When do you ever get to actually enjoy any of the money you make. You work 40 to 60 hours per week for money that just sometimes feels like it just goes to the bank, the taxman, your internet company, and the petrol companies.
If you’re smart about your money, then you know that there are certain things you should be doing with it. Having certain goals like saving for retirement or an emergency fund can be your safety net if anything should go wrong.
Here are 5 tips to get you started with investing your way out of the rat race.
1) Pay Yourself First:
The concept of paying yourself first is nothing new; yet people still ignore this simple tip all the time. Set up your accounts to automatically tithe off a portion of your incoming monies into an investment or retirement account. This will safeguard that money from any sudden spending sprees and give you a base from which to develop an investment portfolio.
2) Improve Your Financial Literacy:
Want to find out from someone wealthy how they got there? Here’s a clue – read one of their books! The library and bookstore are full of them. Here’s a good list of personal finance books to get you started.
Though reading a book is slightly more of a commitment than watching a TV show or reading a magazine, the return will be well worth it. Financial literacy is something that can benefit you for years to come.
Use this opportunity to find out as much as you can about the kinds of investment vehicles you think might work for you. Financially savvy people who may be a bit farther along the rat race exit ramp than you are – don’t be shy to model what they’ve done if you think it’ll work for you. Take a class on share trading or foreign exchange if you feel this could work for you.
3) Pay Down Bad Debt:
Take a deep breath and tell the truth – are you carrying any bad debt in the form of credit cards or personal loans? If so, do anything and everything you can to pay it down – and cut up those credit cards with the highest interest rates as soon as you’ve paid them off. Sell what you don’t need, take a second job, rent out your garage – but get that debt monkey off your back.
4) Make A Plan:
Ensuring you have a clear, easily achievable savings and expenses plan to follow will enable you to keep bad debt in the past and move forward towards your financial freedom goals. Be very clear on what you want to achieve, how much you’ll need to earn, save, or raise, and add in some time-frames. Make this your ‘get free of the rat race’ plan and stick to it.
You’ll probably find it easier to cut expenses that bring in more money to begin with, but once you start to focus on growing your income, the sky’s the limit. Though it seems like such a small thing to save a little bit of money here and there, thanks to compounding returns it will be sure-fire way to exit the race race and be on your way to financial freedom.
5) Get Some Good Advice – And Make The Most Of It:
If you do use a financial planner of some kind, list any and all questions that cross your mind. Make every meeting with them count – you are paying for their time after all. Get the most information you can. Make sure you’re getting everything you’re entitled to from tax mitigation strategies to income maximization plans.
It is possible to break free of the rat race – you just need a plan, some effective strategies, a lot of discipline, and the capacity to act.
Do you have any handy tips or hints for investing your way out of the rat race that you’d like to share? Add them in the Comments box below.
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