Thursday, January 26, 2017

Upward Momentum: The Most Powerful Thing In Finance

finance power
There is one thing that everyone needs to get into their heads as soon as they start thinking about their finance. There is no time that it’s too early to start contributing to your real financial growth. Even if you’re only able to put aside a dollar at a time, you should be doing so. The sooner you start getting into the habit of putting money into your financial future, the more momentum and progress you start to see. So, here’s what you should start to grow.

Building those defenses

It’s a good idea to focus first and foremost on affording your money a little more protection than it has right at this moment. One of the most common ways to do that is by building a proper budget and establishing an emergency fund to provide for yourself in the event that you lose your income, for instance. You might also want to consider expanding your current insurance agreement to cover the ways in which you might lose that income, to begin with.

Making your money make money

It’s never too early to start ensuring that you are prepared for the future, as well. Making your money make money doesn’t necessarily mean putting everything into stocks. However, you should consider looking beyond just your 401(k) as far as your retirement goes. Instead, think about look at weighted investment portfolios that point you in the direction of safer, more fixed income methods. Even if you want safer, slower growth, it’s usually a better idea to invest rather than to save. Many people find that their savings might not even outpace inflation by the time they want to take them out.

Finding new roads to travel down

If you really want to grow your finances, then you need to start growing your knowledge on different methods of investment as well. As well as stocks and bonds, you should be looking at diversifying your portfolio as much as possible through methods like self-directed IRAs. That way, not only are you able to spot a broader range of opportunities for the better one. But you’re also creating a diversity in your portfolio. That means that if something happens to cause losses in some of your investments, you can rest assured it won’t affect the other investments, too.

Credit matters, too

You never know when you might need more cash. Whether it’s to deal with more of an emergency than your emergency fund can handle or if you want to get on an investment but don’t have the cash ready. That’s why your credit is so important, yet a third of adults will go on without having ever checked their credit. Make sure there’s nothing that could get in the way of you acquiring those loans when you need them the most.

The quicker you get these habits in your head, the smarter you’re going to get with your money. Keep procrastinating and you will go for years in the exact same financial position you’re in.

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