YOUR FINANCIAL FUTURE / So You Want to Live Like a Millionaire!

By Roxanne E. Fleszar, CFP, ChFC

Folks of all income strategies would love to live like a millionaire. Someone free from immediate cash concerns, who can afford to breathe easy most mornings because they have an emergency reserve, investments and a comfortable place to rest their head in the evening. So how do you get from where you are today, to that place?

SET YOUR GOAL What is most important to you? Buying a house? Educating your children? Retiring at age 48? Traveling around the world? Moving to another state or country? First, you need to spend the time to determine what is really important to you. Then establish a time line to meet that goal. Without a timeline, the goal may get pushed off year after year or never get accomplished.

PAY YOURSELF FIRST   The financial author David Bach recommends saving one hour of your weekly earnings per day; if you are earning $50,000 per year, you would save $24 per day.

Set up at least two savings accounts. The first is an emergency reserve typically at a bank or credit union. Currently this account will earn 1% or less; the funds are there when you encounter one of life’s unexpected events. And face it, we all face those. This account should hold a minimum of three months, but preferably 6 months of living expenses; if you are not there, start now.

The second is an investment account invested to earn a greater long-term return. It would typically be invested in mutual funds, ETFs (exchange traded funds), bonds and stocks or a combination of all of these. Not sure how to invest? Look for a free course online or in your local community.

AUTOMATE YOUR SAVINGS Have funds directly deposited from your checking account or paycheck to your emergency fund as well as your investment account.

Are you contributing to a retirement account a work? The contribution is automated through your payroll or human resources department. You may also set up an automatic withdrawal from your checking account to be transferred to an IRA, a mutual fund or a brokerage account. Money that is not in your wallet, is less likely to be spent.

PAY OFF DEBT   Credit cards are so easy to use and are fine, especially if you receive reward points, if you can afford to pay the balance every month. If not, the interest expense can keep you in debt for a very long time. So, prioritize your debt payments and pay off the ones with the highest interest rates first.

USE CASH   If credit card debt has been a problem for you…chuck the cards. Oh, you should keep one for the occasional time that you need to rent a car and make flight arrangements, but for otherwise, pay cash. Give yourself a weekly cash allowance and try your best to live within that amount. Meanwhile, write down all of your expenditures for a month to get a handle on how you are spending money. See what expenses can be cut and divert those funds to paying off debt or savings. Trust me, this works!

SAVE EXTRA INCOME   If you receive a tax refund, get a bonus or a large commission, don’t spend it, save it.

GENERATE ADDITIONAL INCOME   Do you have the ability to earn extra income? Could you become a dog walker, create and sell jewelry, crew on a charter boat part-time etc.? Ascertain what skills you have and then bank all of the income.

INVEST IN YOURSELF   If you read how self-made millionaires achieved their goals, most of them invested in themselves. They took courses in enhance their skills, became friends of successful persons in their field, attended conferences etc. Interestingly, these folks continue to invest in themselves, it is a life-long process.

The internet is full of resources and most are free. You can start by spending 30 minutes each day reading or listening to a podcast each day. The cumulative steps that you take will allow you to up your game so you may reach your goal(s). Good luck!

Roxanne E. Fleszar, CFP, ChFC is President of Financial Resources Management Corp, a registered investment advisory firm with offices in Key West, Boston and Naples.

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