AIA Chiangmai

Is the start early; save as much as you can; get a good return on your money working for you? Savings rates are at an all time low and personal debt levels are staggering. What’s the solution? Work longer? Reduce your lifestyle expectations? The answer is really quite simple, yet seems to be somewhat of a mystery!! Let me tell you, it’s not a se*cret!! The answer is in looking at the situation for an income perspective, not the traditional asset accumulation model we have all adopted.

If you have expectations to receive a household income equivalent to say, $60,000 per year for 30 years, at retirement that would require you to have savings of $922,347. In order to accumulate this sum you would need savings of almost $14,000 per year for 30 years. These figures are based on conservative estimates of 5% earnings on your money, because whether inflation is low or not and whether the money is saved inside a tax sheltered investment or not, taxes and inflation is a factor that will affect your total return. You can use larger returns to make your estimate if you like, it’s your choice - but so is everything about how you live your life and plan your finances.

You can also decide to accept any income figure you like. If you seriously consider the $60,000 household income - does is it really give you the money you want to do the things you like to do? That’s for you to decide. On an after tax basis $60,000 is approximately $3,000 per month. Consider this when you make your projections: What are the costs of your activities? How much is clothes, food, entertainment, gifts, insurance, household maintenance? Everyone lives their lives completely different. How are you to know what income you want when you leave the workforce unless you do some research for yourself and find out just how much it’s going to cost. This means starting today to keep track of your current expenses.

This is the secret to being able to retire: you absolutely must know how much INCOME you want coming in to support your lifestyle. If you don’t know what you want to do, then I suggest you do some research to find out what you might like to do. And, while you’re doing your research, still keep track of what you’re spending today regardless of whether it’s what you think you’ll be doing when you leave work - it’s a necessary starting point in preparing a full financial plan.

If we decided that the $3,000 per month net income was sufficient, then we have two choices: 1) save enough money to fund it. This savings might be entirely on your own, or perhaps will include company and government pension money as well, or; 2) develop income streams today that will provide you with the $3,000.

Ask yourself this question: which is an easier number to grasp? $3,000 or $922,347? If the answer is $3,000, then start to plan your financial activities so you are creating income. There are many different ways: business income, real estate, network marketing, royalties, licensing, and income investments, are just some key areas.

Consider, for example, if you purchase a home with a suite in it today that produces $600 per month income. You could use the income when you needed it, use the space when you needed it, then convert it back to income again when you needed it at retirement.

Here’s another example to help you switch your focus from growth to income: If you were to make a $10,000 investment and expected to receive 5% on that money, we normally look at the amount that investment will grow to. In this case, if the investment was left for ten years at that return it would grow to $16,289. Great - but that growth money can now produce income of $2,109 or $173 per month for ten years. You can easily structure your investments with an advisor to plan for income rather than simply long-term growth.

Everyone has income generating ideas, they just get so focused on earning a living for today they forget about the future. There are many terrific resources to help you take your ideas and turn them into income. You simply have to first recognize that you are looking for income ideas - not get rich quick schemes - but solid, income generating ideas that you can work into your financial plan. Then when you find them, you can implement them whenever and however you like - so retiring (or more appropriately, being financially independent) can be yours whenever you want and at whatever level of income you want - your choice!!

MoneyMinding Inc. and Tracy Piercy accept no liability for the content of this article, or for the results of any actions taken or not taken, on the basis of the information provided. The content is intended for informational purposes only and is not a substitute for professional, personal financial advice.

Tracy Piercy, a Certified Financial Planner, offers step by step proven success principles, tools, ideas and strategies integrated with practical financial planning strategies. She has worked in the financial industry, in insurance, banking, and as a well respected investment advisor with CIBC Wood Gundy, for more than 15 years. Tracy is the author of Enlightened Wealth, a personal money journal http://www.moneyminding.com.

Tags: financial independence, Financial planning, money minding, retirement, retirement plan, tracy piercyfinancial independence, Financial planning, money minding, retirement, retirement plan, tracy piercy

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Your most important responsibility as an adult is to achieve financial independence for yourself and for your family. Aside from the practical tangible benefits of having all the money you need, there are even more important reasons for obtaining financial freedom.

To achieve financial freedom you have to be in control of your life and you cannot be in control of your life if you’re constantly worrying about not having enough money to pay your bills. Constantly worrying about not having enough money will rob you of any feeling of being in control of your life more than anything else.

The feeling of security is one of the most important and basic human needs. Every person wants and needs to free from feelings of poverty, being destitute, and the feeling failure that is associated with it. The lack of security causes more unhappiness and more underachievement than any other single factor.

