Wealth Building World

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• Always pay yourself first by saving and investing at least 10% of your income for yourself and your family. You should always save the maximum amount possible but 10% of earnings is the recommended minimum savings rate.

• Own your primary residence and continue paying down your mortgage. Do not use the equity in your home as a cash machine for making consumer purchases which depreciate in value over time.

• Live within your means by utilizing a budget and effectively managing your debt. Use your take home pay (minus 10% saved) and then subtract your expenses. Simple grade school math will tell you how much disposable and discretionary income you have each month. And if you can save more, do it!

• Keep the credit cards to a minimum (that is both the number of cards along with their balances) and keep an eye on your all important credit score to insure that you can obtain credit when you need it.

• Invest the maximum allowed in a retirement account, be it a 401(k) or IRA. Always remember, social security aside, there is no such thing as financial aid for retirement. Save the most you can in your tax-advantaged accounts and make full use of any retirement accounts having employer sponsored matching funds applied to them.

• Select investment options which are reflective of your age and level for risk tolerance. The younger you are the more fully invested in stocks you may be and as you advance into each subsequent decade in age, begin to divert a growing portion of your portfolio into bonds to help manage your total portfolio risk.

• Review your investment performance periodically and apply the principles of an asset allocation plan to re-balance your portfolio. Re-balancing your portfolio involves matching your portfolio’s allocation of assets to meet your stated investment objectives after your portfolio has either experienced significant growth or contraction.

• Develop a plan for financing your children’s education and make effective use of financial aid when needed. You can never begin this process too soon, even when they are only infants.

• Don’t neglect good estate planning. This will insure that your assets are distributed as you wish after you are gone and can help manage the tax burden on your estate. You must also have a will prepared and if you have children clearly express who you wish to be both their financial and personal guardians.

Pay attention to your insurance needs to both manage and hedge against life’s risks. Consider auto insurance, hazard (aka homeowner’s), life and medical all necessary components in safeguarding your financial health and preserving your wealth.

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"Top tip for saving: get a low interest high interest saving accounts or sign up for an online money management site such as Kublax.com"