budgeting, saving, and investing. How to save your money-tricks, how to budget, and using credit cards, etc. How to make more money by investing? What are stocks? Bonds? Mutual funds? What can you do to start today and maximize returns?

All you need is three ingredients, income, discipline and time. Chances are, you already have two of them, income and time. All you need to do is add the third, discipline.

Here’s how it works: Say you start with nothing, invest $500 (of your income) a month (a healthy discipline), and let your money ride (over time) in diversified investments. Long term, the stock market returns at least 10% annually. Assuming a 10% return, you’d have $102,000 after 10 years, $380,000 after 20 years, and $1.1 million in 30 years.

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Credit cards can be an excellent tool to help you manage your finances. But sometimes we make poor choices, or sometimes the events in life take us beyond our expectations and we are left to foot the bill. Perhaps you have had a few months of extra, unexpected expenses that you are now paying for. What can you do?

Gather together all of your credit card bills and add up the amount that you owe. Factor in the extra expenses you haven’t heard on your credit cards since you receive those bills. Add to that about ten or twenty per cent, which is the “whoops, I forgot about that” factor. Then, with that figure, start shopping around for a loan.

Get the loan and pay off your credit card bills. If you think that you may still use your credit cards, you may want to hide them away so that you reduce the temptation to use them. Now, instead of having several credit card bills at a high interest rate due by the end of the month, you now have one bill that is due once a month at a lower rate. This is called consolidation. At first glance it may not seem obvious why you’d want to do this but there are two reasons:

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Over time, I have realized that without certain good habits in place, my finances quickly get out of order. Perhaps the most important habit that I have learned is regular savings. Long terms goals are described as goals that have a lasting effect should a person’s present actions be religiously maintained.
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Regularly contributing to savings account is important on several levels. Of course, it’s good to have an emergency fund available for any of the countless situations or save for planned major expenses for which you would need extra cash.

Even though I know the importance of savings I will never make it without a plan. Somehow its always easy to spend all the money I have, no matter how much it is. I therefore treat savings like paying a bill, and I guess this is what it means when they say pay your self first. The key elements to making this strategy work are quite simple, first it has to be done regularly. If you miss your telephone or utilities bill this month, you will be expected to pay double next month. You can’t cheat your utilities bill out of a month so don’t do it to yourself.

To figure out how much you can save every month, you have to have a budget and commit to at least that much. If you say well you will save whatever is left, you will probably never end up saving anything or if you are lucky you might end up saving a lot less than what you actually should have. Budget for so many dollars, and put it in savings before you have a chance of spending it.

So how about you? Do you have any tricks you use to help keep yourself disciplined in saving money regularly? If not, why not give this a try?

Financial planning, something we all know we need to do, but always put off to the future. Financial planning is hard simply because it requires financial discipline, which is difficult to have in this consumer society. However, financial planning is very important because you want to retire one day, be financially stable in the event of an accident, or unexpected loss of a job. Regardless of when you begin, the basics remain the same.

Here are my top keys to getting ahead financially. Once you have made financial planning part of your routine, it won’t seem so difficult. But getting your financial planning started can be the most difficult thing. These tips will help motivate you to make financial planning one of your main goals.

No matter how much or how little you’re paid, you’ll never get ahead if you spend more than you earn. Often it’s easier to spend less than it is to earn more, and a little cost-cutting effort in a number of areas can result in big savings. One of the biggest factors fighting against financial planning is debt, especially credit card debt. If something starts off as a small debt it turns into a big one simply because you were not paying off the debt. Financial planning means you have a plan and paying off debt should be the first goal of your plan.

Another financial planning tip is to invest. Financial planning means you are saving for the future in many cases, so you will want to take money you earn today and invest in the stock market, in bonds or a mixture. Saving your money with the help of financial planning will help money grow all on its own.

A great financial planning tip is budgeting. You won’t be able to save unless you know what you spend. Make budgeting part of your financial planning and you will realize saving is not so hard. This is tough for people to understand and often what they resist most when they begin financial planning. Choose one area at a time and set a goal for incorporating it all into your lifestyle.

Sometimes, teaching people how to get rich gets me a bad rap. “You just want to make money,” I’ve been told. Or “money isn’t everything.” These gems, while not particularly eloquent, do have a point. Actually, I’d prefer that these people ask me why I teach people to be rich. It’s important to ask yourself, too: Why do you want to be rich?

Take a second and think about it.

Do you want to have a luxurious lifestyle? Do you want to travel? To eat at nice restaurants? Maybe you want to start your own business.

I believe it’s really important to consciously think about why you want to be rich. If you don’t, it’s easy to get caught up in a race to get more and more money without ever knowing why.

“But Robin,” you might say, “I’m really smart. I got a 4.0 at Stanford and I don’t really want to take the time to think about this. I just want some cash, playa!!”

After I point and laugh at you, I’ll actually get serious. Trust me–take an hour to write it down and compare your long-term goals to what you’re actually doing on a day-to-day basis. It’s easy to say and harder to do, so I’ve taken my own advice below. And hopefully, I can use these things to explain why I teach people to be rich. It’s not just money–far from it.

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