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How should I handle my money?
I'll make this real simple. No get-rich-quick
scheme will work. Wealthy people work hard and long. They learn from their mistakes, and the mistakes of others.
If you want to get out of debt, make your money go farther, and possibly become wealthy, then don't waste your money on
a lottery ticket or any other get-rich-with-no-money-down schemes. Why don't you try doing things like:
- Write out a budget
- Stick to that budget
- Include an emergency fund in your budget, and be
clear on what constitutes an emergency
- DON'T USE CREDIT - no credit cards,
no lines of credit, no car payments, regardless of interest rate offered
- Save up
and buy things with cash - you're interest rate will always be 0%, and you can often manage a better price with cash!
- Purchase wisely. For example, a one or two year old car can look just as nice as a brand new one,
but cost thousands less - especially when paid for with cash!
- Pay off current debts
in the order of smallest balance first, regardless of interest rate. When the first is paid off, add its payment
to the next smallest. This technique isn't going to save the most interest, when calculated mathematically.
But it will work, because you'll actually see success when the first smaller debts get paid off. Those early successes
make it much easier to continue working through the big debts later.
- Invest wisely.
That includes diversification. The easiest way to do that is to invest in mutual funds. They do the diversification
for you, as far as what stocks and bonds you're invested in.
- Take full advantage
of any employer-matching 401(k) plans. That's essentially extra money your employer is offering to just give you.
- Buy only term life insurance. You'd be surprised how inexpensive it is, and you'll get
a much better rate of return investing the savings yourself, rather than giving the insurance company more money for
a policy that pays barely above the inflation rate. They'll tell you that most people won't invest the difference,
but remember - YOU'RE NOT MOST PEOPLE! You actually want to get ahead in life!
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