Often times, people believe that wealth is an unreachable goal based on their current financial situation. I am here to tell you that is not the case. If you can set a specific aim to become wealthy, I guarantee it can happen for you.
Let’s examine making a specific aim. If you want to meet the financial goals you have set out for yourself, you have to be intentional with all of your financial decisions. Many people give up their wealth for what is in their driveway, in the closet and in their stomach. These are all areas where money can be found to invest in wealth, but end up wasted on temporal and material purchases.
Let’s look at this scenario and use the car you may be driving as an example. Let’s say you are leasing your vehicle for $250 a month and you put $1,500 down to get into the lease. If you leased the vehicle for 3 years, your total outlay for the vehicle, providing you do not exceed your mileage allowance, will be $10,500. Now let’s say you set an intentional saving plan for yourself, and you decided that instead of leasing a car, you are going to take the money that you have used for the lease and invest it. You take the $1,500 you were going to use as a down payment along with the $250 monthly payment and say your average rate of return is about 6%. At the end of 3 years, you would have accumulated $11,597. Now let’s say you decide to take that $11,597 and let it ride for the next 20 years, and also continue to contribute $250 a month. At the end of that 20 year period, you would have accumulated $150,552. We at DNA Financial believe buying a car is a better option than leasing. If you purchased a used car for $10,500 and paid it off in 3 years, the car now belongs to you and can be included as an asset on your balance sheet.
One of the keys to establishing wealth is making interest, not paying interest. If you would have leased the car, you would have been paying interest and at the end of the lease, the asset does not belong to you, and you have lost money instead of gaining it. In this scenario, we only used the car as an example. Just imagine if you found additional savings in your grocery bill, and what you spend on clothes and you added those savings to your $250 monthly contribution as well. Please note that this savings plan is in addition to any 401K saving plan you may be already contributing to. Discipline and patience are essential, but if you begin to set intentional saving goals, you will find that your wealth will begin to increase.
Building wealth is about using your income as a tool to build assets. That is a key in how you begin to make your money work for you.
Founded in 2015, DNA Financial Services LLC has pledged to Educate, Empower and Equip the financial DNA of its’ clients now and for generations to come. The company offers a number of financial services designed to bridge the gap in wealth building education while aiding and advocating for the financial literacy of people from all walks of life.