It's time to set your goals for 2008 and map out your financial strategy for the year to come.
Part of that strategy should be to find ways to increase your wealth. This is important because it allows you to spend your time the way you choose, doing the things you enjoy more than listening to other people tell you what they want you to do.
You can take a number of steps that will have a large impact. Here are five that should be on your list:
Start a part-time business
: If you really want to build wealth, one of the first things to consider is starting your own business.
If you have been thinking about starting a business but have always found a reason not to, the truth is that there will never be a perfect time to begin.
This shouldn't stop you; there is no way that you are going to build that business you have always dreamed about if you never start.
There is no reason that you have to quit your current job to do this. Begin working on it in your spare time. This will give you an opportunity to develop a plan and work through some of the issues that are bound to surface before it becomes your only source of income.
Once the business has become more established and is making money, you can decide if it is worthwhile to pursue it full time. This may not increase your wealth this year; in fact it may take several years to establish your new company. But if you're successful it will eventually become an alternative source of income.
In addition to the extra money that you earn, having your own business will also give you some great tax write-offs.
: Many people believe that once they finish college, they are done with their education. If you want to improve your chances of getting promotions and raises, however, you still have plenty of studying to do. Make sure that you take steps this year to improve your education and skill sets.
Again, doing this doesn't mean that you have to quit your job. Talk with your boss or a mentor to determine the type of seminars or classes you can take to improve your skills to make you more valuable to your company.
Many larger companies will actually pay for, or at least subsidize, your education, so check with your personnel office to see what type of support is available.
A growing number of options are available for acquiring the skills you want online, which is much easier to do while working than actually attending classes.
Contribute to your retirement plan
: If you want to retire wealthy, making money isn't enough; you also need to put some of it aside, and you need to start this year.
Saving for retirement is one of those things that we all know we should do, but many of us don't because it doesn't seem as important as many more pressing financial issues. This is a huge mistake. A 2007
study by the Employment Benefit Research Institute indicates that nearly half of all adults saving for retirement have less than $25,000 set aside.
If your company offers a 401(k) match and you fail to make contributions, you are reducing your wealth by throwing away
free money. So be sure to sign up to place at least the amount up to the company match in your 401(k) plan this year.
You can still make contributions to an IRA for 2007 through April 15, 2008.
Keep your car
: It's not often that you can increase your wealth by thousands of dollars by doing nothing, but that is exactly what you will accomplish by not getting a new car this year. Instead, use the car you're currently driving for another year.
One of the best financial moves you can make is coming to the decision that a car is nothing more than a way to get you around. You purchase it for reliability and low cost, not to keep up with the Joneses.
It's difficult to build wealth when you are purchasing a depreciating asset every few years and then replacing it with another depreciating asset. Cars are meant to last 10 years or more and you should get the most out of them.
: Making your finances complicated, especially when you're beginning to build wealth, will often do more harm than good. In an attempt to increase your wealth, you don't want to make more work for yourself than is necessary.
Many people believe they will need to spend hours searching for the best stocks and other investments, but the truth is that you want to try to automate as much of it as possible and keep it all as simple as possible.
Rather than picking a huge number of investments and trying to keep track of them all, concentrate on the basics. Contribute to retirement plans and if you have more money to invest after that, place it in low-fee index funds. Make your deposits monthly and automatic.
Once you have grown your wealth into six figures, you can then begin to spend a bit more time on finding the best places to put this wealth to work.
As you look at your finances for the past year and begin making plans for 2008, make sure to include these wealth-building strategies to make this year a financial success for you and your family.
Jeffrey Strain has been a free-lance personal-finance writer for 10 years, helping people save money and get their finances in order. He currently owns and runs SavingAdvice.com.