As human beings, we’ve always been a goal-oriented species. It’s part of our nature to see our goals as a means to survive. Nowadays, we tend to live more than merely survive. That’s why our goals have evolved throughout the years. Our goals are primarily centered on achieving a more remarkable career, starting a business, and buying a home. But our financials usually get in the way.
Every American is in debt. There’s no actual argument about that. All of our debts equal more than $14 trillion. In comparison, that’s about 60% of the GDP of the US annually. That’s huge, and it’s one of the main reasons why most Americans don’t achieve their goals in the future.
It’s estimated that a staggering 80% of Americans are in a chain of debts, amounting to an average of $20,000 per person. The remaining 19% are still in debt, but not as much compared to the ones we’ve stated before. Then there’s the elusive 1%, which comprises the billionaires, millionaires, and those who have just finished paying off their debt. Following the tips in this article can help you reach a part of that 1%, and in turn, you can use the freedom to start working for your dreams.
Online banking is one of the essential apps you should have on your phone, laptop, computer, or any device that has it. It is an ideal tool for debt payments, financial transparency, and depositing your hard-earned cash. If you don’t have one right now, it’s easy to start an online bank account. All you have to do is visit the website of your chosen bank and sign-up. It’s that simple!
Many people tend to shun online banking because there are fees for withdrawing cash, but the point is that you won’t be withdrawing cash from this bank account. Instead, you will be growing it slowly but surely through investments, and that’s something we will talk about later. But first, let’s talk about paying for your debts.
Start with Your Largest Debt First
When paying for your debts, you must start with your largest debt first. For parents, this tends to be the mortgage. For employees, this tends to be their credit cards. Regardless of what your largest debt is, pay for it first. This will leave you room to distribute future cash flows once you’ve paid your largest debt. Additionally, paying your second largest debt becomes far easier once you’ve paid for the first one.
Enter a Year of Famine
We don’t suggest this for most people because it can be hard, but it can be a big advantage if you’re determined enough to do it. The year of famine we are talking about here is not about starving yourself for a year but rather fully stopping yourself from buying anything aside for things you need to survive.
Essentially, during this time, all of your money will be dedicated to paying your debts. You won’t buy a new shirt, a new bag, or a new gaming computer. Instead, everything will be directed towards your debt. Believe it or not, this strategy has made many Americans a millionaire afterward because they realize that they can pay off most of their debts in under a year.
Once you’ve paid your debts, it’s time to get investing. Right now, the world is your oyster, but let’s start with the safest investment options you have right now, and that is yourself.
Investing in the Self
Invest in your physical and mental health. Invest in a goal you’ve always wanted, especially if it’s a business. It’s all about believing in yourself during this time, and don’t be afraid. You’ll never fail in investing yourself. You’ll only learn.
Index funds are the safest form of stock because it’s accumulated stocks from major companies, which means if one stock fails, your investment stays safe. Of course, it grows pretty slow, but it’s a worth retirement plan for the future.
This is one of the most investments you’ll ever make simply because gold is a universal currency. When everything else fails, people pay with gold. So once you’ve invested in gold, you have a secured future.
Now let’s move on to riskier investments.
Blue-chip stocks are individual stocks from private companies such as Amazon, Apple, Tesla, and Microsoft. Since you’ll be investing in individual stocks, your investment goes with it if that company tanks. However, the ROI is much higher because you’re just investing in one.
If you have a bit of money to spare, let’s say $100,000, you can start a career in venture capitalism. It’s a risky proposition because you’re giving your money to start-ups, but the returns are insane if that start-up becomes successful. Who knows, you might become an investor to the next Microsoft.
Once you’ve paid your debts and started investing, all you have to do is reap your rewards. You can then use that money to finance your future goals, which will help you become a successful person. So give yourself the time to pay your debts and work for your success.