The year 2016 has dawned and brought with it a renewed hope for a better tomorrow. However, better tomorrows don’t just happen by themselves; they have to be created. If in the evening of your life, you wish to put your feet up while rocking on that easy chair, you need to begin the marathon of saving right away.
Here are a few essential tips to help you build a fortune like the “Oracle of Omaha”:
Minimize Your Losses:
Ensure that any mode of investments you put your money in are carefully evaluated, and downsides accounted for. Basically, do not invest in instruments which do not inspire confidence.
Also, plug the “leaky bucket”. We do not realize the amount of money that trickles away in extras like late payment fees, paying incorrect taxes, extra services at hotels or airlines, etc. Eliminate these pitfalls, especially the credit card monster.
Work on Building a Balanced Portfolio:
Never put all your eggs in one basket. A good portfolio must have it all – mixed investments, high potential rewards in the long and short term, and tax efficiency too.
Save Whatever You Can Spare:
Every penny counts. It does not matter how much you save, but save you must, and regularly too. At the same time, have at least six months of liquidity available in your bank to cover expenses in a financial emergency.
Set Financial Goals and Plans:
Having a financial goal is essential, but not enough on its own. Planning and execution are crucial factors in getting there.
Don’t Spend Future Earnings:
Giving into temptation frequently may be denting your future wealth, depriving you of financial comfort later. Learn to differentiate between wants and needs today, for tomorrow’s security.
Familiarize Yourself with Finances:
Ignorance is not bliss; at least not in finance. Learn all you can about finances, so you aren’t dependant on external help for your financial planning needs.
Minimize Your Taxes:
Paying taxes is fine, but paying them unnecessarily is not. Learn and implement all you can about tax saving instruments so you can reduce your financial burden.
DIY What You Can:
As far as possible, avoid hiring services for home repairs or other help if you can manage on your own. Limit dining out and other luxuries too. The more you forgo conveniences, the more you will be able to save.
Make Health a Priority:
Prevention is better than cure and cheaper too. Investing in your health will mean lower hospital bills in time, as will timely investment in a good health insurance scheme.
Make Negotiation a Habit:
Some guts, practise and time will enable this. It’s important to try and negotiate every possible financial transaction, so you never lose money for the sake of trying.
Make the Most of Social Security:
A little understanding of the fine print can help you maximize social security benefits. When you retire, you could enjoy almost $16,000 in bonus funds.
Any portfolio expert would tell you that saving has to begin as early as possible, ideally in your late 20s. However, if you have not yet begun, don’t worry – better late than never. Remember, “Every drop makes an ocean and individual efforts a revolution”, which couldn’t be more accurate when it comes to saving money!