A Prosperous Future
© 01.01.08 By Peter Gustavson
2008 is upon us and now is a good time to make some changes in your life to ensure that this year will be the first year of a prosperous future. There are five activities you need to master in order to get ahead financially. The first thing you need to do is stop spending more money than you make. Indeed "Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come."
What you need to do is sit down with a pen, paper and calculator and discover how much you spend each month. Create a column for every regular expenditure: heat, electricity, groceries, insurance, phone, internet service and so on. You need to discover right down to the penny how much money you spend every month. Some of the categories such as "entertainment" may fluctuate; you will want to put those categories at the end of the list. The idea is to find out what you mus have in order to survive month to month and then you will have a handle on your discretionary income. Unless something is really wrong you will find that your necessary expenditures leave you at least a little bit of money at the end of the month. Oh, by the way, you do need to create a category labeled "emergencies." This fund should be added to each month with a total growing as you rollover from month to month. Anyway, the idea at this point is to come to a precise figure: "we need $3500 each month to pay the bills" or whatever. As I've already said, unless there is something really out of whack that figure should be (at the very least), a few hundred dollars less than your take-home pay.
Now that you have an outline you need to create an actual monthly budget. This budget will allow adequate monies for all the necessary expenditures and then provide for another 10% of your take-home pay which you will put into a savings account. This 10% toward savings must be treated as a necessary expense. In other words, you don't spend your extra income on fun and frivolity and hope that you will have a few dollars to put into savings. Rather, you take the 10% right off the top, stick it into a savings account, pay the rest of your bills and what ever remains will be available for eating out, going to movies and so on.
You should also skim 10% off the top of your take-home pay to donate to your church or another charity of choice. There is a principle that comes into play here known as "reaping what you sow." Whether you are religious or not it doesn't seem to matter; when you are generous with your income, that income seems to stretch further than it normally would.
The fourth thing you need to do is start a business which you can work at until the day you die. You would be foolish - indeed an idiot - to depend upon Social Security in any way shape or form. Additionally your retirement package at your place of employment may or may not be available to you when you reach retirement age. The wise approach is to prepare now (hopefully in your 30s or 40s), by creating an independent source of income.
By the time you reach mid-life you should have plenty of experience and education to draw upon in creating a stream of income. Don't get caught up in some kind of get rich quick scheme; instead draw upon the native abilities which have risen to the top at this point in your life. For instance, if you find that you enjoy training dogs and you have an aptitude for it, then look toward some kind of business which will put you in a position to do that for money. At this point in your life it may very well be just a hobby which brings in a little extra money for savings or vacations and the like. Whatever it is that you enjoy doing - and are good at - can be turned into a means of making additional money.
This money making venture may find its origin in a part time job. In other words, you might need to generate some additional money in order to begin your own business. If this is the case then create a plan that will allow you to systematically generate and save the money you need to begin your business. For instance, you may plan to work for two or three years at a half-time job in the evenings and weekends in order to generate enough money to begin your real estate business. At that point in time (hypothetically), you may have come up with enough money to put a down payment on a rental property. You might need to keep the part-time job until you're able to put money down on another property before you have established the business. These details will be up to you to take care of. The idea is to find a way to make money now that you can continue throughout the rest of your life.
The fifth thing you need to do in order to be prosperous is to take time with your family and friends. This might seem like a contradiction in light of what I've just said about the need to work extra hours in order to get ahead. However, all it really requires is self-discipline. In my case, for instance, I work six days a week 12 to 14 hours a day. I began my day at about 5:30 and conclude at dinnertime. Evenings - and one day off each week - are free to spend with my family. Moreover, the extra money allows for regular family vacations. The point is, anyone who is willing to bring discipline into their life will have time to work plenty of hours and spend plenty of time with the family. The problem is, most folks are sloppy with their time and waste considerable hours on frivolous self-centered pursuits. Anyway, time spent with your family will recharge your batteries so you can jump back into the rat race when the whistle blows. Moreover, the relationships you develop with your wife, children and friends are the most valuable "possessions" you will ever have.
To conclude, 2008 can be the first in many years of prosperity if you: create a budget and stick to it, save 10% of your income, donate 10% of your income, create an additional stream of income with your own business and finally be sure to spend quality and quantity time with your family.
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