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In this article we will discuss long term financial goals and what true wealth means. We will also lay out a detailed plan for what it takes to reach your financial goals, as well as how to become wealthy, including saving, budgeting and investing.
Types of Long-Term Financial Goals
Most people have a different idea of what their long-term financial goals are. For example, one person might simply want to have extra money each month to use toward a vacation. Whereas, another person might make the financial goal to retire at the age of 45.
Long Term Financial Goals:
- Early retirement
- Pay off a home or car
- Save enough money for a vacation
- Start a business
- Save enough money to pay for college
- Pay off student loans early
- Buy a vacation home
- Build a retirement investment account to $1 Million
- Early retirement
- Pay off a home or car
- Save enough money for a vacation
- Start a business
- Save enough money to pay for college
- Pay off student loans early
- Buy a vacation home
- Build a retirement investment account to $1 Million
How Experts Achieve Long Term Financial Goals
The long-term financial goals above provide a basic framework for goals that you may wish to achieve. For example, perhaps you desire to retire early. However, making a vague statement about your wish is not enough.
To fully realize your long-term financial goals, you need to be specific. A more specific goal related to retiring early might be:
Goal: “I will earn $100,000/year and invest $50,000 each year in technology ETFs, gold and cryptocurrency until my investments equal $1 Million, then retire to Argentina.”
Second, in order to achieve your long-term financial goals, you must be deliberate in your actions. If you want to retire at 45 and move to Spain, then included this as part of your written goals.
Begin by creating a journal, a spreadsheet or plan where you list exactly what you have planned for the future. This serves two purposes. First, writing down your goals makes what you want explicitly clear.
It gives you a starting point and also provides you with the details that you will need to determine how you will reach your goals.
Second, the purpose of planning out your financial goals on paper (or electronically) is that you are signaling to yourself and others what you want. History has proven that the psychology of desire and intention is a powerful tool in accomplishing goals.
Many wealthy investors credit their personal wealth and success to the philosophy outlined in the book, “Think and Grow Rich” by Napoleon Hill ( https://read.amazon.com/kp/embed?asin=B07P896HSJ&preview=newtab&linkCode=kpe&ref_=cm_sw_r_kb_dp_.KYEFbXPBNSXD&tag=piggybankcoin-20).
Third, to achieve the long-term financial goals, you must be disciplined. Once you have established your long-term financial goals and you have written down what your goals are, you will implement your financial plan.
For example, perhaps you begin investing a particular amount of money each month in specific investments. Many successful investors will tell you that consistency and discipline helped them to reach their financial status.
Remember, there is no get rich quick method or free lunch.
Long Term Financial Goals: How Millionaires Do It
When people think of what a millionaire is, they imagine people like Leonardo DiCaprio (movie star), Elon Musk (inventor and investor) or Donald Trump (real estate tycoon). However, most wealthy people live a simple, quiet life.
The road to riches is not always glamorous or exciting; In fact, becoming wealthy requires sacrifice and discipline.
There are over 18 million people in the United States who have a net worth of one million dollars. In fact, some of those wealthy individuals probably live in your neighborhood. Perhaps they even live next door or work with you.
Learning about true wealth will put you on the right track to building true wealth long term.
Furthermore, there is a popular belief that the wealthy attain their money the easy way: inheritance, winning the lottery or through criminal activity. The truth is that the majority of millionaires discovered the secret of the true wealth building cornerstones.
In “The Millionaire Next Door ( https://www.amazon.com/gp/product/1589795474/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=1589795474&linkCode=as2&tag=piggybankcoin-20&linkId=694039336ae421113f59bfae4a777f7c)”, by Dr. Thomas Stanley and Dr. William Danko, it is revealed that most millionaires surveyed were self-made. These men and women started from scratch, with little to no money, and worked hard at saving and investing.
In 2019, there were 675,000 new millionaires in the United States, which makes up more than half of new millionaires around the world.
Overall, there are 47 million people with a net worth of more than one million dollars. – Credit Suisse Global Wealth Report, 2019 ( https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html)
Investment Types
There are a number of different types of investments that are available for investors to choose from. Moreover, technology of the 21st century has made it easier than ever to choose many different investment options.
For example, strategic wealth management investments can include things like stocks, bonds and real estate. In addition, there are many new investment opportunities like cryptocurrency and micro investing.
Types of Investments:
- Stocks
- Bonds
- Mutual Funds
- Retirement
- Real Estate Trusts (REITs)
- Real Estate (Land/Homes)
- Annuities
- Precious Metals (Gold, Silver, etc.)
- Cryptocurrency (Bitcoin)
- Insurance
- Stocks
- Bonds
- Mutual Funds
- Retirement
- Real Estate Trusts (REITs)
- Real Estate (Land/Homes)
- Annuities
- Precious Metals (Gold, Silver, etc.)
