Imagine the things you would be able to do that you previously couldn’t be able to. Once you imagine yourself there, you start desiring it. If the desire is strong enough, it can even lead you to debt as you seek to fulfill your desire.
Before investing, take time to do some homework. Educate yourself on the various investment options and listen to expert advice. This means that the extra money you have is better off increasing in value as quickly as possible. This is why experienced investors calculate the Required Rate of Return to ascertain the profitability of an investment. Whatever the money can buy now, may be too expensive later.
And in case you didn’t know it, the banks you save with, invest the money so they can pay you interest from what they earn. The advise to save some money is widespread and that’s not a bad thing. Do not fall into the trap of wanting more now and even more later, without having a consistent source of income to support it. That you need to make room for fun activities. Be firm with yourself and remember that it’s only a matter of time. Do not be distracted by your inner critic who may tell you that you need a life. Good debt gives you something that appreciates in value.
The home you bought will be of higher value by the time the debt is fully paid. Living below your means will give you the opportunity to earn some money in the form of avoided expenses. If for example you could buy a $400 TV but decided on a cheaper brand going for $350, you’ll have saved $50.
You see, marketers and advertisers understand that people buy emotionally, not logically. They may not have the money to spend, but since they want the experience, they go ahead and make an unwise decision. As you will learn in the next step, these choices are very tough for most people.
The first four steps have dealt with the preparations. For our example of $200 more, imagine yourself holding that money in your hands.