After you gain better control over your spending and borrowing, you will save and invest for the future, creating wealth. With wealth accumulation, you will face new challenges and without proper planning, it will be difficult to progress as fast as previous. You will experience stagnant and your wealth will be in a state of limbo. Imagine you have a “wealth” treasure chest and inside contains various items such as Disability Insurance, Life Plans, Wills, Gold, Hospitalization Plans, Real Estate, Trusts, Fixed Deposits, Bonds, Mutual Funds, Blue Chip Stocks, Utilities Stocks and Bank Savings. You do not have time to organize your important financial documents and review them, that’s why they seem all over the place in your treasure chest.
Organize your financial system
With a financial system in place, you will see the big financial outlook, you can plan better on how to create new and additional income. Organization helps us to streamline decision making on complex emotional issues with regards to money. It helps us to reduce debt, make better financial decisions, maximize every dollar and create a long term financial plan. Disorganized financial status will create poverty.
I do not believe in having a higher income is part of the financial system, wealth is all about the money you save at the end of the month. Although higher salary helps generate greater opportunity to accumulate wealth and have a higher propensity to cover financial mistakes, it does not ensure one will become wealthy. The financial system is about what you have, put them in order and optimize their growth. Organizing how you spend and save money is the crux to create and retaining wealth.
Another reason why people do not sort out their financial system is they do not know how. It is important to know where to start. Create a physical or electronic filing system for the following categories:
- Income Tax
- Property Tax
Once you complete the filing, you can further improve the system based on following criteria.
- Organizing an investment based on its risk.
- Organizing based on liquidity of the asset.
- Organized based on when you can sell the asset.
- Organized based on value.
You will want to create a system which makes it easier for you to visualize your assets and what you can keep for your retirement. Therefore, graphical means or charts will help to see the entire financial picture. It helps with calculation and project your accumulation of wealth. It helps you to understand tax implication to your savings.
- Review financial documents. Seek professional help if you are unsure of certain areas.
- Review your savings and investments.
- Organize your savings accounts, insurance policies and real estates.
- Project your wealth and list them based on your own financial goals.
Been organized, you can look at the all the financial elements and compare the results. Remember decisions you make today will affect your future. Therefore, remember to conduct annual reviews of your financial systems to make sure everything is in order. Set aside a particular time with your other half to do this review. You may require your financial planner to be involved in this process.
By getting organized, you will see financial rewards you won’t possibly imagine. This will give your loved ones a piece of mind and they will be grateful for planning for their future. Decide today to put your financial system in order!