- Cryptocurrency (Bitcoin)
- Insurance
Investing 101
Take Control of Personal Finances and Dollar-Cost Averaging
Learning about investing doesn’t have to be complicated. Once you establish your goals and how much money that you want to invest each month, you can then determine what kind of investments you wish to make.
However, every adult should learn to budget, save money and pay off debt first. If you have a family, it is critical that you begin planning your financial future.
Many investors use “dollar-cost averaging” as a part of their investment strategy. Dollar-cost averaging is simply dividing up the amount of money you have to invest over a longer time frame.
This investment methodology means that you invest the same amount of money each week or month, no matter if the market goes higher or lower. Dollar-cost averaging takes the emotion out of buying stocks.
The Surprising Facts About Saving Money
Too Much Debt Can Prevent You from Becoming a True wealth Builder
““…there’s a growing percentage of people with little to no savings.
In 2019, 69% of respondents said they have less than $1,000 in a savings account compared with 58% in 2018.” -Survey: 69% of Americans Have Less Than $1,000 in Savings – December 16, 2019, GoBankingRates ( https://www.gobankingrates.com/saving-money/savings-advice/americans-have-less-than-1000-in-savings/)” –
In fact, most people don’t have any savings. Yet, saving money is a critical part of becoming a true wealth builder. This is a shocking statistic that shows how access to credit cards and lending have dominated our society.
Unfortunately, Americans have adopted the idea that borrowing money for most things is normal. Yet, just a few generations ago in the early 20th century, people learned the hard way during the Great Depression that borrowing can lead to financial ruin.
Having no savings puts you in a dangerous financial place.
But, saving money is a critical part of how to become a true wealth builder for several reasons. First, learning to save money requires that you learn not to spend your money.
Warren Buffet famously said that the most important rule of investing is “to not lose money.” The lesson is don’t spend all your money. Instead, save some money. Saving money is an excellent habit to learn and maintain.
Second, saving money will give you the confidence to seize opportunities when they arise. When people live paycheck-to-paycheck, they waste their time struggling with bills, instead of focusing on future wealth creation.
In addition, as your income becomes more limited in old age, you will depend on cash savings to pay for things like medical care and expenses.
Create the Habit of Saving Money
Saving is a habit that can be learned over time and simply requires discipline. Become determined to reach your financial goal. Your personal determination to learn how to become a true wealth builder will help you develop the discipline to save.
Any long term financial goals should include saving.
In addition, develop good habits of saving money. In the classic personal finance book, “The Richest Man in Babylon ( https://read.amazon.com/kp/embed?asin=B07J3P4WJJ&preview=newtab&linkCode=kpe&ref_=cm_sw_r_kb_dp_MoftFbH2YPMD4&tag=piggybankcoin-20)” by George Clason, the author implores the reader to set aside at least 10% of your earnings.
This is a great rule of thumb for saving and investing because removing only a fraction of your income each month will likely not even be noticed or missed. Yet, this small amount of money is the seed needed to grow true wealth.
Save Money Each Paycheck
10-15% of Your Income Should Be Invested
You don’t have to be a business owner or entrepreneur to be a millionaire true wealth builder. There are many millionaires who live simple lives. They work 9-5 jobs every day, just like you.
You don’t have to be a business owner or entrepreneur to be a millionaire true wealth builder. There are many millionaires who live simple lives. They work 9-5 jobs every day, just like you.
One of the keys to their success is having a consistent source of income. Every month, or each paycheck, they divert 10-15% of their earnings to investment(s). An example would be investing in a 401(k), Investment Retirement Account (IRA) or Real Estate.
Year after year, your money will grow and work for you to create true wealth.
Make saving 10-15% of each paycheck easy by setting up an automatic money transfer to your savings account. For example, each time your paycheck is deposited into the checking account, have an automatic transfer set up that moves money into the savings account.
Some people find it helpful to have a savings account that is in a different bank. This reduces the temptation to spend savings. As a result, it is critical to your long term financial goals that you save money.
Avoid Credit Cards and Debt
Credit Cards Prevent You from Saving Money
One dangerous lesson to learn is overspending on credit cards. In the modern era, gaining access to credit is far too easy. The big risk that comes with credit is overspending.
When you spend more money than is allowed on the credit card, or spend more than can be paid back, it can be a painful lesson in finance. But sometimes difficult lessons can be valuable and last a lifetime.
If you make a mistake with a credit card, or overdraft an account, it can become a learning tool. Use the situation as an opportunity to learn from the mistake and implement better budgeting habits.
Everyone learns the lesson of debt and compounding interest when we have to pay back what was borrowed, plus interest.
Pay Off All Debt
Most millionaires did not get rich by borrowing money. In fact, most people with a significant net worth avoid debt. They know that when you have debt, money is working against you. So, it’s important to pay down all your debt prior to taking the next steps.
