10 Essential Steps for Wealth
A simple guide to understanding your wealth, strengthening your financial foundation, and building your future.
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Step 1: Know Your Numbers
Print out 2 months of bank statements for ALL your financial accounts (W2 pay checks, Checking, Savings, Investments, Credit Cards, Loans, etc.)
Step 2: Download sample sheet: Money Chart-Tracking
Income: You will want to list ALL sources of income (job, family, refunds, gifts, etc).
Essentials: Then you will prioritize your essentials (home/rent, utilities, home/renter's insurance, maintenance, phone, health [health insurance, dentist, doctors, prescriptions, gym fees, grooming], groceries, transportation [car payment, car insurance, gas, maintenance, or uber fees], bank fees, savings and investments.
Loans: Credit cards [on a side note, write down the APR % rate you are paying, amount owe, the monthly payment and date it's due every month), Student loans, car payments, etc and if you owe any person money.
Other expenses: This may include subscriptions, annual fees and you can place them under your essentials or non-essentials category to track. If you have a side hustle, we recommend doing a separate excel sheet for this and add your net profit into your main income category.
The Money Chart-Tracking: Add in your numbers for January thru December and look at your monthly net profit. By making line items for each of these things, you can start to understand if you have anything that seems out of alignment and you can start to understand where you can make some shifts.
Note: There are some APPS out there that can help you, but they take a while to set up. Every Dollar APP from Dave Ramsey / Rocket Money APP.
Step 3: Net Worth Check-In
Make a list of all your assets that have value (Home/Real Estate, Car, Specialty Toys/Collectibles, Investments accounts [401k, IRA, Roth, Mutual Funds, Savings Accounts], Coins, Silver/Gold, Business(es), etc and write down their current value.
Then all your debts and anything you owe to anyone.
Do the math and add the value of all your assets, minus all your debts for your net worth.
Step 4: Sit Yourself Down & Review Your Numbers
Have a real conversation with yourself! Sit down, really look at your numbers and think about what you value. You may even want to write down these values and what they mean to you financially... are you spending money in alignment with these values?
When you look at what you are spending money on, can you see what reality is saying about what you value? Is it time with friends, buying dinner or drinks; Is it your toys, cars, hobbies and are these hobbies making money for you or draining your pockets?
Did you find subscriptions you are not using or don't really care about?
Step 5: Kick-Start Your Wealth
Now that you have some idea of what your monthly net profit is and where your numbers are you can start to make the shifts. Here are some suggestions:
Delete any re-occurring fees, subscriptions, or activities that are not aligned with your values.
Re-allocate those funds into these buckets:
• Paying down high APR credit cards
• Starting a High-Yield Savings Account (Find an online bank giving you 3-5% on your investments). You’ll want to get this up to $2,000-$3,000 as a baseline. Ultimately, you'll want 3-6 months of living expenses that you calculated above with your Money Chart-Tracking. We recommend www.CIT.com.
• Open an investment account and invest in a regular INDEX fund, a Individual 401k and a ROTH account. Add $25 to $100 in each. You can do research on different popular companies that have financial planners to help with this, but if you'd like this to be more self-directed, then www.eTrade.com is a great option and you can just call the 800 number to have someone help if needed. Link your checking account to the main account so you can easily transfer money back and forth.
Step 6: Automate it!
If you have credit cards with a balance or loans, make sure they have their auto pay with minimum balance due and mark on your calendar when these payments will come so you are prepared for them and have enough in your bank account.
Focus on getting your High Yield Savings account to $2000-$3000 first and add an automatic transfer from your checking account to the HYS account first. This is your emergency fund.
If you have a W2 job, contact your Human Resource (HR) department and ask them the following: Do they have a 401K plan for employees? If yes, ask if they have a matching program and what % they will match? Sign up and have them distribute 1-10% of your income to your 401K account. When you are ready, make sure you are putting 2-5% of your regular income into your ROTH account.
