Below are five decisions that will determine your financial future…

1. How Much You Save

Being able to save some of your income is the NUMBER ONE determining factor in how financially successful you will be! The only way you can get ahead financially is to save. What you can turn those savings into then depends on what you do with the money, but if you’re not saving anything you have nothing with which to build wealth. What strategies do you currently have in place to save money?

2. How Much You Borrow

Debt can be a financial noose around your neck. That’s because there is so much money being borrowed to purchase things that are only going to go down in value. Borrowing can be a good thing if it’s used for investment, however most people get bogged down with a huge mortgage which then prevents them being able to save and invest, let alone borrow and invest. Therefore, one of the key decisions that will impact on your financial future is how much money you have to repay. If it’s not too late, then be mindful of how much you’re willing to borrow to buy a home as the higher your mortgage, the harder it is to create wealth outside of the home. If you already have a home and mortgage then the trick is to get the mortgage paid off ASAP! Leading to…

3. How Quickly You Pay Off Debt

Many people don’t take debt seriously enough because they don’t understand the long term implications of borrowing money and having to pay it back with interest… the banks do though!

• Pay down credit cards. Generally, credit card debt has the highest interest rate (for this reason, avoid credit card debt wherever possible).
• Pay down other non-deductible loans. A car loan would be an example of a non-deductible loan. Your mortgage is also a non-deductible loan.
• Pay down deductible loans.

4. How Seriously You Take Insurance

Far too many people ignore the importance of insurance because they believe it’s a waste of money and/or don’t think bad things will happen to them. You only have to turn the news on every night or read the newspaper each day to see the reasons why insurance is so important. And when it comes to insurance the realisation you must have is that you’re ability to earn an income is your most valuable asset. That why if you have a family who depends on you that you have to have adequate life insurance. And whether or not you have a family, income protection insurance is a must. Failure to have these means financial ruin if anything serious happens. And trust me, no one who’s ever received a life insurance cheque or claimed on an income protection insurance policy has ever been heard to say, “I wish I had less insurance.”

5. How Much You Invest

Every time you spend a dollar you’re making a choice between spending that dollar today versus having it available to spend in the future. If you choose to save a dollar for the future it can then be invested and grown into more. This is the essence of creating wealth and how much wealth you can create will determine the choices you will have and the lifestyle you can lead in the future.

Cheers,

Daniel