| Creating your own personal wealth, from whatever | | | | you are currently investing or putting into your |
| means of income you enjoy, requires knowing where | | | | savings account every month, divide the total of it |
| you're going, and accounting for your own personal | | | | by 3, then - 2. Pay off one third of this money every |
| finances. It is essential to know what you are worth | | | | month to your outstanding debts.3. Pay one third of |
| - your assets and liabilities - and Owner's Equity - | | | | this money and deposit it in your savings account at |
| before you can start to develop a good | | | | your bank. This will accumulate into a pool of money |
| financial plan to create wealth. In the world of | | | | for your monthly needs. Over time you can use it to |
| accounting Assets = Liabilities + Owner's Equity so | | | | finance your family's future needs or apply it to the |
| this is what we have to establish now.Firstly you | | | | goals of your financial plan.4. Pay the final one third of |
| have to work out what your assets and liabilities are, | | | | this money to buy 1-5 year Certificates of Deposit, |
| then you can calculate your Owner's Equity. When | | | | but save up until you can buy CD's of $1000.00 |
| you know what you are worth, developing a financial | | | | every time you invest. Do this buying at one CD |
| plan to reduce your debt and achieve your financial | | | | every three months to six months, but ensure you |
| goals is the frst | | | | keep enough cash in your checking and passbook |
| step to personal wealth.Step 1. Calculate the amount | | | | savings for any emergency.The biggest barrier to |
| of your outstanding liabilities (or money you owe). | | | | financial success is large credit card debt and not |
| This means you write down in a list exactly how | | | | paying it off as quickly as possible. By following these |
| much you owe right now on | | | | tips you will pay off your liabilities in an appropriate |
| your mortgage, credit cards, and any other bills or | | | | manner. By investing in 1-5 year CDs you're earning |
| loans.Step 2. Now make a list of all your assets (dollar | | | | interest and compounding your money by purchasing |
| value you would get for these if they were sold). For | | | | more CDs at definite intervals. Compounding is very |
| example your cars, home and cash you have in the | | | | powerful.It is also suggested when you've enough |
| bank - list all your major assets.Using the Assets = | | | | money saved up in your normal savings account, you |
| Liabilities + Owner's Equity equation we gave you | | | | begin to speed up your mortgage payments every |
| before, calculate what you are worth. Most financial | | | | month. Most mortgage lenders allow extra payments |
| or credit advisers agree you need to allocate money | | | | per month but check this out with your lender before |
| every month into responsible saving, investing and | | | | you increase your payments. If they do, start paying |
| paying down your debts as crucial part of your | | | | extra every month and you will build equity in your |
| financial success. It's not enough to just put money in | | | | home faster, save on interest charges and complete |
| the bank when you are also carrying a credit card | | | | the mortgage much sooner. This financial plan is only |
| balance because you are losing the benefits of any | | | | one of several, but these principles are basic and |
| interest earned on your savings.To increase your | | | | necessary to reduce your debt faster and build |
| Owner's Equity you must pay down your liabilities and | | | | wealth for you and your family quickly. It will also help |
| avoid borrowing more money to buy more assets. | | | | you acquire spending, saving and investing habits that |
| It's dificult sometimes to stick to this plan when | | | | are conducive to your personal wealth |
| there's advertising in your face all the time to buy | | | | creation.Author: Carmel Muggeridge. Carmel is an |
| this, buy that and buy it NOW! - the "must have | | | | online publisher, and owner of a website offering a |
| everything now" attitude. But you must stay with | | | | wide range of the credit card options - Rights |
| your financial plan if you want success and personal | | | | Reserved. Article may be reprinted as long as the |
| wealth.Here is an example of a good financial plan | | | | content remains intact and unchanged and links |
| (but this is by no means th only one):1. The money | | | | remain active. |