7 Specific Ways to Distribute Your Finances to Achieve Long Term Wealth
Ask the average person what the money management means to her and the usual response will be as follows: "Pay all bills on time and try to save what's left." – It's not very inspiring or sounds very funny, huh? Here I outline a simple way to change the way money is viewed and treated. An efficient and practical way to manage and monitor your finances and get out of debt, which is also fun and if done consistently … the long-term rewards will be extraordinary.
Below are the 7 ways you should distribute your money. . – If you can, set up 7 separate bank accounts for each specific use, otherwise, 7 bottles, boxes or any feasible container will work just as well to start. Make sure you do this regularly, what you must maintain, that is, either daily, weekly or monthly.
Assign 10% of your money to be reserved only for investment. Only use these funds to buy investments. These investments should generate a continuous "residual income" or an appreciation / growth of capital, that is, sell to obtain a profit. Once you have gathered enough funds / capital, buy the respective investment and then start accumulating again until you have enough for the next one and continue repeating the cycle. This is, by far, your most important fund, since you will finally work to achieve your financial freedom / independence.
2. Long-term savings:
5% of your money should be allocated for unique purchases & # 39; such as cars, clothing, home furnishings, home improvement, home entertainment. This should also be used for holidays abroad / long getaways.
3. Long-term expenses:
Another 5% should be allocated for any small ongoing debt, usually credit cards or small personal loans.
These are your main expenses of subsistence and, therefore, 55% will be assigned to this; Mortgage / Rent, Car loan, Utility bills, Food, Spending / Travel expenses, Subscriptions … get the picture …
10% of your money goes to your money continued Learning financial intelligence and personal development. This is very important since you can never stop learning and improving. This would include; Books, DVD / CD, seminars, workshops, travel and accommodation expenses, training materials, etc.
This is another important fund. Life as you know it is too short and if you do not treat yourself / rewards from time to time along the way, you may feel very laborious and bored. – 10% of your money goes here and at the end of each week / month / quarter, you must exploit the whole lot in a gift of your choice, for example. Your favorite restaurant, the theater, the spa treatment. – You are only limited by your creativity … The idea is that you really have fun and you recognize that you have reserved money specifically for this, and you do not feel guilty about that!
7: Charity:  Wealth is shared, 5% goes to repay the most needy. You can make this a regular contribution or save and build a large donation to charities / causes of your choice. – The more you return, the more you will receive …
Please do not assume that you need a lot of money to start doing this, because you can not … You can start with very small amounts, The importance is to make it a habit. Even starting with a small amount, the law of composition will gradually turn it into something substantial. Teach this to your children from a young age and just watch how fast your financial intelligence and also your fortune will grow!