If you have a 1099 or income that varies every month, then look at your income and make a decision about how much you will put into your 401k and ROTH each month and make this an automatic payment from your main checking account.... just like a subscription, but this money is going to make money while you sleep. Note: Automatic transfers into eTrade get placed in the account you desire, but then you will need to invest into stocks, dividend EFTs and mutual funds to build your 401K portfolio with this money. Check your eTrade account at least once a month to review things and know where your money is going. Learning about what to invest in is a process and we recommend it all goes into an index fund until you feel more confident about other types of funds.
Step 7: Time - Energy - Resources
Now that you have a clear picture of the flow of your money, you can start assessing how you are spending your time and energy. The next step is to find time to boost your skillsets and earn more money for your time or choose to spend time on a 2nd job until you reach a milestone in your financial journey. We are never really stuck. We just have to make a decision to make a shift and then start practicing this and keeping our promise to ourselves.
This could be a simple as cutting out Netflix or some other subscription for 6 months, or fixing out own coffee or lunch for most of the week and having one day be a treat day. We might have a friend or neighbor that needs a helping hand. I once put a note on Facebook asking if anyone needed help organizing and my friend had me help their dad go through a whole storage unit of boxes! I'm sure you can go on Chat GPT and put in your favorite things to do and your skillsets and ask it to come up with at least 10 side gigs with ad copy you can plug into Facebook Marketplace, Next Door, Craigslist in your neighborhood and get $15-$50/hour... and you can always book a call to help you brainstorm or get some marketing advice on how to start something.
You want to start leveraging your time with the amount of money you are making. Once you've started investing, these are the baseline of passive income buckets, but we recommend you join our membership so you can learn about other ways to create passive income buckets and choose a few that fit you, your skillsets, personality, goals and dreams.
Step 8: Enjoying the Journey
Part of this whole "Healthy Wealth Club" journey is that you build in a bit of fun! It’s really good to have a bucket list of things we want to experience, a travel destination, or a hobby we enjoy on a regular basis. Once you're tracking your money and know where you are spending your money and how much, you can start leveraging credit cards and other offers suggested by The Points Guy. You can find a credit card that gives you 1X-10X point on your everyday purchases, pay off these cards by-weekly, and start earning points for things you love to do (travel, purchases at your favorite stores, money back on your purchases, etc). The other way is to create an extra account on CIT.com (high yield savings account) or eTrade specifically for your bucket list (i.e. traveling, new car or toy, etc). These funds are for your play money. The idea is that you grow these accounts to be twice as much as what you want and when you reach that goal, reward yourself with your bucket list experience. Since you still have money in these accounts, you will be able to do something again even sooner and you won't have to start over from scratch.
Step 9: Keep it Simple and Organized
Let's do a little review of these stages
• Awareness of the flow of money > Exact knowledge of your money and net worth
• Some savings & investments > High Yield Savings (Emergency, Real Estate and monthly hobbies) and Investments working for tax strategies (IRS/401k), long-term retirement (ROTH), and fun (Travel/Experience Bucket)
• Current job / Side Hustle > Growing skillsets for higher paying job and leveraging time for other passive income opportunities
We recommend you have a binder that compiles current statements and notes of all your accounts, beneficiaries, your health directive, insurances and overview of your assets and net worth. We can help you put this together and guide you to prepare it all for an estate attorney to protect these assets in a trust.
Step 10: Take Time to Relax, Breath and Take Care of Your Health
All these efforts can stop on a dime if we push too hard! The universe has some interesting ways of telling us when we are doing too much. Getting a cold, the flu and sometimes an injury are signs that we can recover within a few days or a week. An accident can put us back physically and financially and on a rare occasion, we need to just lay down in a bed. Luckily, the passive income will still make money for us while we rest, but we encourage you to pace yourself. Some of these investments take time and we all need to have compassion for ourselves during the tough times of life. By being a member of Healthy Wealth Club, you will get a wonderful array of ways to keep your mind, body and soul healthy, mobile and adaptable while you grow your wealth. We are here as a community to support you and living your best life.
Also, take a moment to appreciate and recognize the other parts of life that bring you joy. Wealth is not always about money, but money can give you freedom. Wealth can also be your health, family, friends, accomplishments, knowledge, supporting your community and art.
Need help? Just book a consultation and we will help you where you are stuck :)
