One advantage of being wealthy is that you can spend some of your money on the adventure and fun things you want to do. 

I believe you can do this, too, as you are building your wealth. 

None of us knows how long we will live, and part of wealth building is creating life experiences that give you joy. 

Wealth is more than dollars and cents.  So, part of your financial plan is to fund your important life dreams – not all at the back end of accumulating wealth, when you’re older, but all along the way. 

I want you to create a dream list of important experiences, or even purchases — things you want to have, do, or be – in the near term, and use some of your current wealth to create a life of joy today.

There you have it – 22 Habits for Money Self-Mastery.  It takes time to create new habits and I’ve given them to you one at a time so it will be easier for you to incorporate them into your life and make them lasting. 

When you’re mastered the 22 habits, you’ll be well on your way to building your own wealth and wealthy lifestyle.

Here is where you can create a habit that will serve you well for your whole investment lifetime:

Withdraw money from your savings/spending accounts periodically and invest that money to build wealth. 

Again, you can set up a withdrawal from your paycheck to go right into your 401 (k) at work or your own IRA (Individual Retirement Account). 

If you have a business, first of all pay yourself a salary.  Then part of your earnings can be allocated to go into your own self-employment retirement account. 

By definition, retirement investments are long-term, and therefore much of that money should go into growth investments – equities versus bonds.  You’ll get the huge benefit that no taxes are taken out of the earnings in those investments.  Your money will compound tax-deferred.  If you get a 10% return on these investments, your money will double in size in just over 7 years.  That adds up quickly leading to wealth over a lifetime.

Some of you are risk takers — you can sleep at night knowing your stocks might go down as well as up. 

Others would be very unhappy, perhaps lose sleep, if your investment dropped more than 10%. 

This is the whole reason to have an investment policy that takes into account how much risk you are willing to take to get wealthy; it’s the ‘risk versus reward’ comparison. 

Part of managing that risk is having a sell strategy as part of your investing plan.  Working with an investment advisor will help you determine what kinds of investments have what level of risk and whether they are right for you. 

You cannot build wealth without taking some risk with your money, but you can build it more slowly, taking less risk and feeling better about the whole game of investing.

Donald Trump, billionaire and financial educator, says,

"The best way to invest without excess risk is to be prepared.  Learn about investments and never invest in something that you don’t  understand. "

I agree. 

While you can get advice from financial professionals, no one cares more about your money than you do. 

Read financial magazines and the business section of your newspaper.  Learn the language of the investment world.  Take investment classes at your local community college.  Work with a financial adviser who wants to teach you, as well as  invest your money. 

Knowledge does not take out all the risk  of investing, but it helps you know better what and when to buy, and perhaps more importantly, when to sell an investment.
 

To be wealthy, you want to grow your money as fast as you can. 

That means taking most of your savings – money that won’t be needed for awhile – and invest it in ways that make it grow, not just earn interest. 

My rule of thumb is the one year mark:  If you’ll use the money in less than a year save it in interest bearing accounts that you can tap easily, such as money market funds, not invested in assets where you could take a loss to sell it and spend the money (such as stocks). 

If you don’t need your money for 1-2 years then put it in longer-term “income” investments, such as bonds, where it earns more interest than short-term  savings. 

If you don’t need it for 2 years or more, then consider growth investments, such as stocks or mutual funds that are growth oriented. 

You are taking some risk, yet you have a better chance of growing your money to expand your wealth.

I don’t know a single wealthy person who keeps significant sums in a checking account that does not bear interest. 

The theme here is your money has to earn money.  Make your savings work for you. 

If your current checking account does not bear interest, move the money elsewhere.  Plus any money saved that needs to be used within a year, still needs to earn higher interest. 

You can put it in a Certificate of Deposit at your bank.  That will earn higher interest that your checking account.  Three- or six month Treasury Bills can also be purchased for higher interest.

Perhaps the greatest discipline of the wealthy is the ability to save money. 

My Dad said once, “Carol, every month, save something from your income.”

Even if it’s only $10/paycheck at first, do that.  If you spend everything you earn, you never can build savings and investments. 

The easiest way to start saving is to make it automatic – a withdrawal from your paycheck, or from every check you collect as a business owner.  Some amount of that income goes into an interest-bearing savings account. 

When you accumulate, say, $200, that money goes into investments.   If you can put the savings in your retirement plan at work,  all the better because it will grow tax-deferred.

Wealthy people, for the most part, are not impulse buyers.  They don’t cruise shopping malls browsing to buy here and there. 

They don’t go into a book store to buy one book and come out with four.  They aren’t watching TV shopping networks and ordering stuff they don’t need with money they don’t have (i.e.  credit cards). 

They are mindful, conscious, about where they spend their money.  Do you have the spending habits of the wealth? 

If not, you must decide right now:  Do you want to be wealthy, or not?  If so, you must take charge of your spending habits and master self-discipline.  It is another master-key to become rich.

Wealthy people don’t have financial surprises.  They plan ahead for big cash outlays. 

Whether it is for a house remodel, a daughter’s wedding next year, a big vacation soon, or just paying your taxes in April, you need to set up a special “Impound Account” to cover big expenses before they are due. 

Think of any large cash outlay you’ll need to pay for in the next year.  Add the total of all of them, and divide by 12.  That’s the amount of money that needs to be saved in your impound account each month. 

Then, when the bill comes due, the money is there.  You won’t have to scramble to find the funds, or be late with the payment because current cash flow won’t cover these “surprise” expenses.

Wealthy people decide what they value, and that’s where they spend their money. 

You may spend money unconsciously or at least without any particular game plan.  That’s why having written financial goals is so important. 

Now I want you to take the Cash Flow Statement and see what you are valuing with your expenditures. 

Do these outlays reflect your personal values? 

Take the outline of this statement and create a budget for this month:

• What do you want to spend in each category? 
• Where can you cut? 
• Where do you want to add funds? 

Promise me you’ll try this for two months.  And stick to your budget as best you can.  Then review it. 

How did it feel to control where your money went? 

You’ll want to make some adjustments after the first month.  Then do it a second month. 

Wealthy people have a plan though they may not call it a budget.  But that’s exactly what their spending plan really is.