Setting Your Goals – Think short-term, mid-term & long- term.
Financial success is based on having both long-term, written goals, and a series of short and mid-term tactical plans to get you there
Be Prepared – Get educated & do your homework
Often falls to the “CFO at Home”
Develop a Wealth Building Plan – Figure out how to position assets & deploy income.
Figure out what resources/assets you have
Make sure those assets are positioned well positioned
How do those investments compare with alternatives?
Have a specific plan for your discretionary income
You Need A Team – Building wealth is not a one-person task. We all need a little help. You need a team.
Track Your Progress – Money is not the most important thing in life, but it is important. You need to track your progress by using tools like a personal net worth statement.
Personal Net Worth Statement
Personal Equivalent of a Business Balance Sheet
Assets listed line by line (money in the bank, retirement accounts,etc)
Debt listed line by line (Credit Cards, Student Loans, etc)
Net Worth = Total Assets - Total Debt
Regularly track your goals against your Net Worth
Diversification – Spread your assets & your risks around.
Diversification can not only refer to the mixture of stocks and bonds in your portfolio, but also to things like having an emergency fund, having some exposure to real estate, avoiding having too much invested in a single stock, etc.
Be Careful With Debt – Avoid debt that comes from living above your needs. Be cautious about using debt to acquire assets
Avoid debt that comes from living above your means
Becoming debt-free can become more important as you approach retirement