Often in our income earning years, we focus only on our immediate needs and wants. However, this is a very shortsighted view, one that could hurt you down the road.
When you are in your prime working years, you will be accumulating the most wealth. In order to ensure you meet your long-range goals and plan appropriately for retirement, you must focus on the future. The time during your working years is the best time to invest for the future. You have the most opportunity to earn money and you have the advantage of time to let it build.
One of the first agenda items for accumulating wealth for the future, is to ensure you aren’t building debt now. Reducing your debt, which is only borrowed from the future, allows you more money to invest now. Financing items increase their cost due to the interest, as well as cutting back on your available cash to invest now. Lastly, you are obligating future income to pay the debt back. If you are getting closer to retirement, that future income will most likely drop. Getting your spending on track and reducing debt is one of the first steps to getting your future in line.
The next is to get your retirement accounts in order with a regular investing plan. Funding your retirement is one of the best investments as there are many additional benefits like tax breaks and matching funds.
Another step is to build up an emergency savings. This will help prevent you from having to go into debt during an unplanned financial event. Not having the proper financial protection is often what leads to huge debt problems, bankruptcies and foreclosures.
Lastly, you can also set aside money for other goals, like financing your children’s education. While these are often good goals, they should still follow after all the other ones have been secured.
Related Articles:
*Investment Strategies in a Volatile Economy
*Should you Borrow Money to Invest?