4 Wealth Building Pitfalls For Retirement
Is your retirement in jeopardy since the recent economic downturn? You only need to watch the news once to know that things are not looking good for the future. More and more, people are realizing that the financial status quo just is not working the same any more.
Any wealth building strategy must take these four economic factors into account in order to have enough money for the future.
The American Bankruptcy Institute says that in the first half of 2010, the filing rate was 14% higher than it was for the same period last year. And it gets worse — the Institute also says that due to debt, unemployment and the economic downturn, we can expect to see more than 1.6 million bankruptcies by the end of the year.
To make matters worse, the Institute also says in a study it is releasing in its September issue of ABI Journal, that Americans over the age of 55 are declaring bankruptcy more than any other age group. From 2002 to 2007, bankruptcies for this age group have risen 61%.
If that is not bad enough, “Baby Boomers” accounted for 42% of all the filers in 2007. The financial condition of those in or close to retirement was exacerbated by the housing crisis. The housing collapse has left many in this age group with little or even no equity in their homes.
Let’s not forget about what inflation does to your wealth building strategy. For the past 30 years, inflation has averaged at 4.22%. This means that with inflation staying at this rate, something worth ,000 today, will require over ,400 to buy it in 30 years.
With inflation at 4.22%, how will your retirement savings add up? If you have put your money into a savings account, the stock market or a 401(k), none of these are helping you build wealth for your future. In fact, a savings account is the only vehicle that has actually been making money recently — but you still fell behind as inflation exceeded your rate of return.
The bad news about Social Security makes us all worry about our retirement. In 2004, Alan Greenspan said that in the future Social Security benefits would have to be slashed. As he predicted, here in 2010 there is NO cost of living raise. To make matters worse, Social Security is predicted to go bankrupt by 2037, 4 years earlier that previous estimates. Will Social Security be there at all for your retirement?
Learn more about how to protect your financial future by visiting http://www.bestwealthbuildinginfo.com. Watch the video on the “13 Economic Uncertainties That Washington Wishes You Didn’t Know” to learn what you need to know to protect your financial future.
Bettina Romberg writes about economic issues and how they relate to your financial future. Get a free copy of her e-book, “The 13 Economic Uncertainties That Washington Wishes You Didn’t Know,” at her blog: http://www.bestwealthbuildinginfo.com
Seven Wealth Building Strategies You Should Implement
Wealth; we all want it but few of us know how to get it. Wealth building strategies are not just for the rich; they can be used by anyone with a little determination. Here are ten well established strategies you can implement immediately to achieve the kind of lifestyle you desire.
1. Always Pay Yourself First This is a real basic in wealth building. We all think that we have to pay for everything else before we consider our own needs. This translates into things like investing in a retirement fund, setting aside money for the future and the like. If you work for someone else and have a matching donation on your 401K, you are a fool not to maximize your donation it is as simple as that. When you do this before you pay the bills, what you set aside is much less noticeable.
2. Get Rid of Debt We are a consumer society. Between a constant barrage of commercials on TV, magazines, the radio and more, you are always being enticed to purchase what you can’t afford. Aside for acquiring things you don’t really need, you are gaining debt and paying interest. Only buy what you can afford; it will save you a huge amount of money annually.
3. Save early and often Start saving early in your life and make a habit of it. The money you may pay yourself through an IRA savings or other investment is critical if you want to enjoy your retirement. No one really knows how long they will live, and running out of money in your golden years is a horror you can easily prevent. Interest builds over the years, and what starts out as a small nest egg can become a huge asset.
4. Create an Emergency Fund Everyone should have six months of expenses set aside in a special, untouchable fund. In this economy, too many people learned the painful lesson of what can happen when you lose your job without such a fund. Foreclosure, bankruptcy and consumer debt levels have gone through the roof in the last couple of years, and such problems could have been avoided, or at least alleviated, by a proper emergency fund.
