July 13th, 2010 - By Marvin
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- Never borrow more money than you have saved up.
- Save a minimum of 30 to 50% of all the income you bring in each year.
- Always Find the Cheapest Place to Live in the Best Possible Neighborhood. Make sure your rent or monthly housing payment doesn’t take up more than 25% of your income.
- Always spend less than 35% of your food budget each month eating out, and spend more on foods that can be purchased from the grocery store. In addition to this, always purchase items that have a reduced price and / or use coupons. Only buy the bulk of your food when it is on sale. When the food goes on sale, buy some of it in bulk to save more. Buying generic brands will almost always be cheaper than brand name foods.
- The rule of clothing is to always buy the best you can afford at the lowest price. Focus on the quality rather than the brand name. Always buy clothes on sale or clearance at discount stores. Even if you shop at Department Stores you can find exceptional buys on the sale or clearance rack.
- Never lease an automobile. Always pay in cash. It is almost always best to buy a quality used vehicle. Additionally, the purchase of a car should not take up more than 50% of your net worth. Only buy a car if you need it, and use public transportation as an alternative if it is available.
- It is best to always buy electronic goods for wholesale rather than retail prices. Take advantage of pawn shops, Craigslist, Amazon, Ebay and other sources that will allow you to buy products that have depreciated in value. All electronics goods will lose their value over time. Losers sell their stuff at pawn shops. Winners buy their stuff from pawn shops. If you decide to buy brand new, make sure it is always done with cash, and it should not take up more than 5 percent of your net worth.
- Avoid spending excessive amounts of money on weak technology. Weak technology is defined as technology that is spoon fed to you by large corporations, technologies that have no real practical value in the world. Instead, save the bulk of your money for strong technologies, technologies that can truly change the world, empower your life, and build wealth. Always spend the least amount of money possible on weak technologies.
- Try to avoid student loans in order to pay for the cost of education. Either start saving money as soon as you have children, or, if you're already a teenager or young adult, spend a few years working at a full time job while keeping your living expenses low and saving 30% of your income or more. By combining your savings with financial aid, grants, or scholarships, you should be able to supplement the cost of education without going into debt. Make good use of government programs such as Job Corps.
- To escape the trap of debt, create a Debt Mastery Plan. Calculate the total value of your valuables, and set up a plan to save 30% of your annual income or more. By reducing your living expenses, selling your valuables, and saving a large percentage of your income, you can pay off your debt within a reasonable period of time. Reduce your interest rate as much as possible, and focus on paying down the principal instead of the interest.