| There are so many things involved with building | | | | for most families and will be for many, many years. |
| wealth that it would take much more than one article | | | | However, even these types of debts should be kept |
| to explain it all. So, we've put together a simple | | | | well within your income limitations. If you can only |
| five-step guide to help you get a great start in | | | | afford a $250/month car loan, then shop around until |
| building wealth for a lifetime. | | | | you find one at this price. Don't give in to the |
| Step 1: Set Specific Goals | | | | temptations and pressures to buy the fancier, more |
| Goal setting is a task that can be easily put off - | | | | expensive car with a $450/month payment. It's not |
| especially when you are extremely busy in | | | | worth the risk! |
| day-to-day activities. However, goal setting is the | | | | You may ask, "I thought these steps were for |
| first and one of the most important steps you'll take | | | | building wealth?" |
| to achieve wealth. Set both short-term and long-term | | | | As it happens, debt is the opposite of wealth. The |
| goals. Short-term goals may be daily, weekly and | | | | more debt you have, the less wealth you will |
| monthly goals. These should reveal where you would | | | | accumulate. You can't save money or invest money |
| like to be financially by a certain time in the near | | | | that belongs to someone else. If you earn $3,000 in |
| future. | | | | income this month, but owe $2,000 in loans (before |
| Long-term goals include the amount of wealth you | | | | everyday living expenses), you can't possibly have |
| would like to accumulate within a year, two years, or | | | | extra money to save. You must either earn more or |
| maybe even five or ten years. Both types of goals | | | | sell some items to pay off your debt. You should |
| are necessary to build wealth. Without goals, you are | | | | avoid this "debt trap" if you intend on building wealth |
| wondering blindly with no care or thought of what's | | | | for the future. |
| ahead. This pattern of life is sure to leave you | | | | Another type of debt is one for your business. You |
| empty-handed! | | | | may take out a small business loan to get things |
| Step 2: Create a Business Plan | | | | started or to promote your business. If you are |
| Every successful business from the past and today | | | | uncertain about whether the business will bring |
| started with a plan. Your business plan should illustrate | | | | profits, try to avoid business debt until you have |
| where you are now, where you plan to be in the | | | | tested it a while. |
| future, and how you're going to get there. Write | | | | Step 4: Develop a Personal Plan |
| these few notes down on paper. Then, fill in the | | | | Above, you developed a business plan. Now it's time |
| blanks to create a rough business plan. It's easier than | | | | to create a personal plan. What tasks will you do |
| you think. | | | | daily to build wealth? Put yourself on a schedule and |
| *Your current income | | | | a strict budget. Work toward your goals daily by |
| *Business profits and expenses (if you already own a | | | | making a list of things to do and marking off each |
| business) | | | | item on the list as you complete the tasks. In your |
| *Business budget (or personal budget if working for | | | | budgeting, include a set amount of money you will |
| someone else) | | | | put away in savings (savings account, IRA, stocks, |
| *Capital needed upfront to promote and operate | | | | bonds, etc.) If you plan to invest, be sure to |
| business | | | | diversify your investments. Choose only one or two |
| *Plans to acquire the capital needed (source of | | | | high-risk investments and several "safer" investments |
| capital) | | | | such as mutual funds or bonds. |
| *Spending plan (promotions, supplies, inventory, online | | | | Step 5: Stay focused on the Goal, not the |
| expenses, etc.) | | | | Circumstances |
| *Expectations (What results do you expect from | | | | No matter what circumstances you find yourself in, |
| your initial efforts?) | | | | keep your eyes on the wealth-building goal ahead. |
| Creating a business plan is a necessary step to build | | | | Even if sales are down in your business, don't stop |
| wealth through your own business. Even if you don't | | | | dead in your tracks. Remember, businesses have ups |
| own a business, you should write down a similar plan | | | | and downs. If you remain steadfast toward your goal |
| to reach your personal wealth goals. | | | | during the slow times, the busy times are bound to |
| Step 3: Avoid Harmful Debt | | | | be much better than ever. Your income will grow and |
| Debt is the one of the key reasons many people | | | | you will have the extra money needed to reach your |
| never accumulate wealth. But remember, there are | | | | wealth-building goals. |
| two types of debt: harmful debt and necessary debt. | | | | In a nutshell, building wealth does not happen over |
| Harmful debt is the debt you create for things you | | | | night with one get-rich-quick program. It happens with |
| do not need such as excessive shopping, luxury | | | | consistent labor toward the goals and tasks you |
| items, expensive cars that you can't afford, etc. | | | | have created. You can build wealth for your future if |
| Necessary debt is a debt most people must have to | | | | you do not waver from these basic truths that have |
| live, such as a mortgage, car loan (affordable), | | | | worked for millions of others! |
| medical, college, etc. These debts are a part of life | | | | |