Wednesday, October 24, 2012

Pay Yourself to Wealth

It amazes me how many people think they "can't afford" to fund a stock portfolio. Even when I tell people I started with just $50 / month they act like that is too much. Of course these are the same people who don't think twice about spending that on dinner and drinks several times a month. Or they are the type who rush out to buy a newer car once they have their old one paid off.

I understand that it's fun to have new things. The excitement of owning something new is a powerful force and the American economy relies on it. But this force is also what holds a lot of people back from building wealth.

Over the years I've slowly increased my monthly investment contribution.  When I would get a raise at work, I didn't think about what more I could afford. I thought about how much more I could invest.  When I paid off my car, I continued to make the same car payments "to myself" into my brokerage account.  I was already used to that money being spent each month so why not put it to work for me.

Of course I understand that I don't think like most people do. I'm the guy who still has a flip phone for crying out load (sidenote: my iPhone 5 will arrive mid-November). But these decisions have made a big change to my net worth over the years and, I have no doubt, will make me a wealthier person when I retire.

For those of you who would like to follow this strategy but feel you are in too much debt I'd like to recommend a site I've come across recently called ReadyForZero. This is a free service that helps consolidate your debt in one site. It then helps you set up a plan to get out of debt. It's a cool sight, and again, its free.

Well that's enough "preaching" for today. I promise to get back to talking stocks on my next post.

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Roth IRA Backdoor 

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