How to become a Millionaire; Part 1
#1: Develop a written financial plan!
Saying you want to be wealthy isn’t good enough, you need to come up with a workable plan and put it on paper. The written plan forces you to do something. Calculate what you need to earn and how to invest. The plan isn’t just the goal, it’s the whole thing; the dream, the goals, the options. The options are “scenario planning” all the ways you can accomplish that goal such as opening a Roth IRA or contributing to a 401k.
#2: Save, Save, Save
The end result of your financial plan should be systematic investment. Get into good habit of saving money. Build an emergency fund in a money market account so you don’t have to raid the rest of your savings and investments when the unexpected major expense arises. Make a point of saving at least half of every pay raise.
#3: Live below your means.
Don’t be a walking billboard for overpriced designer clothes, shoes, sunglasses or jewelry and don’t allow your house or car payment to be budget busters. Use Bank Rate’s mortgage calculator to determine how much house you can really afford.
#4: Lay off the credit.
Some people say that if you can eat it or wear it don’t put it on the credit card. That’s good advice but take it further. Try not to put anything on your cards that you can’t pay off in the next two to three months. You need only one or two credit cards. If you have a fist full, pay them off! Remember, debt holds you back.
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