Wealth Creation Blog

If you are considering ways to create wealth, you are most likely familiar with the general terms for building your investment strategy. It is important to build on what you know by becoming more specific is the ways that you apply your wealth building block in order to create infinite investment options. Although, there are a great number of options available to create wealth, the basic strategies include bonds, cash and stocks. Now, let us take a closer look at all three.

Bonds

Bonds are also known as ‘debt instruments’. Basically, they are the way that companies on all different levels of the government have access borrowing to money. Fundamentally, when you purchase a bond, you are in fact loaning out your money. In theory, you will in return receive payments of interest in addition to the original amount once your bond matures. Rarely, do investors hold the bonds until they are mature. The bonds are typically purchased, and then it is sold on the secondary market several times over as the bond ages. This means that the actual face value of the bond is susceptible to variation.

Cash

If you hear someone talking about the amount of cash that they have in his or her portfolio, this does not mean the actual cash in their wallet. They are speaking of cash investments. With a cash investment, the amount that you invest does not fluctuate. Plain vanilla savings, money markets and CDs are common cash investments.

Stocks

If you own stock in a business, you own part of that business. You may only hold a few shares, but no matter how small the percentage ownership is ownership. Now this does not give you the right to go to the home office and tell the CEO how to run the place, nor does it give you the right to wheel out an office chair or eat a snack in the employee lounge. Holding stock in a company simply means that you are entitled to a portion of the money that the business earns. For example, if your shares add up to 10% of the company and the company earns $100, 000, your shares are worth $10,000.

Sean Rasmussen
Success Communicator
Aussie Internet Marketer © 2004 – 2009

Knowing how to manage your money can save you a significant amount of cash. If you learn how to successfully manage your money, you will learn how to keep your pockets full of cash. The best thing about learning how to manage your money is that you will be able to make wiser investments, work less and create the wealth that you desire.

Start with a Budget

The first step that you need to take in your journey to financial freedom is to put together a budget. By creating a budget, you will be able to see how much money you make, how much you spend and how much you can save. The easiest way to create a budget is to make a list of all of your income for one month.

Next, make a list of everything that you spend money on each month. It is important to be honest with the details. If you stop by the coffee shop for an espresso twice a week, it counts. You will easily be able to see if you are spending more than you make and where you can cut back on unnecessary spending and save money each month.

Then What?

Just by listing all of your expenses for one month will give you the perspective that you need to develop a key ingredient to managing your money. Once you learn to identify each individual expense that you are spending money on, you will learn how to decide whether you actually need the things that cost you money. This is perhaps the most basic money managing tip that you will ever learn.

Another way to manage your money is to keep it in the bank. As soon as you put the money in your wallet, you are at risk of spending it on something that you do not need. If you have to go to the trouble of getting the money out of the bank, then you are less likely to waste money on spontaneous spending.

Finally, commit to putting back a certain amount each month or even each week if you can. Ten percent of your monthly earnings is usually a good place to begin. Take the money that you save and deposit it in a high interest account. As your money grows, you may want to invest in the stock market, real estate market, or a number of different opportunities.

Sean Rasmussen
Success Communicator
Aussie Internet Marketer © 2004 – 2009

It holds true with all things throughout life that if you want to successfully accomplish your goals, you have to stick to the plan. The same goes for wealth creation, you have to follow the specific rules of thumb if you expect to succeed.

The first rule of creation wealth is to make sure that you are paid first. That simply means that no matter how much you make each month, you set aside at least ten percent for yourself. Put the money in your investment or savings account where it will continue to grow. Take the rest of the money to pay your bills and purchase necessities. Just make sure that you get your cut first.

Now, many people hear that and they think that they cannot do it. These people feel like they are working as hard as they can already and are barely making ends meet. They believe it is impossible to put any money aside for savings and investments.

Think About It

Before you give in to such negative thoughts, take the time to think about where your money is going every month. You are sure to find places where you could spend a little less. The problem most people seem to have is that they believe that you are supposed to make as much money as you possibly can, pay all of your bills and then just spend the rest. If you stick to this kind of plan, you will continue to live hand to mouth for the rest of your life.

Sit down with a pen and paper. Make a list of all of your income sources and determine your total monthly income. If your income varies from month to month, simply use an average to get the correct figure. Next, make a list of everything that you pay for each month. If you have accounts that require quarterly payments, work out the monthly average to get an accurate calculation. Once you know where you stand, you will be able to work more effectively toward creating the wealth that you desire.

Sean Rasmussen
Success Communicator
Aussie Internet Marketer © 2004 – 2009