Posts Tagged ‘Money’

The 30% Strategy

Taking control of your finances is hard. It is very hard, actually. The most challenging aspect is the actual beginning. The first step is the hardest, but one that is essential. Once you start, the rest falls into place. It’s a matter of developing healthy financial habits. Once you start, you’ll build momentum, and before you know it you’ll have yourself a deeply ingrained habit. A habit of saving and paying yourself first. I call this the 30% strategy.

The 30% strategy is actually a simple process of investing, saving and helping. It does not matter if you have a lot, or have very little. The 30% strategy is simple. For every dollar that comes into your pocket take 30% off the top. This 30% goes into three spots each being 10%.

The first ten percent goes into an investment account. This money will accumulate and you will use it to fund your investments. Remember that the goal of your investments will be to create or buy assets. Assets are things that will put money in your pocket.

The second ten percent goes into a savings account. Always pay yourself first. This is the money that you will have to use when you retire, or your kids go to college. This account is for long term savings.

The third ten percent goes into a charity account, or tithing account. There’s nothing better than to give. Giving is what makes us human. Reaching out and helping other who are less fortunate is a blessing that gives on giving. The more you give, the more you receive. It’s a cliché, but in this case, it is actually true.

It’s a simple plan, but it is not easy. If it was easy, everybody would be doing it. Very few do, and that is the challenge. You may be tempted to skip a month or two at some point, but resist that urge. Once you stop, it’ll be much harder to start back up again. Instead, make sure you continue doing this each week, or pay period. You can choose different percentages, more or less, but do not be tempted to make it too easy on yourself.

You want to accumulate money as quickly as possible. Once you have a good amount accumulated, it’ll be much easier to see the benefits and results, and that will help you keep the program going. Also don’t be tempted to try and pay off all of your bills before you start. The longer you put it off, the harder it will be to actually start. Start now, and make it easy on yourself.

What are Assets?

According to the dictionary, an asset is a thing of material value or usefulness that a person or company owns. When it comes to personal finance, the definition of an asset is somewhat different. In personal finance, an asset puts money in your pocket. If it doesn't put money in your pocket, it's not an asset.

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