Design your future. If you could create the perfect world, what would it look like?
If you can imagine it you can cost it. When it’s costed, your dream has become a target.
My dream is to accumulate £300,000. I’ve budgeted £80-100k to buy a 50’ Beneteau yacht moored in Gibraltar harbour and the balance is to live off.
#2 Spend less than you earn
You will NEVER be wealthy if you ALWAYS spend all your money.
If you did this one thing you would become wealthy, as your savings would increase every pay day. It’s not magic, it’s maths.
#3 Invest a stressless amount of that portion of your money you don’t spend, at the highest growth rate you’re comfortable with.
The higher the potential growth the higher the potential risk. The higher the growth rate, the faster you will accumulate wealth.
A growth rate around 6% is not only achievable, but represents a medium risk profile.
I have a riskier profile (and a shorter time scale than most) so I invest 100% in an Index Tracker.
If the amount allocated to your target isn’t stressful, you stand a better chance of maintaining the investment and achieving your target.
I’ve calculated I need to invest £1400 pm. To generate this income I need to work the equivalent of 2 full time jobs and save 70% of the income.
#4 Automate the investment at the beginning of the month
Don’t leave your target to chance. Protect your target by allocating funds to it before anyone else has a claim against those funds. Do this by organising an automatic payment from your bank or credit/debit card on the first day of the month.
Pay yourself first. You earned it. It would be unfair if you weren’t the first to reap the benefits of your labour.
Your target now has a plan. A dream without a plan is just a wish.
The plan has to be executed and it’s progress monitored. A ship’s progress is affected by wind and tide, but providing the destination is kept in sight, and course changes are made to keep on track, the destination is assured.
#5 Be patient
This is not a get rich quick plan. They don’t exist. This is a get rich eventually plan, and get rich eventually is better than get rich never. The accumulation of wealth takes time, patience and determination.
I’ve calculated I need 10 years to achieve my goal. That’s 10 years at 70 hours per week.
Everything comes at a price. Most people aren’t prepared to pay the price.
It is a simple plan, but it’s beauty is its simplicity. If a plan is simple then it is achievable by anyone.