Simple Steps to Enhancing your Financial Goals and Targets

“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”

--Robert G. Allen

3 - Key Steps to enhancing your financial Goals and Targets

1. Know your Income & Expenses

2. Know your Savings

3. Work your Savings.

Memorise these steps above if you can.

Sit quietly alone or with a friend or spouse and work through these simple steps. The results are outstanding in the long run.

Step 1: Know your income & Expenses

1. What’s coming in and going out?

Get a simple Spreadsheet in excel to record your income and expenses. Most individuals find this daunting because they are worried of the true reflection. However, it's the first step to achieving your financial goals. Go on, just start, you can do it. Here is link to a sample spreadsheet that can help you get started.

2. Whats necessary and not?

When the reality comes to light, you need to assess what truly necessary on your list of expense. Keep what you can't do without. Essential bills and a bit of pocket money for yourself and assistance to others.

3. Then trim

Cut off ALL non-essentials. Wants not needs should all be trimmed. Unnecessary outings, impulse shopping etc.

Step 2: Know your Savings

1. How much is saved per month/ per week?

After finalising step 1. Your savings per month or week becomes apparent. You should aim for more than 10% of your monthly income. Target 20% if possible.

So if you earn £2,500 per month, aim to keep £500 as savings and live on £2000.

With your figure now known and recorded on the spreadsheet, you can make projections and clearly see the result/numbers. Project your savings for 6 months, 1 year to 2 years. You will clearly see whats possible, what you can achieve. Then ask yourself the next question below.

2. Can it be increased?

This question stimulates your mind to think of ways to increase your income. Extra jobs, hidden talents that can be converted into income, maybe longer hours, extra shifts, coaching, apply for new job that's more challenging and increases your responsibility.

Remember to take jobs, if extra, that keeps 'conflict of interest' in check with your current employer. What extra can you do? Keep asking that question.

3.Then boost

Take action. Boost your earnings. Put the plan to work. Stick to the decisions you have taken. Make it happen.

One of the richest man in world back in time - a great king had said this very inspiring quote;

"Know your sheep by name; carefully attend to your flocks; (Don’t take them for granted; possessions don’t last forever, you know.) And then, when the crops are in and the harvest is stored in the barns, You can knit sweaters from lambs’ wool, and sell your goats for a profit; There will be plenty of milk and meat to last your family through the winter."

(King Solomon "reference his proverbs. Message version Pro 27:23-27)

The key word here is 'Know'. Imagine back in time how much livestock a man of such great wealth would posses. Yet he advises to know each sheep by name and attend to each carefully.

In modern time, livestock now equates to money, stocks, investments in general. Following this simple advise gives a true inspiration to seek knowledge on how to carefully tend and grow your income.

Step 3: Work your savings

Now you know, have your savings in place and growing it, you need to put it to work. Your savings MUST work for you. A bit of a hint from the quote by Robert G above at the start this article.

Here are some ideas and links to research below. Explore more options, carry out more research and speak with a professional financial adviser. First, you want to be clear on your objective - Get your savings working for you!

Savings 'workforce' Ideas - Get your money working

Stocks and Shares ISA

Build a portfolio for yourself and future financial security.

Refer to my previous post: kick-starting-investing/step-guide-to-kick-start-your-stock-investing. Return on investment could be over 5-10% year on year. With Dividend payouts re-invested and Compound interest in play your stock portfolio can yield very good returns. Compound Interest calculators can help as well.

Good video on YouTube - Stock Investing for Beginners.

Check out Warren Buffet's Stock Portfolio. He is one of the most know value investor of our time. Good mentor to follow on stock investing. Check YouTube for more videos on his advise and strategies. Trust me, they are very simple but need discipline.

Stocks and Shares or Share Dealing account

Open one with a good online broker. Deposit some cash in it and get shopping for stocks. Owning a stock is as simple as buying a shoe from the shop you have had your eye on for months. You want to get it at the right price, when on SALES! Do your research and always invest in value stocks. Check my Forum on Value Investing. Amazing returns on investment in the long-term.

Lifetime ISA

UK residents only. Free 25% government contribution until you turn 50. So for every £1 you save, the UK Govt will contribute 25p. Example in save £1000, the Govt will add £250. Cut off age is 39 years. Click on link for more details. UK Gov on Lifetime ISA.

Cash ISA

Check with your bank. More in UK.

Savings for Children 

Preparing for their future. Setting aside a fixed amount into Junior ISA's. Interest 2%. Your child will only have access to the money when they turn 18.

Example

Imagine setting aside £50 a month for the next 18 years from when your child is say 1 year old.

50 x 12/y x 18 = £10,800. This is not including the 2% interest per year.

Similar investing my exist in your country. Do some digging.

Invest in companies

Startups or existing companies after careful research of the companies goal, viability/prospects, Balance sheet, Leadership qualities of the companies team etc.

Invest in property

Real Estate purchase, lands etc

Mortgage Over-payment (Reduce debt)

Make over-payments into your mortgage to save on interest charges. Great website Mortgage Over-payment. Plug in your figures and see how much you can save when you make over-payments to your mortgage. Clearing your mortgage early is another great way to invest.

Throwing caution to the wind can be very dangerous especially with possession. Now you are earning or invested, seek ways to improve you ability to grow your wealth. Inflation is your worst enemy if your investment aren't working.

The reverse happens your earnings go to work - you will have plenty of milk and meat to last your family through winter.

"If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed."

-- Edmund Burke

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Recommended online Brokers

• IG. Take a look at their fees.

• Hargreaves and Lansdown. Take a look at their fees.

• Degiro - Especially for those living in Europe for examples Portugal. Take a look at their fees.

• Bamboo App - Especially for those in Africa.

Do your research.

Counsel

• Always try to buy stocks when they are on SALES! (basically when there is a dip in the share price).

• Drip feed your investments. Share prices vary day to day especially in times economic crisis, high volatility becomes a common theme. In the same vain, be watchful of purchasing fees.

• Investopedia is a great website to help you with understanding almost any financial terms and definitions.

Disclaimer

Note: Shares and Investment Lifestyle website is only for information purposes. Please do your detailed research. Any investment decision taken will solely be your responsibility. You can get back more or less capital than you invest.