Highlights in this issue:

*** Want to be rich? Learn how to create an income snowball…
*** Start a jam jar fund – just R50 a month could turn into R860 by this time next year…
*** Are you a big dreamer? You could be setting yourself up for financial disaster… and more…

-----------------------------------------

From the pen of Karin Iten

Dear Investment Academy Reader,

Financial wisdom isn’t something you’re born with. It’s something you learn.

I wish it weren’t so, but the truth is, those that are brilliant with their money achieved this through some type of third party guidance. Maybe they absorbed it from their parents, or perhaps they read about it in a book. Regardless, they didn’t just wake up one morning and – hey presto – all their money matters just made sense.

Because it’s something you need to learn (and apply), I’m here to help you on your way to financial brilliance.

That’s why, today, I’m divulging my top six secrets to reach genius status.

You’re only 6 steps away from managing your cash brilliantly

Secret #1: Roll an income snowball
We’ve all heard of the debt snowball – when spiralling debt gets out of control, it rolls you all the way down the hill into a big wad of trouble. But if the “snowball” effect works so well at adding to your debt, why not reverse the approach and apply it to generating passive income instead?

The trick: Don’t start buying more after you set up a stream of passive income. Rather, roll that income into other passive income ventures – like renting an apartment to university students. Once each new venture becomes self-sustaining, it’ll contribute to the income snowball. And you can reinvest this extra cash into yet another opportunity.

Handy tip: When you start a new money-making venture, you probably won’t be doing it full-time at first. Make sure it’s something you can do on the side and be passionate about it. If you love something, you’re more likely to put your all into it – and the money should flow right in.

Secret #2: If you don’t have an emergency fund, start one NOW!
No one can anticipate the roof caving in or your computer shutting down for good. So set aside an independent rainy day fund. The key to doing this is simple, says tips site tellmehowto.net: Save a little bit and save often.

Handy tip: Place a small amount (say R5) into a “safe place” each week. Once a month, add a R50 note into the fund too. At the end of the first year, you’ll have R860 in the fund. If your partner does the same, you’ll have R1,720. Do this religiously and soon you’ll have enough to cover just about any unplanned emergency.

Secret #3: Financial calculators are your friend – use them
Why pay for a consultant to do the maths, if a free calculator will do it for you? So if you need help with your budget, home loan repayments, income tax or more, use the calculators at www.moneybiz.co.za. They’re free and, unlike some bank calculators, they’re super easy to use.

Secret #4: Spending less keeps you grounded to what matters most
Stop buying things you don’t need. Purchases of a few hundred rand can quickly add up to thousands. Plus, if you haven’t budgeted for it, ten-to-one, you’re probably paying for it on your credit or in-store card. And that means you could be paying interest of up to 25% on everything you spend.

Handy tip: If you want to buy something expensive, sit tight on the idea for 24 hours. It’s far too easy to get caught up in the emotion of having the item. But if you wait, chances are you’ll talk yourself out of it or discover you really need it – but can find it cheaper somewhere else.

Secret #5: Dream big. It’ll motivate you to save
We all want to retire early, but that goal is completely intangible. And if something’s vague, you’ll never get there. So stop dreaming big and start fleshing out what the idea of retiring early means to you.

Does it mean the chance to take a holiday anywhere in the world every year? If it does, imagine those holidays – sitting on the beach in Zanzibar or eating a hot baguette and fresh brie under the Eiffel Tower. Now that’s what I call motivation!

Secret #6: Be open to discussing money with your partner
Money can’t buy love or happiness, but it sure can tear them apart. In fact, money is one of the biggest reasons couples get divorced.

So be open about money with your partner. Not only will this save you from many arguments and sleepless nights on the couch, but you’ll be able to align your financial goals, know where the other is spending and where both of you can cut back. Plus, it’ll give you the chance to solve problems together. After all, two heads are better than one!

And always remember, financial intelligence is your most lucrative asset. So get smart today!

Here’s to your financial freedom,

Karin Iten
For the Investment Academy