subject: Five Years to Riches [print this page] Five Years to Riches Five Years to Riches
Of course, there are a few things you have to do to get yourself on the right track.
1. Evaluate the Present.
Take a close look at your current financial position. Where does the money come from and where does it go? What is your debt position? Are you sticking to a budget? Do you even have a budget? Are you upside down in your house or car? If you really aren't sure what happens to your money, try writing down every penny you spend for two to four weeks...you will likely be surprised at how much cash you waste! The important point is this: if you want to be wealthy, you need to know and understand exactly where your money goes.
2. Dump the Debt.
There is "good debt" and "bad debt." Good debt is borrowed money that earns you more than it costs. That is, the borrowed money is invested in some way such that the amount you are profiting is more than the interest you are paying to borrow it. (This is the way that home mortgages used to work!) Any other debt is bad debt. Period. If you are carrying bad debt, you need to get rid of it as quickly and as cheaply as possible. If you are upside down in your house or car, get rid of it. If you are buried in consumer debt, get rid of it. You can't become rich if you are spending significant money on debt payments.
3. Stop the Cycle.
Quit using credit. If you can't afford to pay cash for it, don't buy it. Never use credit for short-lived assets like food or gas or even clothes. Decide what things you need, set priorities, and save up to buy them. While you're at it, sell off all those things you have accumulated that you no longer want or need. CraigsList is a great place to start!
4. Start a Business...or Several!
The best way to become independently wealthy is to work for yourself. Sure, if you remain in a salaried job and tightly control your expenses, eventually you might be able to save a million dollars or so. But if you want to really change your financial position for the better, you need to become a successful entrepreneur.
About the Author-K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System is designed to help entrepreneurs start a business based on their own idea. It includes step-by-step business startup instructions, key software, business tools, and more -- a complete business kit. Visit LaunchX.com to learn more about this revolutionary way to become an entrepreneur.
