These are tough times for the sort of scrimping and saving required to boost net worth. Wealth building during the '90s stock market gave way to a cruel bear run just ending in 2003. And some experts say the situation might degenerate again after 2004 if the real estate rocket runs out of fuel.
Taking note of such cautionary signs, however, doesn't mean having to embrace a doom-and-gloom financial outlook. In fact, there are some basic strategies you can employ to bolster your finances. Start, of course, by making a commitment to wealth building by adopting the BLACK ENTERPRISE Declaration of Financial Empowerment, displayed in every issue of this magazine.
In this article, we'll show you eight ways to develop sound budgeting habits to free up cash for investments, and we'll give you tips on how to invest at minimal risk and maximum returns. Read on to find out how you can change your financial life.
1 budget in real time
Most of us are locked in a losing battle between wealth building and bill paying. But sound budgeting is the linchpin of any attempt to accumulate wealth. Beyond budgeting, there is no way to get a handle on how much money you're bringing in and how much you're sending out. In fact, budgeting is a key plank of BE's DOFE, set out in Principle No. 4: to engage in sound budget, credit, and tax management practices.
For most of us in this era of PCs and the Internet, the job requires nothing more than hopping on a computer with Quicken or MS Money. Unfortunately, says Pasadena, California-based financial planner Percy Bolton, what technology giveth, it can also take away. While technology helps make the development of a family budget hassle-free, it often sabotages efforts to live frugally. Says Bolton: "The fact is most couples who tap the ATM or make debit or credit card purchases on the fly find that their budget goes out the window in no time."
As she prepares for retirement in the next decade, Bettye Haysbert, 60, an educational consultant who lives outside of San Francisco, tracks her expenditures by logging them regularly online. "It is important to do so," she says. "I have to keep up with what goes out or I won't be able to stick to my investing plan."
2 slash debt now
You pay enough for goods and services, right? So dishing out two or three times the retail price for an item seems exorbitant.
Bolton's advice on how to gain control of your credit card purchases is simple. He suggests you pay the minimum on all charge...