3 Secrets to Starting a Wealth Building Program-You Can Do It! By Fern LaRocca At Isnare.com Ezine Articles

Many people are overwhelmed with all the aspects involved in creating wealth. Here are 3 secret starting points that most licensed Certified Financial Planners use with their clients. They are the basis of a good financial foundation. Many investment and retirement plans have gone awry because these steps weren't in place. By implementing these three you will have a good foundation from which to build an investment program.

1) Cash Reserves and Credit. A minimum of 3 months gross salary should be in an emergency cash account. Use this account for sudden large expenditures like the car breaking down. If you have a lot of debt, I would increase that to a minimum of 6 months gross salary or more.

Obviously having good credit is a plus since most investors will leverage an appreciating asset to create more wealth. That can't happen without a good credit score. A credit score of 730 seems to be the acceptable average good score.

2) Estate Plan. You need the minimum of a will, durable power of attorney for financial care and medical care. Why should you do this now and not wait till you are older? Because without a good estate plan a lot of your wealth can be erased during illness, disability, or death. Don't let all that you accumulate go to the waste just because you never made an estate plan.

Estate plans now are more than just a bunch of legal documents. No one wants to think of sickness, old age, and death, yet all of us will experience that at some point, and the most important element of a person's legacy is not money but passing along values and life lessons.

More people are using ethical wills not just to distribute assets but to also put their values and beliefs on paper. Even if you are not the best writer, you can find outlines and examples on the web to get you started on what memories, beliefs, values, or life lessons you would like to leave behind.

3) Risk Management. We all face risks while we are increasing our net worth and we can eliminate or lessen some of the risks through insurance. In other areas we can self-insure. Don't let commission brokers talk you into the wrong kind and the wrong amount of insurance. Understand the risk, what you can afford, and what kind you need. Your future wealth depends on it.

I had a good friend who was a single mom let her desire for a home override getting these basics. When her son fell and broke his arm, she didn't have health insurance so she had to pay out of pocket. She also didn't have cash reserves so she had to put the expense on a credit card. Then she had to quit making payments on the house she bought to make payments on the credit cards. In other words, she didn't have a good foundation to start investing in real estate and her whole financial situation deteriorated rapidly.

Don't let your desire for an investment plan keep you from having these basics. Without cash reserves, a good credit score, an estate plan and insurance, your probability of success in an investment program is limited. You can do it.

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