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Yahoo
a day ago
- Business
- Yahoo
5 Money Lies Keeping Americans Poor, According to Jaspreet Singh
According to Dave Ramsey's State of Personal Finance report, 56% of Americans worry about their financial situation every day, including many people earning over $100,000. While it might sound surprising, it's possible to struggle and have little wealth even if you make a decent salary, control your expenses and don't rack up credit card debt. Find Out: Read Next: In a recent YouTube video, financial expert Jaspreet Singh explained that many Americans remain poor because they believe five money lies. Learn why these popular beliefs aren't true and what you can do to avoid mistakes that hurt your financial security. Buying a home is often more appealing than renting since each monthly mortgage payment helps you build equity. While Singh encouraged homeownership, he cautioned against viewing your property as an investment, partly due to how banks amortize the loans. 'They do something called front-loading mortgages, which means in the beginning, the majority of your mortgage payment is going directly into your banker's pocket with interest, and a little bit is going to actually build equity in your house,' Singh explained. Explore More: He said it can take 20 years before the point where half of each payment goes toward growing your equity. He also explained that homes are like liabilities because you'll always have ongoing costs, like taxes, insurance and maintenance, even after the final mortgage payment. Singh suggested carefully considering all the upfront and ongoing costs before buying a home and not relying on the property as your only investment for building wealth. Other income sources will be especially important during retirement. While a job provides you with money for your needs, it's unlikely that your work-related income alone will make you rich. Singh explained employees are really in the business of helping companies and their shareholders become wealthier. Plus, there's the fact that you need to put the time and effort into working to get your paycheck. Singh said that investing is a better path to becoming wealthy than relying on your salary, as you'll be able to benefit from companies' profits as a shareholder. Whether you receive dividends, interest or gains, that passive income won't require working like your job. This makes growing your wealth more sustainable. If your budget leaves little to invest, you might believe it's pointless or impossible to get started. But Singh explained that even $100 monthly contributions could make you a millionaire if you start early, earn a 10% return and maintain the habit for around 46 years. He recommended starting to contribute whatever you can, even if that means a few dollars per day. While your progress may be slow at first, stick with the habit, keep your wealth goal in mind, and remember you can adjust your strategy as your financial situation changes. 'As you earn more money, invest more money and keep investing your money when markets go down and over the long term,' Singh said. 'What we have seen is that this is a proven way to become wealthy.' Getting advice from your bank can seem like common sense if you're buying an expensive asset like a car or house. However, you shouldn't consider the banker to be a reliable financial advisor who will recommend the best money moves for your situation. Singh explained that bankers often get commissions, so they might suggest that you borrow more for something than you should. While they'd benefit from a bigger commission check, you may be stuck with an unaffordable loan payment or regret your purchase. So, watching out for yourself is crucial. That's why Singh recommended a system that lets you know how much you should be spending on all monthly expenses alongside your savings and investing goals. He recommended setting your spending limit to 75% of your income, allocating 10% to savings and investing 15%. According to Fidelity Investments, the average 401(k) balance in the first quarter of 2025 was $127,100. That was far below the $1.26 million that Americans participating in Northwestern Mutual's Planning & Progress Study said they'd need for a comfortable retirement. Singh explained that a 401(k) plan is important but is just one of the retirement planning tools to have. You should also consider additional options, such as IRAs, health savings accounts and regular brokerage accounts. Different tax rules and potential contribution limits apply to different accounts, so finding a financial advisor who can help with retirement planning is a wise move. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 6 Big Shakeups Coming to Social Security in 2025 6 Popular SUVs That Aren't Worth the Cost -- and 6 Affordable Alternatives This article originally appeared on 5 Money Lies Keeping Americans Poor, According to Jaspreet Singh
Yahoo
30-01-2025
- Business
- Yahoo
5 Steps To Create a Finance Vision Board for Achieving Your Money Goals
The recent Ramsey Solutions State of Personal Finance survey identified prioritizing saving and getting rid of debt as some of the top 2025 resolutions. However, staying motivated and focused to work toward such goals isn't always easy when you're busy juggling life. Find Out: Read Next: 5 Subtly Genius Moves All Wealthy People Make With Their Money A finance vision board is one creative and fun tool that can regularly remind you of which money goals you'd like to achieve, and how they'll improve your life. Making this type of visual collage also gives you the chance to reflect on the steps required to reach your goals. Here are five steps you can take to create your finance vision board. You should first determine and jot down your short- to long-term money goals. The Consumer Financial Protection Bureau recommends SMART goals that have a specific intent and timeline, are personally meaningful and are something you can measure and realistically achieve. Examples include saving up a $20,000 down payment for a home in three years, having $1,200 in your emergency fund in six months and wiping your $3,000 credit card debt in one year. When determining goals, look at your finances to ensure they're doable and work out steps for achieving each. For instance, you might review your budget and make room to save $200 per month for your emergency fund goal. Also, identify the benefits you'll enjoy when you achieve that goal, such as having more financial security and relying less on debt. Consider These: With your goals identified, you can now decide whether you'd prefer a physical or digital finance vision board. You might like the physical form, such as a posterboard, if you're a crafty person who enjoys cutting out and gluing pictures, adding items like glitter and customizing your board in a hands-on way. This is also a good format if you want the board in a fixed place. The digital version can be more convenient, flexible and shareable. You won't have to worry about buying and using craft materials since you can simply use online tools like Canva or download templates to make one. Think about your money goals to identify pictures, text, charts and other items that represent them and the changes they'll bring to your life. They should be personal and have an emotional appeal to increase motivation. Say your goal is paying off a high-interest credit card. To visualize a better life after the debt, you could gather images of a dream vacation, peaceful scenery and cash representing savings. You can also use quotes from money experts, personal affirmations, relevant statistics or even snippets of financial documents that show why the debt must go. Feel free to be creative and tap into your emotions, but keep all visuals related to the financial goal. You should also limit items to avoid too much clutter on your finance vision board; Discover suggests picking around 10 to 15 items. Whether you're making a physical or digital finance vision board, you should arrange the items in a logical, balanced and visually appealing way. If you're focusing on one goal, you might have a large center image identifying the goal and then arrange items around it based on importance, theme and your preferences. For multiple goals, you might create a timeline layout for short- to long-term goals, or split the board into separate goal-focused sections to make everything easier to follow. Additionally, feel free to add labels and descriptions to your images to explain how they relate to your goal. You can even jot down key money principles, or briefly list steps to reach your goal. After finishing your finance vision board, put it somewhere you'll look at regularly for motivation as you work toward the pictured money goals. You might also show it to others who can help hold you accountable when you get off track or celebrate when you make progress. Keep in mind that you can update your board as your money goals and financial situation change. For example, you can replace the items for your completed debt payoff goal, or change up the pictures to better describe what motivates you for a current goal. More From GOBankingRates 4 Subtly Genius Moves All Wealthy People Make With Their Money 4 Unusual Ways To Make Extra Money That Actually Work This article originally appeared on 5 Steps To Create a Finance Vision Board for Achieving Your Money Goals Sign in to access your portfolio
