We’re born in a money game, we live in a money game; it only makes sense that we learn how to play the game. In an era where 95 out of 100 workers at age 65 are either still working or broke and consumer debt in Canada is about $450 billion, it is very important to learn how to play the game at the earliest possible time.

When It Comes To Finances, How Much Do You Know?

If you’re like most people, you probably know little about personal finance. Perhaps you think long-term security is impossible on your income. But the truth is, no matter what your income level, you can achieve financial security – if you take the time to learn a few simple principles about how money works.

1. Pay yourself first – Before anyone else gets claim on your money, pay yourself first by putting a set amount aside each month into a savings account or investment. Compound interest is the strongest force in the universe—for your money—, but the sooner you start the better off you will be.

 

Example – You save $200 a month for 35 years, this is what your situation will potentially look like, depending where you keep your money:

At 3%, you will have $148,000
At 6%, $286,370
At 12%, 1.3 Million

2. Adjust your priorities – Don’t spend unnecessary money, do you really have to spend $40-60 dollars a night when you go out to a bar or club?

 

If you do what others do, you will get what others get; for 95 out of 100 people at age 65, and that is are either still working or broke. Is that what you really want? By simply cutting back on the daily coffee or a weekly pizza, you can actually build a considerable amount of money by the time you retire.

Example – If you buy ONE medium coffee each morning costing $1.50 turns into $7.50 weekly, or $30 per month. Now turn around and take those $30 dollars you are not spending on your coffee, and invest that at %12 for 35 years and you will have $248,033.

Now imagine for those who smoke along with your coffee. If you were to quit, and were smoking one pack a week. At $7.00 a pack, that is $28 a month, on top of the $30 that you are now not spending on your coffee, in the same 35 years you will now have $479,531; not to mention the health benefits, and most likely a longer life to enjoy your money.

 

3. Avoid the credit trap – Of all the threats to financial security, none is more dangerous than debt.

If you want to buy something, and you cannot buy it cash, then you cannot afford it. If you finance something like a car, or a TV, you DO NOT own it. The bank or financing company does. So instead of paying interest to someone else just to society’s expectations, save your money and buy the car you REALLY want. When others see you driving a crappy or average car, it doesn’t matter because you know you will be on track to having what many others will not; financial independence.

Example – If you owe $2,000 in credit card debt and are making just the minimum monthly payment, it will take you more than eighteen years—and a total of more than $4,600—to pay off your balance.

 

You Can Do It!

At first glance, achieving financial security may seem an overwhelming task, but if you follow those 3 simple “rules of the game” not only will you live a much happier debt-free life, but you will achieve financial independence.

While it may be tempting to hope for a financial miracle, it is much wiser instead to be on a sure thing, and follow the proven principles which have already worked for so many families. Most important of all, whatever your situation might be, it is important to get started today

YOU are in the driver seat, YOU have the information, and all you need is the drive and determination to take control of your finances.

Don’t let your future be a question mark and take what life gives you; decide what YOU want to get out of life, plan and work for it.

 

 

 

 

Jaime A. Farfan

You may write to Jaime by e-mail at
jaime_genius@hotmail.com. Due to the
large amount of e-mail he receives, you
can expect a response anytime between
2 to 5 days. He will respond though.