Lynnette Khalfani-Cox is known to many as "The Money Coach." In 2003 she was a financial reporter for CNBC who was often interviewed on programs like The Oprah Winfrey Show, CNN and Good Morning America. She also wrote financial advice pieces for publications like The Wall Street Journal, Black Enterprise and Essence magazines. But, even though Lynnette had the financial savvy many of us lack, plus a six-figure salary to match, she was deeply in debt herself... to the tune of over $100,000.
Wanting to be debt-free, Lynnette was determined to take the tough steps necessary to dig herself out. It took three years, but she did it. Her book, Zero Debt shares how she did it and provides sound financial strategies to thousands like her who also want to live debt-free.
Lynnette identifies Seven Strategies for Building Wealth. With the goal of helping others achieve their first million, the first letter of each of her seven tips cleverly spells the word "million!"
Make a personal prosperity plan - Written goals are crucial to your success. Lynnette encourages SMART goals. SMART stands for specific, measurable, action-oriented, realistic and time-bound. She also suggests including at least one or two "wants", in addition to your "needs", into your plan. Including at least one "want" per month will help keep you motivated and encourage you to stick to your plan.
Invest first, last and always in yourself - To become prosperous for the long-term you must constantly update your skill set. Depending on your personal situation, consider getting that long-postponed degree, earning a business certification or attending an educational industry conference. You might also take a class that teaches you a new skill in order to help you generate a second income.
Live like a lender, not like a borrower - When you live like a lender, you always collect interest on your savings and investments. If you live instead like a borrower, you will always be at someone's mercy and paying interest instead of collecting it.
Leverage the power of property - Although home ownership may not be for everyone - and in today's economy, renting can often make good financial sense (see page 9) - in most cases owning a home, and the mortgage that comes with it, is a good investment for the long term. And, if you are interested in managing a rental property or two, becoming a landlord can also be a way to build wealth.
Increase your fortune with proven methods, not shortcuts - Lynnette is a big believer in tried and true investment methods. She says over the long-term some mutual funds have proven to be a safe, smart way to invest, followed by stocks and bonds. Avoid complicated deals, "long shots" and get-rich-quick schemes at all costs. Hiring a respected professional investment advisor is also a good idea. Be sure to check references. Regardless of how you choose to invest, keep in mind there is some risk involved and your investment could lose value.
Overcome setbacks and minimize risks to your finances - Lynnette also suggests having at least three months savings as a financial cushion in case of an emergency. And make insurance a big priority. Be sure you have enough life insurance (five- to 10-times your annual salary), along with health and disability insurance coverage. If you are strictly relying on the insurance provided by your employer, it may not be enough, so do a thorough assessment to be certain you and your family are protected.
Never forget the next generation - Lynette encourages people to remember that building wealth is not just for you but for your family members. What you do today can have a huge impact on your family many years from now.