Many people dream of having a big retirement fund so you can retire without worries, they dream of being financially secure and being able to build their wealth into something one can only dream of. In order to achieve such wealth, it is up to the individuals to make the right decisions. However, sometimes what we think is the best decisions turns out to be some of the worst decisions we’ve ever made. Let’s face it, not all of us are perfect and below are some examples of what I’m talking about.
- Control your money – What do I mean by that? This is pretty common sense, never let anyone else decides where you put your money and what to do with it(financial consultants/advisors) without having you there to see what’s going on and where the investments are being made. Never EVER give them the total control.
- Take the 15 year mortgage – If you can afford to buy those brand new electronics, expensive furnitures and going out all the time. You can afford to elect the 15 year mortgage plan. Why? because you’re going to be saving huge amount of interests just by cutting your mortgage to 15 years instead of 30! At the same time, you’re building yourself wealth.
- Not having a goal – In order to build and accumulate wealth, you need to have a plan. You need something to keep you motivated, something to work for. To save money, you need something to save FOR correct? My advice is just open an online savings account at ING Direct or SmartyPig.com. SmartyPig is nice because you can create as many sub accounts as you want to save for whatever you want(car, house, TV).
- Never tap into your 401K plan – The same goes to other retirement plans you have. I do my best to not touch any of it no matter what happens. Most people will take out loans from their 401k without knowing the impact it can have on their future earnings.
- Not using cash enough – I’m sure credit cards are very convenient and I’m sure most people will still use credit cards as an excuse to not feel so guilty after buying something. So when you buy that expensive Apple product for $2,000 after tax, you’re actually paying another $100-$200 hidden cost just for using the credit cards. Stay away from it if you want to build your fortune.