5. Choose your Mortgage Carefully If we have learned nothing from the housing market collapse, mortgage risks have been made abundantly clear. The rate and the terms are critical to successfully paying off a home loan. Choosing risky balloon mortgages in the hopes of refinancing or selling a home before such payments come due have devastated families across the nation. You are better off with a fixed mortgage where you can send in additional principle when it is available, rather than taking a lower payment up front and letting the interest build constantly.
6. Be Frugal The boom times that ended so recently frowned on frugality. Today, it is the “new” cool. Our parents and grandparents understood this concept inherently, and we would do well to follow their examples. Frugal doesn’t mean cheap, by the way; it means being wise with your money. For example, purchasing a good pair of work shoes that you will resole for several years makes better financial sense than picking up a cheap pair every few months. Cut coupons, compare prices and put off purchases you don’t need. When you do buy something, pay for it in cash.
7. Manage your Money Learn what you need to learn in order to actively be in charge of what your money is doing at all times. This can be done through free resources such as books from the library, by taking classes or by utilizing online information sites. There are many ways to increase your knowledge regarding how money works and how to manage your investments successfully.
Building wealth and managing your money successfully is a learned skill. Make a commitment to acquiring the knowledge you need and developing the habits that will allow you to succeed over the long haul. You will never regret it.
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No One Can Dictate Which Wealth Building Program You Use
As you look for the best wealth building program, I’m going to encourage you to take charge of your life and think outside of the box for a bit. The world your parents or grandparents knew doesn’t exist anymore and you better take a different approach to your financial future than they did…or watch out!
If you’re expecting an early retirement…or ANY retirement…I suggest that you’re heading down the wrong path if all you plan to do is dollar cost average into a mutual fund as your wealth building program. Although that may have worked great for Grandpops, with the way the elite class artificially manipulates the stock market, it’s not such a great plan anymore.
Listen, I’m just going to come right out and say that you may as well stop reading this article if you believe that the markets are actually “free”. It really is finally the time for folks out there to wake up to the fact that the government, financial markets and media are used by the elite class to fleece you of your wealth as they convince you that they’re “here to help”.
OK, let’s get back to focusing on your wealth building program, shall we? Only you can come to the proper conclusions about what will work best for you. I’ve invested years training myself in many of the various moneymaking business and investment models. I’ve delved into offline businesses, online businesses, tax liens, real estate, niche websites, network marketing companies, insurance programs, etc.
Here is my conclusion, based on personal experience: you’ll never live out your dream life until you start listening to yourself and stop looking for others to fix it all. I encourage you to invest time looking within yourself in order to analyze who it is you are, look at your skills and figure out which skills you still need to develop to get where you want to go.
After that, stop looking to the government or your boss to take care of your future. As we progress further into the 21st century, only the people who develop themselves and independent businesses in different niches that produce residual income are going to make it big financially…the rest will suffer under more taxes, fees and oppression as the middle class disappears into a haze of poverty.
Sitting in a cubicle each day praying for a raise is the way to a decline in living standards. Today, the entrepreneur wins, which I believe is exactly what the founders of this country envisioned to begin with!
Although I’m not giving you a specific wealth building program in this post, I sure hope that I’ve been able to knock you out of your comfort zone and encourage you to begin looking at your future through the eyes of an entrepreneur. It’s up to you to figure out your path…not me, your spouse, your mom, your pastor, your boss, or your friend…YOU!
Investigate all the business models possible…online marketing, network marketing, option trading, affiliate marketing, real estate, etc. Discover for yourself exactly what fits you and build up a residual income stream. Continually push until that residual income stream is high enough to afford you and your family your dream life whether you get up each day and go to work or go to the beach.
Matt Zavadil is a skilled Global Information Network mentor who teaches and coaches people successfully building wealth. Get Matt’s Free Insider Report into exactly why the Global Information Network may be the business that finally provides you a solid monthly residual income stream.
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