I grew up in a middleclass family. My dad worked as a teacher and my mom worked as a secretary for General Motors in Tallahassee, Florida. Before moving to Tallahassee, we owned a 520-acre farm. I was lucky to grow up with the freedom to run around and explore miles of open pastures with cows, pigs, and horses.
The farm gave me inspiration to achieve tasks that challenged my age. I was only eight when I first started driving a tractor and eleven when driving the truck. The farm was a great way of life which taught me that hard work and consistent routines created success when doing my chores.
Those same principles today have help me be successful. After moving from the farm, located in Quincy, Florida to a city in the Panhandle, I began to get excited about money. At thirteen I started a paper route, at fifteen I was a dish washer for anup-scaled restaurant, and at sixteen I worked a summer job as an apprentice for an electrical company.
I saved most of my money and bought a car. I continued to work through high school and college but for some reason I did not put any money aside to save for the future. I thought that once I received a degree from college, I would find a high paying job, and then I would start investing into my future to become a millionaire.
I can tell you; this did not happen. At thirty I was broke renting and just getting by, paying my bills. The only smart thing I did was get a college education.
If I only knew then, what I know today.
If I were only smart enough to invest in my early years, just think how it could have changed my life when it came to acquiring wealth.
Well, this did not happen.
My advice to the readers is to invest as soon as you can. Which means create a plan how to reduce or pay off your debit and start immediately saving for the future. Where I failed, was refusing to save at a young age. Not seeking out a mentor and not reading books on wealth creation. I also did not have a plan. I did not have any goals and did not write down a plan or road map on how I was going to achieve my goal, which was to be a millionaire by the time I was thirty.
If I could go back in time, I would have read as many books as possible about wealth creation, developed a plan to achieve small goals to save money and seek advice from a mentor. I did none of these. I thought I was too smart, that I would figure it out when the time comes. I did not even understand the rule of compounding money.
Compounding money is the key principle to growing your wealth.
Compounding is a process in which an asset’s earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. For example, if you had $5,000 with no interest compounding over time you would still have $5,000 over that same time span, if you did not spend any. However, if you had $5,000 with 5% interest over 40 years your money would compound to $35,199. If you invested $100.00 a month with 12% interest you would have $1,188,242 over forty years. Yes, everybody can be a millionaire with just this one simple principle of compounding money.
Compounding interest/yield is easy to understand as an adult but just ask your children if they know what the principle of compounding money is all about. I am sure they will probably have no clue.
You can see how important it is to teach your children how compounding money works. The earlier you start investing and compounding your money the better off you and your children are going to be in the long run. Competition, in the marketplace, is getting fierce and your children need an edge to accomplish their goals.
Even though school is expenses it is important to make sure your kids go to college. Some of the ways to save for college is the states Prepaid College Plans, Cordell Plan, 529 Plan, Roth IRA, or a whole life insurance plan. All plans listed above are tax free, however, the whole life policy, is a loan which you will need to be paid back to the policy holder. You can only borrow 90% of the cash value of the policy.
Having a college education or a good trade job and keeping your job is the first steppingstone in building a basic foundation to growing your wealth.
It is important to teach your kids to start saving early.
It is important to teach your children to break down their income that they have earned by a percentage. It is recommended for them to save at least 70% towards investing, 20% for themselves and it is important to teach your kids to give back. Another 10% should go to church or a charity. Later down the road these percentages will change. Standard rate for saving for retirement is 15 percent. Please keep in mind it is always important to keep some cash around to either purchase other assets or for an emergency if you lose your job. The rule of thumb is to have at least eight months of household expenses save up for a rainy day.
In this article one can find some basic rules of money and how important it is to save and grow your wealth through compounding. We also mentioned how important it is to teach your children about money and what avenues you can take when saving for a college education.
For more information on the rules of money you can go to www.DiverseInvesting.com or purchase The Road Map to Investing on Amazon.
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