Later, you can make your money work for you, not against.
Live Below Your Means
Reduce Bad Habits like Meals Out, New Cars and Unnecessary Items
Forming good financial habits is critical for learning how to become a true wealth builder. In many cases, frugal living is the cornerstone of financial success. This simply means spending less than you make.
A simple monthly budget can assist you in determining whether you are meeting your goal. And these good habits can carry forward for a lifetime.
Financially successful people don’t ascribe to normal behaviors. People with the true wealth builder mindset only purchase what is needed. They don’t buy new cars or fancy things. As a result, the extra money saved from this frugal behavior is put to work in investments.
Develop a Budget
Budgeting Creates Consistency, Promotes Money Tracking and Teaches Budget Balancing
Your budget is your map to how to become a true wealth builder. When you create a budget, start by writing down in detail what your expenses are each month. Use paper, spreadsheets or whatever works. Provide as much detail as possible when listing your expenses.
You may find it helpful to review past bank statements and receipts.
Having a balanced budget means spending less of your paycheck. Preferably, you will have a significant amount of money left over to pay off debt and save for investing. In short, everyone should budget, whether you are a large corporation or just one person.
There are many budget options online, including spreadsheets, mobile apps and even printable budgets. Check out our “Best Budget Planner ( https://piggybankcoins.com/best-budget-planner/)” article for more detailed information and recommendations on how to make a budget.
Begin Investing Early On
Start developing the habits of how to become a true wealth builder early. Many millionaires credit their success not to windfall earnings, but to incremental investing over long periods. Compounding interest is a powerful tool that can work for you in growing your wealth.
Grow Your Income
Maximize Your Income by Starting a Business or a Side Hustle
There are many ways that you can improve your income. For example, start a small business out of your home. Explore what you like to do in your spare time and determine if you can make money doing it. For example, photography can be a hobby or a business.
Great Ways to Earn Extra Money Include Seasonal Work, Side Hustles and Starting a Business
A secret that successful people don’t share about their success is the level of commitment required to become successful. Successful people often work 2-3 jobs, work long hours and work to do things that no one else wanted to do.
It’s not glamorous to deliver pizzas or wash cars for extra cash. But sometimes to get ahead you have to swallow your pride and do what must be done.
Work a Side Hustle
Having a side hustle has become more common these days. Unfortunately, many people work a second job simply to make ends meet. But there’s no shame in working hard to get ahead. Common side hustles today include:
Having a side hustle has become more common these days. Unfortunately, many people work a second job simply to make ends meet. But there’s no shame in working hard to get ahead. Common side hustles today include:
- Uber/Lyft Driver
- Dog Walking and Sitting
- Babysitting
- House Cleaning
- Freelance Work Online
- Tutoring
- Wash and Detail Cars
- Dog Walking and Sitting
- Babysitting
- House Cleaning
- Freelance Work Online
- Tutoring
- Wash and Detail Cars
Build a Business
There are Great Opportunities for Starting a Business, Including Service Industry Business, Home Based Business and Home Sales Business
There are Great Opportunities for Starting a Business, Including Service Industry Business, Home Based Business and Home Sales Business
There has never been a better time to start a business. The opportunities are endless for someone willing to put in the work. You can start a business locally in the service industry, such as delivery, massage, home/car repair, pet sitting/walking, babysitting, etc.
None of these businesses require an office or a startup cost.
If you don’t want to start local service business, you can work from your computer at home. Sell things online on Amazon, eBay, Etsy, Facebook Marketplace or another platform. You can buy and sell new or used items. Make your own brand.
There are many options for selling goods online.
Also, you can sell services online. Are you good at building websites, social media or marketing? Many businesses now have an online presence and they need marketers and SEO consultants to help them reach customers.
Also, you can sell services online. Are you good at building websites, social media or marketing? Many businesses now have an online presence and they need marketers and SEO consultants to help them reach customers.
Wrap Up for Long Term Financial Goals
Operate a Business, Network and Work with a Financial Team
First, many millionaires reach their goal quicker by operating a small business. Owning a small business allows you to control how the company operates and take more profit for the extra labor you put in.
First, many millionaires reach their goal quicker by operating a small business. Owning a small business allows you to control how the company operates and take more profit for the extra labor you put in.
Second, maximize the networking that you do with others. Participate in conferences or just promote contact with like-minded people in your area. The network effect can have positive financial benefits for you. Don’t isolate yourself.
Finally, surround yourself with a financial team. Seek out a respected tax professional, attorney, business coach, etc. Sometimes an ounce of prevention is worth a pound of cure. Staying in good legal standing with state and federal regulations can help you grow.
In addition, these professionals can save you money in the long term.
Implement Your Long-Term Financial Goals
Learning what has worked financially for other successful investors is the easiest and most secure strategy for success with money. Moreover, successful people get up early each morning and focus on their long-term financial goals.
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