There's only one guaranteed investment in life, and that's you.
You are the most important place you can put your time and money, and yet you are probably the one thing that tends to get neglected in life. When other people's priorities come up or it's time to sacrifice something, you might be the first to bend. But investing in yourself is not a selfish act. In fact, by helping make your life better, you will by default make the lives better of everyone else around you. And investing in yourself is the best way to ensure that you are well-taken care in the future, too.
All it really takes is the right investment portfolio. A portfolio not just of stocks and bonds, but one that includes key investments that you make in yourself and in your family. Like any good portfolio, the best investments you can make in yourself are diversified, carefully managed, and geared to the long term.
1. Make Your Own Lifestyle Decisions
The key to financial happiness is spending less than you earn, only you can determine what's really "right" when it comes to how you earn, invest, and spend your income. You can have piles of money, but if you're not living the life you want to live, you won't be able to buy enough things to make up for it.
Up until now, have you made your lifestyle decisions by default, or by consciously deciding what your priorities are? It's your choice from here on out.
Going from a dual income family to a one income household (so one spouse can stay home with the kids) or pulling up stakes and leaving the big city (or small town) behind. When done hastily, without a good deal of thought and planning, the emotional and financial consequences of adjusting to a new life -- perhaps without a job and the support of family and friends -- can turn a dream into a nightmare.
Of course, you don't have to give up your job or move cross country to change your lifestyle for the better. Small steps can make a world of difference. But we're convinced that first you need to consciously set priorities and figure out what makes the most sense -- for you and your family.
2. Put Your Family First
As a nation, we're working longer hours and spending less time with our families, leaving our kids by the wayside (or in front of the TV). You know the project that's sitting on your desk? Chances are, it can wait until tomorrow, but kids grow up all too quickly. Those school plays and Little League games you missed will be remembered, and regretted, for a lifetime. Family camping trips or tree house construction will also be long remembered. Which kind of memories do you want your kids to have?
3. Wherever You Work, Be in Business for Yourself
The last decade has changed our notions of job security. These days, while you're expected to be creative, resourceful, on top of the latest innovations, and dedicated to the workplace, you can't even count on being employed come tomorrow. While your goal may be to improve your job satisfaction and financial well-being, you've got to be prepared for cutbacks, downsizings, and mergers -- in other words, the old heave-ho.
Game plan for hedging your bets is having an Ace in the Hole, a very small business (or two) that you start on the cheap. For some, it becomes the stepping stone to a new career, for others it's a sideline that offers both extra income and welcome tax deductions. Everyone we know who's got an Ace feels more secure for having it.
4. Make the Most of the Money You Bring Home
The further it goes, the less you need to earn. Practicing the fine art of penny pinching means you can have the things you really want -- without spending your life working for the almighty buck.
Think of the basics before you buy: Decide if you really want it -- then comparison shop, negotiate for the best prices, barter, and if possible, buy used.
5. Turn Your Debts into Golden Investments
Pay down those debts! It's a powerful antidote to the "payday to payday" blues.
Here's a hot tip in case you're just tuning in: If you're in the 28% tax bracket, paying off a typical 17% credit card balance is the same as earning 23.5% before taxes. But unlike the stock market, paying off those plastic monsters is risk-free, guaranteed, and tax-free. (It's tax-free because you don't have to pay taxes on money you save yourself -- even if it's at 17 %!)
With their low minimum payments each month, credit card companies want you to think it doesn't really hurt you very much to owe them money. But the less you send in, the more you'll pay and the longer it'll take you to get out from under.
Beat those plastic purveyors at their own game, and pay off your balances as fast as possible. Even a few extra bucks a month will yield a big return.
Here's the best long-term strategy: Stop charging items you can't pay for or don't need.
If you become a pocket change investor in your home, car, or student loan you'll save a ton of money and be that much closer to financial freedom.
In addition to showing you how to whittle down those loan balances, we'll help you save money on big-ticket items, so you can keep future debts to a minimum, and future pleasures to a stress-reduced maximum.
6. Map out Your Own Financial Future
Ever think, "If I had a million dollars, I'd ..."? Well, chances are you will have that much, and then some. Of course, you won't get it all in one lump sum, but it's a bundle all the same. Managing it wisely will make all the difference for your future.
If the thought of budgets, asset allocation, and financial plans give you a headache, you can join the finance phobic crowd or check out Invest in Yourself.
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