A Financial Plan Towards Your Million

Creating a financial plan is very important if we want to realise our dream of becoming a millionaire. My next book The Straightest Path To A Millionaire describing about the simplest steps one needs to take to realise a dream of becoming a millionaire without quitting your job. Remember millionaire is not born but made! One should have that MADE mindset to do what the majority think is impossible.

These are the steps that should be taken to create a solid financial foundation for the rest of our lives.

Step 1. Pay yourself first

In this step you must open a separate bank account and deposit a minimum of 10% of everything you earn (i.e., your net pay, commissions, etc.) in it. This account should not be touched. Think of this account as your investment account and this account will make you wealthy. Before you pay anythings else such as bills, etc..you must take out 10% from your salary and deposited into this account immediately. Once you get a raise, add the raise to your 10% to speed up the wealth accumulation process. Do the same with any windfall money you receive such as bonus or any other incomes you received for that period. The rule of the game is you must pretend this money doesn't exist. This is your investment account and it is the most important key towards your MILLION or may I say it - your financial independence. The moment you start saving this money, you must let the money start working for you even while you're sleeping. This is done by investing the money at the higher interest rate and you'll start to see the power of compounding. You can talk to your trusted investment friend or financial consultant to advise you on which investment will give you a higher return.

Step 2: Pay your monthly bills

You'll always have maintenance bills for housing, utilities, clothing, foodstuffs, vehicles and so forth. It goes without saying that you need to cover these. This is a must and you must settle them all.

Step 3. Pay off your 'bad' debt

You must set aside 10% of your monthly income to eliminate these bad debts. Debt incurred to purchase liabilities (or non-cash-producing items) is labeled 'bad debt'. This usually includes most of the items charged to credit cards. If you have problems managing credit cards, a debit card is the most practical alternative. With debit card you will not spend unnecessarily. Stop impulse buying or spending.

Step 4: Spend the rest

Consider this as a reward to yourself for the hard work you have done.