Financial freedom is only possible when you accept complete responsibility for your financial condition. You must refuse to make justifications, excuses, or rationalizations for the financial situation you are currently in. You have to accept full responsibility for your current situation before any meaningful financial change can take place.

Financial independence begins with a specific goal and a plan to achieve it. You must decide exactly how much money you want to make in the next 12 months, the next 5 years, and in the next 10 years. Then, you must make a detailed plan of action as to how you’re going to reach the financial goals you’ve set.

For example, are you going to reach your financial goals and financial independence through entrepreneurship, investing in the stock market, or investing in income producing real estate? Set your goals, make your plan, and then work your plan.

You also have to be able to delay or withhold gratification. You have to learn to withhold unnecessary spending in the short term so that you can enjoy the rewards of financial independence in the long term. This begins with small efforts of savings and sacrifice with the knowledge and belief that these efforts will eventually lead to continuous, monthly cash flow that will enable you to eventually become financially free.

We’ve all heard the saying, “It takes money to make money.” This is true because when you save money it activates the Law of Attraction. So when you begin to save money it creates energy that begins to attract more money to you. As long as your attitude towards money is positive, you’ll find yourself acquiring more and more of it.

As you increase your savings and invest your positive emotions in them, you’ll find more and more money attracted to you from a variety of different sources. The key thing to remember when you save money is that the more money you save the stronger the force of attraction will be and more money will come to you.

Your starting point for a savings program should be to make a habit of paying yourself before you pay anything else each month. With each paycheck you receive you should put 10% of you net income into a savings program. For example, if your net income after taxes is $2,000 per month, you should be saving $200 every month.

You might be asking, “What if I’m already in debt and don’t have enough money as it is to last out the month?” If this is the case, then you have to start out by saving what ever you can. With a little effort, you can easily save 1 or even 2 percent of your net income and then live on the other 98 or 99 percent. As you become more comfortable living on this amount each month you’ll find that you will be able to increase your saving to 3 or 4 percent, and then later up to 5 or 6 percent and finally up to 10 percent.

The next step in your plan towards financial freedom is to save enough money so that you have a supply of quick access money for emergencies. You should have an amount that will protect you from the ups and downs of the dynamic economy of the 21st century. Your goal should be to have at least three to six months living expenses in savings for you and your family should anything happen to cut off your income.

Having this type of financial cushion will free you from worrying about money. It will enable you to work at a job that you choose or leave a job that that you don’t like. You’ll be able to choose the kind of work you want and work with the kind of people you want to work with.

The next step towards financial freedom is insurance, as you save you must be insured in order to feel secure about our financial status. You need life insurance but only if you have a spouse or a family to provide for.

If you have a wife or a family you should buy term insurance. Term insurance is much cheaper than whole life insurance. Term insurance builds up no cash dividends. Whatever amount you buy, it will pay out the face amount to your estate or to your family when you die.

Your term insurance policy should be for an amount that enables your family to live at their current level from the proceeds from your policy should you die unexpectedly. For example, if your current income is $50,000 per year, you should have a term life insurance policy with a face amount of $500,000.

You should also have insurance coverage for your vehicles and other personal property. In addition, you need to have health insurance and disability insurance is a very wise investment as well. No matter what success you achieve, a catastrophic illness or natural disaster can quickly erase an uninsured fortune. Once you have built up your wealth and have an estate to protect you should also look at purchasing whole life insurance.

For both men and women whether they’re single or married the achievement of financial independence is the most important issue that determines whether or not they become all that they’re capable of becoming. Once you develop the right mindset and begin to save 10% or your net income every month you will have taken an important step towards achieving financial freedom and never having to worry about money again.

Copyright©2006 by Joe Love and JLM & Associates, Inc. All rights reserved worldwide.

Joe Love draws on his 25 years of experience helping both individuals and companies build their businesses, increase profits, and achieve total success. He is the founder and CEO of JLM & Associates, a consulting and training organization, specializing in personal and business development. Through his seminars and lectures, Joe Love addresses thousands of men and women each year, including the executives and staffs of many businesses around the world, on the subjects of leadership, achievement, goals, strategic business planning, and marketing.

Reach Joe at: joe@jlmandassociates.com

Read more articles and newsletters at: http://www.jlmandassociates.com

Tags: achievement, financial freedom, financial independence, personal succes, self improvement, successachievement, financial freedom, financial independence, personal succes, self improvement, success

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