A Financial Plan For Security

So I’m now on the road and the first thing I have noticed is that nobody really gets wealthy from a job!

I’m baulking at the goal that I’ve set myself, with savings at £0.00 and no money coming in that lingers at all. My debts stare me in my face and plague my dreams, and while not a lot when compared with other people, it still provokes the letters to come through and means I can’t borrow money to do a thing due to a blown out credit rating! Confucius said 'A journey of a thousand miles begins with a singe step', so using that as my initial inspiration, I decided to look around for some books that could shed some light on what needs to be done. 

An excellent book

Over the weekend I completely devoured The Richest Man in Babylon v:shapes="_x0000_i1025"> by George Classen which is an excellent book that spells out the fundamentals of thrift and building up wealth slowly by sticking to basic principles, one of which I touched upon in my last post, which is to save 10% of your salary. This book highlights other key disciplines which are absolutely mandatory on the journey to wealth and is hailed as a classic; check out some of the reviews before you pick up your copy

A Basic Plan

I have decided to do is to make sure my plan incorporates all areas of wealth but also provides security should certain things go to pot. For my basic plan, I will split my savings money in half. 50% will go into a place which will allow me ease of access if I need to get it quickly. I learnt that the fancy word for that is money that is ‘liquid’. Over time, I want this regular process to provide me with income which will, at the very least, cover 3 months of living expenses. If for some reason, my job within the pharma industry is no longer required and I get fired on my journey to yell0brickrd, being able to relax as far as finances are concerned is something that is very high on my list of priorities. In saying that, not all accounts that reward you for saving money via interest are created equal.

I would like the other 50% to go somewhere which may not necessarily be as liquid, but which will provide me with more money than my savings account as a reward. There are a few options available which will allow me to do this, some of which I will discuss in a later post.

I also now have a designated ‘emergency account’ into which 1% of my salary will go each month. This is there to provide me with a starting point during those times when something requiring an unexpected expense occurs; flat tyre’s, busted boiler, broken microwave etc. More often than not, these situations are amongst the ones where stress sets in as we realise that we don’t have enough funds to cover them. Over time it makes sense to increase that percentage as wealth increases.

In drafting your own plan, be sure to consider all elements take may not necessarily take you to yell0brickrd and beyond, but will provide you with a solid base. My plans also include the other things which make life feel secure such as a pension plan, insurance etc.  In contributing to all of these things in small amounts, I am confident that a sense of financial security will begin to build up.