Key # 1: Spend Less Than You Earn Each Month

If you get nothing out of this blog but this one simple principle, and you follow it throughout your life, then you will achieve a greater level of FINANCIAL FREEDOM than most of the people in the United States today. A large portion of people in our society are burdened by debt and are not experiencing FINANCIAL FREEDOM because they don’t follow this one simple rule.

How do you spend less than you earn? There are three possible solutions to this problem:

  • earn more
  • spend less
  • earn more and spend less

Key # 2: Avoid Consumer Debt and Student Loans

There are 3 basic types of debt that we will look at here:

  • consumer debt – credit cards, car loans, department store loans, etc.
  • student loans
  • mortgage on your home

I strongly recommend that you avoid all debt if possible. But a mortgage on a modest home or an investment property is an acceptable form of debt. A mortgage on a large, expensive home is not beneficial to you.

While this may sound difficult, it is quite easy. If you follow Key # 1 then Key # 2 becomes a non-issue. If you spend less than you earn then you are not incurring consumer debts.

How can you pay off your current debt and stay out of future debt?

  • earn more
  • spend less
  • earn more and spend less
  • sell assets that you don’t use any more

Key # 3: Invest in Income Producing Assets

Once you have paid off all your debts and are starting to save for investments, you should look at your goals.

  • do you want to have enough investment income that you don’t have to work
  • do you want to invest to prepare for your retirement
  • do you have a specific net worth goal that you would like to achieve

I would recommend that you start your savings program with an IRA invested in some mutual funds. If you start investing the maximum in an IRA each year starting this year, when you retire you will have a nice nest egg to help you in retirement.

The best time to invest was yesterday ! 

The second best time to invest is today!


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