You might be struggling to put away £10,000 in your savings but to build your first £100,000 of investment capital you should follow these outlines.
Know the UK tax laws:🔍
The UK tax system is not that confusing and a basic understanding of how it works will allow you to keep more off your money and begin to build wealth. This is especially true when you don't have that much disposable income left after tax.
Most people don't have pensions or ISAs but yet these are Tax relief investment vehicles. Ignorance of the tax system is the first cost we all succumb to. Educate yourself on the tax system and use compounding to your benefit. Start now, not tomorrow.
Go after free Money:💲
Well, why not? Most of us with debts are still paying high interest rate charges when we could be paying much less by switching or refinancing our debts. Paying off your debt is also a means towards investing in some cases as it means you have less debts to pay interest on and much more capital to put towards investments.
You can't go far if your credit card debt is compounding and burying you in more debt so it is important to find other alternatives than servicing your debt. There also various tax credits, benefits and funding available to those in different circumstances. Have you checked to see if you are eligible? You can check by calling the citizens advice bureau & your local council.
Create extra cash for your investments:💷
Perhaps you work in a factory; can you pick up extra hours? By bringing in more money, you’re funding your investments without touching your ordinary life. That’s very important because it’s more likely you’ll be willing to stay the course as you won’t feel deprived.
This may not seem like much, but if you can manage to put away an extra £10 per day from new business activities or projects, at 10% over 40 years, you’re talking about having £1.6+ million!
People aren’t trained to think like that, and our education system certainly doesn’t seem to be giving them these tools. You cannot attempt to put aside huge sums – fortunes are built £1 or £3 at a time. That money compounds, grows, and builds. It’s just the nature of things. An acorn doesn’t become a mighty oak overnight, or even in a few years. It takes time. So have some patience and put the little amounts away.
Declutter your life:😁
This may not seem intuitive, but trust us on this one. For most people, clutter is not only messy, but it has a financial cost. You spend time looking for things, space storing it, lose tax deductions because you don’t have your receipts cataloged or you can’t find the paperwork to mail-in a rebate, require more time for accountants and lawyers to sort out your affairs when something goes wrong, or miss your car warranty, making you pay for repairs costs out of pocket. There is an enormous financial cost to being disorganized.
Just declutter. Its that simple.
And finally consider these options.✔
Know how to manage your liabilities and not just assets. When you should pay off debt or invest?
Reinvest your earnings for compounding effect.
Consider index fundsas a stable place to leave your money.
Chase compounding as it is the unheard wonder of the world but whilst it can make you wealthy with your investments and savings, it can also cripple you with debt if you do not respect it.
Chase high interest rates with acceptable risk