The Millionaire Learning Curve

Little Lessons on Your Path to Becoming a Millionaire

Lesson 2: You Need A Budget

What is a Budget

A budget is an easy way to help you track your money. It has three simple components: Spending, saving, and

investing.

Ours Looks Like This:

Here is the Break Down

Spending: 75%

Saving: 15%

Investing: 10%

Spending

Track your spending. It is

easy to get caught spending too

much money on things you do not

need.

Things Add up

Your Fool-Proof Spending Plan

1. Identify the things you MUST spend money on.

2. Pick two things that you LOVE to spend money on

3. Everything else is negotiable

4. Try your best to get your spending to 75% of your income

Pick the Bills You Don’t NEED

Rent

Phone

Groceries

Lunch

Insurance

Cable

Student Loans

Clothes

Saving

Saving money is an essential part of

your wealth journey. It allows you to prepare for all the great things that will happen in

the future.

What Are You Saving For?

Your Fool-Proof Saving Plan

1. Build an Emergency Fund that is equal to 6-9 months of your expenses

2. Identify your #1 savings goal

3. Set up an automated plan

4. Choose to start NOW!

Investing

Your money cannot grow on it’s own. And if

you want to build wealth your money

must grow.

What Do You Want to Invest in?

Stock

the capital raised by a business or corporation through the issue and

subscription of shares.

Bond

A debt investment in which an investor loans money to an entity (corporate or

governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are

used by companies, municipalities, states and U.S. and foreign governments

to finance a variety of projects and activities.

Mutual Fund

An investment vehicle that is made up of a pool of funds collected from many

investors for the purpose of investing in securities such

as stocks, bonds, money market instruments and

similar assets.

Your Fool-Proof Investing Plan

1. Identify an investment vehicle like a 401K or a Roth IRA

2. If you can invest through your employer great! If not, choose an online brokerage firm

3. Keep it simple by choosing a mutual fund as your first investment. It provides instant diversification

4. Be consistent and you will see your money begin to grow.

Summary

Having a budget is an essential part of building wealth. A successful budget will focus on 3 things. Your spending plan

focuses on maintaining your life right now. The savings plan is to help you consider your more immediate future. Finally, your investing plan is meant to help you grow

your wealth for the long term. This is meant to be an introduction to budgeting to

help you understand what it takes to be successful. Get more step-by-step

guidance in the next lesson.

Create Your Budget

Learn how to create a winning budget by following our step-by-step strategy in Lesson 3