Are there steps we may take to boost our long-term personal wealth even as we are facing difficulties?

When we prepared ourselves to climb the Everest Base Camp (EBC), it took us months of preparation with consistent training. When the N-day arrived, we managed to climb and conquer EBC in two weeks’ time. The key to success was proper planning and discipline. The same key ingredients go with building long-term personal wealth.

It can be challenging to keep up to our long-term wealth planning during difficult times. Most of the difficult times, the long-term wealth may be deviated or compensated from our original plan. Here are the steps we may take to boost our long-term personal wealth:

  1. Layout and review your financial plan

We have known the quote, ‘if we failed to plan; we plan to fail’. Revisit our financial plan during major event is a must instead of living day to day and unsure about the outlook of our financial situation. Spend some time by forecasting the in and out of the money for next few months to a year will give a clearer picture of our own financial standing.  

  • Pay yourself first

No matter how difficult the time it is, we need to stick to the discipline of paying ourselves first. It means that we should stick to our long-term wealth plan. If the circumstance didn’t allow, then stick to the allowable minimum contribution, even a 1 percent. Once the financial situation improves, then there’s catch-up to do. Usually the catch-up effort would be a lot more than then original plan. Let’s say we stopped for two months in between training for EBC and continue again. The momentum would never be the same. The shorter the time we were to be left to our objectives, the more effort we need to put it in to achieve it.

During difficult times, our government gave the choices to reduce the EPF contribution from employee portion from 11% to 7%. The reduction of few percentage could be managed by reducing own spending. Unless special circumstance, we suggest sticking to 11 percent to fund for long-term personal wealth.

  • Manage the debts

The priorities are always paying off highest interest of any debts first. Find out each liability up-to-date interest rate. Some daily rest interest liabilities may be taken advantage with placing the emergency funds. Some low interest rate liabilities also may be planned by using higher interest investment to offset the liabilities.

  • Live more frugally

There are many ways to live frugally during difficult times. First we can cut down the unnecessary expenses and delay the gratification of buying. Question we can ask ourselves on the things we want to buy, can this wait? Second, we may review the needs of non-income generating asset, or we do refer it as personal use asset. Personal use asset could be car, do we really need big car during difficult time? Third, we may review our monthly fixed commitment, for example, life insurance premium. Are we getting the right plan and coverage with the lowest premium? Lastly, we can plan and shop wisely with the vast discount and offer nowadays. Remember to shop only within the budget plan as there’s still always discount all year round.

  • Continue to invest

Most of the pessimistic economy times could be a good time to invest, or a bad time to withdraw of investment. Although market timing does not affect too much into a long-term investment return, it does affect the short time frame of investment. By withdrawing the investment may reduce the future value of the investment drastically. With an efficient investment portfolio allocation that targeted the intended financial objectives may allow to boost more of the personal long-term wealth. Some tried to change the investment strategy wrongly, it’s like changing traffic lane when we drive during traffic jam.

  • Invest in Ourselves

Another type of investment is investing in ourselves. Constant learning is the key of life. By investing ourselves in additional skills and education may boost our ability to earn more income. Though we may need to pay extra for the fees to acquire skills and education, it may be a one-time off deal but a life long additional income.

  • Venture into entrepreneurship

We can plan for more venture during difficult time. Venturing into new business may bring additional income and eventually boost our long-term personal wealth. Nowadays, there’s a lot of opportunity that required none or little capital for to start a business. Getting other job such as freelancing could be a baby step of entrepreneurship.

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