27 Solid Ways to Build Your Wealth | Kiplinger

There are some solid tips in this article, many may appear common sense, but not to everyone I fear.

There are two points I would modify. You don’t need to dread a budget because you don’t need one if you 🤑 save first automatically and 🤑 do not charge any purchase you can’t pay in full each month. That way your budget is automatically set for you and you can’t over spend.

Building wealth is essential to accomplish a variety of goals, from sending your kids to college to retiring in style. But establishing a solid financial foundation will also help you survive stock market corrections and bear markets, recessions, health emergencies and other setbacks.

Our plan outlined here covers every aspect of your financial life, from investing to insurance to building credit. Most of our advice is basic, because a strong foundation sets you up to reach your financial goals. If you’re just starting out, these fundamentals should stay with you throughout your wealth-building journey, although they will likely evolve along with your situation. Even if you have been practicing sound financial principles for decades, all of us can use a refresher every now and then.

Source: 27 Solid Ways to Build Your Wealth | Kiplinger

6 comments

  1. I wonder about “Long-term Care Insurance”. I’ve seen it pop up in several articles I’ve read, especially in more “fluffy” articles. Always, Genworth is mentioned as a “potential source”. (I’ve never seen another source mentioned). As I’ve considered our own end of life expenses, including extraordinary costs associated with care facilities, I think I can cash flow most of it and if we needed to dip into savings if memory care, etc., is needed, so be it. I’m interested in other people’s thoughts, other than the Genworth Sales guy’s thoughts.

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    1. It depends on several factors, your current age, your assets and your willingness to spend down those assets. It also matters if there is a couple. What if one requires LTC? Will that affect the income of the other or deplete their assets? I have a friend whose husband had a stroke leaving him confined to a nursing home. To cope and protect some assets they divorced and the wife had to sell her engagement ring. Keep in mind most LTC is not nursing home confinement, but home or part-time care. I purchased a policies for my wife and I nearly thirty years ago while in our forties so the premiums are reasonable. My goal was to help protect assets.

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  2. I am a big fan of having a budget or more like the article suggests, “a spending plan”. You commented that you don’t need a budget if you save first and do not charge anything you can’t pay off. Since I went from a weekly paycheck to a monthly pension, it is more important now to me to have a “spending plan”. I save for known monthly and quarterly expenses. I put away a little extra for the unknown. On the first of the month, how do I know if I can charge something and pay it off? I do not go by my checkbook balance, I go by my budget. I may need that money for something later in the month and the purchase might just have to wait.

    You are also a big fan of saying that people who say they can’t save can afford tattoos and lattes. One of the best tools to start saving money is to see where you are spending money by recording all of your expenses. Once you see that you are spending $75 a week for coffee, you may realize that is a poor use of your money. But by recording your expenses, it can also become instantly your budget. You’ll know that you need $75 next week for overpriced coffee.

    I always had a gut feeling of what I was spending for gas for the car for commuting. My wife knew about groceries. But until it is on paper, we both really had no idea what the actual expenses were. We just knew the checkbook balance.

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    1. We are in good financial shape and have worked on it pretty hard over the years. My wife and I still use the envelope system and stay pretty close to our budget. These days, instead of sweating through tight times, we are able to loosen up but still stay accountable to an agreed upon spending plan.

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    2. I suggest that after a month or two retired one has a pretty good idea of what will be left at the end of each month after all fixed expenses, including a bit set aside for emergencies. That amount then can determine what can be charged or better still don’t charge at all if you are not confident with month end funds. My envelope system is actually bank accounts. Our SS payments are sent to one account. My pension goes to another and then a portion auto transfers to two separate savings accounts and two other checking accounts so I know on the second of the month how much is left to spend on other than basic bills. Nearly all my monthly bills such as utilities, HOA fees, insurance, etc. are automatically withdrawn from a designated checking account for that purpose. A few such as AT&T, cable are charged to a credit card to get points, but the funds to pay them are already in the bill designated checking account. One checking account is managed by my wife and the basic account by me. Once a year I review the basic ongoing bills and as necessary adjust the amount transferred each month to the bill designated account. If that goes up, as it always does, then I automatically know I have less to spend from the basic checking account.

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