The 4 Laws of Financial Prosperity: Get Control of Your Money Now! by Blaine Harris & Charles Coonradt

Author:Blaine Harris & Charles Coonradt [Harris, Blaine]
Language: eng
Format: azw3
Tags: ECONOMICS/Accounting/Financial, BUSINESS &#38
Publisher: Financial Wellness Group
Published: 2013-12-01T16:00:00+00:00

On the other hand, if a 55-year-old worker who has never saved anything decides to get serious about retirement and starts saving $500 a month, which he invests at 8%, ten years later at 65 he will have $91,473.

Both of the above people saved $500 a month for ten years. Both earned an average annual increase of 8% on their savings. Yet the young person earned $908,851 more than the older person. The difference is time. The sooner you start on a savings and investment program, the better. It is better to save now and play later, than to play now and save later. Time is money, and the sooner you get it working for you, the better.

If you are already 50 or 55, don’t assume it’s too late for you to take control of your finances. If you start putting $500 a month into an 8% mutual fund at age fifty, you will have $295,510 when you retire at age 70. That’s a lot more than if you didn’t start saving at all.

In addition, people who are in control of their money have the capacity to be more charitable. If it were not for charitable people and charitable attitudes, our churches, museums, art centers, hospitals, schools, and society in general would suffer. Charitable people have trimmed unnecessary expenses and redirected them to greater priorities, which affords them the privilege of donating to worthy causes. True financial success requires proper financial balance.

The key to any kind of financial success is learning to live on less than you earn, thereby creating a surplus to invest in assets that earn interest or increase in value. Trimming is the process by which we do this. But no matter how good we are at trimming, it never seems to work if we wait until the end of the month to see how much is left over to invest. Pay yourself first, not last. As soon as you get your paycheck, take the 5%, 10%, or 15% you have identified as surplus to reduce debt and buy investments, and take that out first, forcing yourself to live on what’s left over.

Most people who do this say they hardly notice any difference in their lifestyle. The tracking process alone can usually uncover enough inefficient spending and downright waste to more than cover a 10% debt elimination and savings program.

Most Americans, if they start early enough, can achieve financial security on a 10% savings program. If their goals are more aggressive, or if they don’t start until later in life, 10% will not be enough. But before you determine how much surplus you have to create, you must first figure out where you are, where you want to be, and how many years you have to get there. These numbers will give you a pretty good idea where you have to start.

At first, I didn’t believe Mary when she told me that after trimming my living expenses to the 90% level, I wouldn’t miss that extra 10%. She said I might even want to start saving more than that—maybe 15% or 20%.

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