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Before you know where you’re going, it’s important to know where you come from. This is especially true in finances. Keeping good financial records is crucial to your plan. It helps project trends, find gaps, and is the first step to effective financial planning.
This is one of the classic financial strategies to build wealth. The goal is to save first, prioritize your financial goals, and learn to live within your means. We teach the 20-20-60 Rule of Savings to our young clients. This system sets them on a path of building wealth at an early stage and creates a good habit.
We are staunch believers in multiple streams of income. Receiving income from multiple sources is a great cash-flow diversification tool and allows you to not be solely reliant on your wage income. When it comes time to spend your wealth to live, it’s important to have different buckets and income streams to support your lifestyle.
A financial plan is the road map or playbook to work towards your life goals. These goals can include buying a home, running a business, saving for your child’s education, or enjoying retirement on your terms.
Bad debt is the number one worst detriment to wealth building. This includes carrying credit card balances, car debt, personal loans, and other debt. These shrink your wealth, not grow it and they reduce your future potential.
Proper debt management is borrowing to increase your assets in a financially responsible manner (not over leveraging). One of the best uses is buying your primary residence. This allows you to lock in your fixed housing costs while you work to increase your income.
Protect your family and all you worked for by transferring the catastrophic risk to insurance companies. Simple changes can provide the peace of mind that in the case of unforeseen circumstances, you will protect what is important to you. Identify these risks and determine which make sense to insure against.
No one can be expected to know what the right financial strategies are in all aspects. This is why we partner with experts in their related fields to provide you with experienced solutions to set you up for success. The cost of good advice is well worth the upside of making a good financial decision.