It’s not about how much money you earn. It’s what you do with the money that matters. In this video, I’m going to show you a business strategy on how to manage your money. I’m not gonna tell you what to invest in. That’s not my role. Here are the best ideas of what the best professionals do to manage their money. Learn more from Tom LIVE at the next Summit event: http://bit.ly/2xgZ6Uq ———— I hope you got some helpful tips and new ideas from this video. To ensure you don’t miss all my FREE training videos all you have to do is sign up here with your email: http://bit.ly/TomFerry-VideoTraining Get a FREE copy of my new book: http://bit.ly/2Bblstw Download FREE Agent Scripts and Resources: http://bit.ly/2iDEjpJ Tom Ferry Coaching: http://bit.ly/2eP8UlA
Properly managing your money, like the rich, involves adopting smart financial practices that can help you build wealth and achieve your financial goals. Here are some key principles to follow:
1. Create a Financial Plan:
- Set clear financial goals for the short, medium, and long term. Your goals should be specific, measurable, achievable, relevant, and time-bound (SMART).
2. Budgeting:
- Create a detailed budget that tracks your income and expenses. Allocate a portion of your income to savings and investments before spending on discretionary expenses.
3. Live Below Your Means:
- Avoid excessive spending and lifestyle inflation. Save and invest the difference between your income and expenses.
4. Save and Invest Wisely:
- Build an emergency fund to cover unexpected expenses, typically three to six months’ worth of living expenses.
- Invest in a diversified portfolio of assets, such as stocks, bonds, real estate, and mutual funds. Consider consulting a financial advisor for personalized investment advice.
- Take advantage of tax-advantaged retirement accounts like a 401(k) or IRA to save for retirement.
5. Debt Management:
- Minimize high-interest debt, such as credit card debt, as it can erode your wealth. Pay off debts as quickly as possible, starting with the highest interest rates.
- Use debt strategically, such as taking out a mortgage for a home or a loan for an investment with the potential for a higher return than the interest rate.
6. Build Multiple Streams of Income:
- Consider ways to generate additional income, such as starting a side business, investing in income-producing assets, or pursuing passive income opportunities.
7. Continuously Educate Yourself:
- Invest in your financial education by reading books, attending seminars, and staying informed about financial markets and investment opportunities.
8. Protect Your Assets:
- Purchase insurance coverage to protect against unexpected events, such as health issues, accidents, or property damage.
9. Estate Planning:
- Create a will or trust to outline how you want your assets to be distributed after your passing. Estate planning can help minimize estate taxes and ensure your wishes are carried out.
10. Avoid Impulsive Purchases:
- Before making significant purchases, especially luxury items, take time to evaluate whether they align with your financial goals and whether you can afford them without compromising your financial stability.
11. Seek Professional Advice:
- Consider working with financial advisors, accountants, and estate planning attorneys to develop and implement a comprehensive financial strategy tailored to your specific goals and circumstances.
12. Stay Disciplined:
- Consistency is key to long-term financial success. Stick to your financial plan and make adjustments as needed to stay on track.
13. Philanthropy:
- Consider giving back to charitable causes that are meaningful to you. Charitable giving can provide both personal fulfillment and potential tax benefits.
14. Monitor Your Progress:
- Regularly review your financial goals and track your progress. Adjust your plan as necessary to stay aligned with your objectives.
Remember that building wealth takes time and discipline. The rich often accumulate their wealth through a combination of smart financial management, strategic investments, and a long-term perspective. By following these principles and consistently working toward your financial goals, you can improve your financial well-being and move closer to financial success.