How to become financially stable.

I was browsing request today, and came upon the question of "How to Become Financially Stable", and I couldn't resist a response.

1. Don't spend more than what you make.

This is probably the hardest, but most important. Mosts experts say that you need 3 to 6 months of you average monthly income in savings, so you can "be stable" in periods of downtimes. I'm a consultant, I worked hard last year, and basically worked on my business from home the last 3 months, thanks to a little bit of savings. Next week, I go back into consulting.

Get out of debt if you are in debt now, and stay out!

2. Read and Learn

Start with two of Robert Kiyosaki's books:

1) Rich Dad Poor Dad

2) Cashflow Quadrant - Rich Dad's Guide to Financial Freedom

One of my goals for the year of 2008 has been to read 10 pages per day of books just on finances, motivation, success, prosperity, and so on. So far, I have been unable to keep my goal, I have exceeded it, and reading about one book per week! Hopefully soon, I'll start posting my reading log on my website. But rather than making huge goals, start with just 10 pages a day! The book that got my on the reading spree was Jeff Olson's "The Slight Edge". He basically says success is made in very small increments. (I also read other books for classes I'm taking and for my professional career, but here, I'm talking about 10 pages a day of strictly books on finances, motivation, success, prosperity, etc...)

In Cashflow Quadrants, he teaches the difference between:

a) employees

b) self-employeed

c) business owners

d) investors

3. Start any part time to business in order to get experience.

Robert Kiyosaki says: "Work to learn, don't work for money."

See my website below for what I'm doing in my part time.

4. Start investing, even if just 10% of your take home pay.

The sooner in life you start, the sooner you can be financially stable.

5. Learn the difference between assets and liabilities.

Again, Robert Koyosaki says that your home is not an asset, it is a liability (unless your own it and are renting it out).

An asset puts income into your bank account, a liability takes money out of your bank account. I'm not saying home ownership is worse than renting, but don't consider your home your only asset. A home will cost you in taxes, lawn care, pool care, paint/roof upkeep, decorating, etc...

6. Realize that when you retire, you have to be a business owner or investor (one of the quadrants above). You don't want to be going to a job when you are 80 years old (unless you believe Aubrey DeGrey and the idea that some of us may live to be 1000).

NOTE: the videos below are NOT pointing to my websites.