1. Keep Perspective
Your investments and savings are ultimately a means to an end. The value
of your portfolio rests in the enjoyment and security it provides for
your family. This is often the reason normally rational individuals
behave irrationally when it comes to their stock holdings; they secretly
view each up and down tick as feast or famine.
2. Get off the Consumption Treadmill
You will never experience financial freedom until you have stepped off
the consumption treadmill. Once you slip into the habit of borrowing
tomorrow’s income to pay for today’s expenditures, you will begin to
loathe money and possibly even your job or occupation. Instead of
viewing it as an outlet for your talents, gifts and ambitions, it
becomes a series of endless tasks you must complete if you hope to break
even at the end of each month.
3. Setup Auto-Withdrawals from Your Checking or Savings Account
Many brokerage firms allow you to set up regular deposits by
electronically transferring money from your checking or savings account
each week, month or quarter. This is a very effective way to begin
saving because you don’t actually see or miss the cash. On the same
note, if your employer offers an automatic withdrawal option for your
retirement account, you may want to consider joining.
4. Educate Your Mind
There are hundreds of excellent finance, investing, economics, accounting, business and management
books
in the world. A few hours of well-directed reading each week can have a
fattening effect on your pocketbook as well as give you something to
talk about at your next cocktail party.
5. Reward Yourself
Clipping coupons and reducing household expenditures does not mean you
have to live the life of a miser. Set financial goals and reward
yourself when you reach those goals. Positive economic incentives can do
marvels for productivity, and you may not find it nearly as difficult
forgoing current consumption if you know a new pair of Allen Edmonds is
in your future. Besides, when you associate a luxury good with an
accomplishment, it has much more meaning and value.
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