How Much Will You Make? Part One
Even though you may not realize it, you could earn a fortune during your lifetime from earned income alone. For example, if you're 35 and earn $55,000 a year, over the next 30 years you could earn over $3.6 million.
$40,000 $55,000 $70,000
Per Year Per Year Per Year
Age 35 $2,657,554 $3,654,137 $4,650,719
Age 45 $1,332,638 $1,818,627 $2,314,617
Age 55 $ 503,116 $ 692,784 $ 880,452
These numbers tell you the amount of money you will earn if you work to age 65 and earn the stated amount above, assuming a 5% salary increase each year.
So the question is, "What will you do with all the money you will earn in your lifetime"? You really will earn a fortune.
Will you spend extravagantly? Will you be careful with how you spend your fortune? Will you plan for the future, both short term and long term?
Do you have a Family Financial Plan? Most people spend more time in a year planning for their Family Vacation than they do planning their Family Finances.
What is real Financial Planning anyway?
Simply put, Financial Planning is a method of identifying and arranging financial priorities in such a way, that in the event of any emergency, the Family's Financial Resources will be Sufficient to respond to the emergency, without jeopardizing the Family's Financial Future.
An emergency can be one or more of a number of events. A few examples are: A disability, a death, an extended illness, a nursing home stay, automobile repair, major appliance repair or replacement, a family member needing financial help, etc.
Proper planning and organization and living on a planned budget will help you prepare for these financial emergencies.
There are a number of roadblocks that prevent individuals and families from being prepared financially for these emergencies.
The first and most common roadblock to financial success is not having any goals. An estimated 65 million American households will probably not realize one or more of their major life goals.
How are you doing on your financial goals? Do you have them?
Another roadblock is ignorance. Many people of all educational levels lack a basic understanding of how the financial world works and how to make their money grow.
The combination of time and money is powerful. Compound interest can have a dramatic effect on your investments and savings.
The next roadblock is Debt, particularly credit card debt.
Never borrow for the sake of buying unnecessary items. Many people don't realize how much interest they pay, because they pay in small increments over a long period of time.
A $2,000 balance on a credit card at 18% with a minimum payment will take you over 30 years to pay off and close to $5,000 in interest!
Other roadblocks to financial success include Inflation, Taxes and Procrastination. All of these roadblocks need to be addressed in your Family Financial Plan.
The question you need to answer is "What have I done to prepare for financial success, what am I doing now, how often do I review my plan and when will I begin my family's plan?"
The Six Keys to Financial Success are:
1-Risk Management
2-Cash Management
3-Investment Planning
4-Tax Planning
5-Retirement Planning
6-Estate Planning
These areas will be reviewed and discussed in future newsletter articles to assist you in your planning and goals.
Everyone deserves to feel the joy of knowing that financially all will be well in the event of any emergency.
Do yourself and your family a favor today.......set a goal to begin your Family Financial Plan.
Scott L. Overstreet Registered Financial Consultant Visit Scott's Simple Joe Page @ http://www.simplejoe.com/scottoverstreet.htm