Finance Tips: Make it a Wealthy New Year

Finance Tips: Make it a Wealthy New Year

Financial expert and author, Ruben Ruiz, has some tips for Latinos on how to increase your wealth in 2012. This is what your parent’s didn’t tell you. 
Ruiz says that net worth is made up of assets owned such as, a home, CD’s, stocks and bonds, 401k’s, savings, treasuries, a business with equity, among others.

“Net worth is a true picture of everybody’s wealth,” says Ruiz. “That’s what’s going to determine you becoming financially independent - the point that you have enough assets to live for the rest of your life without having to work. Everybody wants to get to that point.”
According to this year’s Pew Research study, the median wealth of a white family in 2009 was 18 times greater than the average Hispanic family. In other words, the average white family had $113,149 in net worth, compared to $6,325 for Hispanics.

These are Ruiz’ first steps to financial freedom:

1. Change your mindset from one of only spending to investing. Many Latinos were raised too conservative and without encouragement for entrepreneurship. Remember that you also have the freedom to invest. Don’t think: “At least I have a job, I don’t want to ask for anything more.” You have to go to the next level. Turn your income into net worth. You have to believe you believe you can do it.

2. Set different buckets or goals before you receive your paycheck in order to determine where your money is going. The average person will usually pay bills first and try and save whatever is left over, but admit it, that often leaves you with nothing left after you go shoe shopping. Work towards saving 20 percent of your paycheck, and already have written out where the other 80 percent is going (eg. 40 percent: living expenses, 10 percent unplanned celebrations, etc.).

3. The saying “The more you give, the more you receive” is accurate. Giving back actually causes you to build a bigger net worth and accumulate more wealth. The more money you give to charitable contributions, your subconscious says, “It’s okay, we’ll get more of that.”

4. Set aside one hour a week to create your financial road map so you know how much you are spending. You can’t get to your financial destination without that. A simple excel sheet can show you where everything goes.

5. You’re not going to do it if you are not taught it. Become more educated financially so you can pass on the wisdom to your next generation.

You can read more of Ruiz’ tips in his new book which will be on shelves by late January, My Own Money Blueprint.

- KRISTINA PUGA, NBC LATINO STAFF

Follow Kristina on Twitter at kristinapuga.