How much is your time worth? What are you paying yourself for every hour you work?  Today over 75% of those retiring have only social security to depend on.  The retirement lifestyle this creates is not one filled with the dreams from your youth.  It is one that lacks the funds for travels you thought you would have when your 9 to 5 is complete.

Making bi-weekly payments to yourself, automatically, is the best way to get ahead for your future.  If you pull money out before you get your paycheck in hand, it will appear as if it was never there. In a sense you are tricking yourself into savings! Starting small is the key.  Take $25.00 from each paycheck and have it automatically deposited into your savings account. After a couple months add another $25.00 to total $50.00 a paycheck into savings.  The goal within a year is to be saving 10% of your pay. This is not calculating the 401K’s or retirement funds that many employers automatically pull out of paychecks.  If you do not have a retirement plan with your employer start small and put $25.00 into an IRA, Mutual Fund, or another automatic interest earning fund for retirement. You can get help from your employer or bank on how to make sure this money comes out of your check before taxes.

Once your savings reaches the minimum for a higher yielding CD pull the available funds and place those into a CD earning 2.5 to 5 percent.  Let it sit for the 12-month CD term and then add your annual saving for the next year and roll it over for another 12 months CD.  While this money is earning within the CD you are still automatically putting 10% into your savings account and then at the end of each year adding it to the CD sum. Continue this plan annually and watch your funds grow!

By automatically pulling funds from your paychecks you are guaranteeing a financially rich future. Dream on and Dream Big!  Begin with the dream of what you want your retirement to look like. Write these ideas and hopes in a journal; now begin to automatically save for this future. When you feel frustrated or unmotivated remind yourself of the life being created for the near future. Live well now, within your means, and save to paint the canvas you want in your future! We are the artists of our lives, live it expressively.

Today’s post was brought to you by Danell Lynn, M. Ed.

I’m on my way to Chicago for the Financial Blogger Conference, 2011. I’ve got a jam packed weekend ahead of me, between a service project, the conference itself and even a party, hosted by THE MAN himself, Ramit Sethi of Iwillteachyoutoberich.

I’ll be learning a lot about blogging, monetization, and meeting up with hundreds of like-minded personal finance bloggers to talk about money, investing, saving, budgeting… you name it.

If any of you live in Chicago and want to meet up for dinner, a drink, whatever, hit me up. For those not anywhere near Chicago — no worries, I’m not that interesting.

In the meantime I’ll be taking lots of notes and anything I learn/talk about that would be relevant or beneficial for all of you I’ll definitely be sharing. Something to look forward to right? Have a great weekend everyone and keep on building wealth!

Everyone wants to know what the next hot stock will be. What they all fail to realize is that investing isn’t about picking the right stocks at the right time. Investing isn’t sexy like those jerks on Wall Street portray it — in fact if you want to lose lots of money very quickly you have two choices: go to Las Vegas or invest in the “hot stocks” on the street.

The vast majority of my investment portfolio is tied up in mutual funds. I have, at most, 5% of my investments tied up in individual stocks. Why? Because picking stocks is risky and (if you’re going to do it the right way) requires a significant time investment. I prefer to use my time for projects that are guaranteed to provide me with a return (monetarily or otherwise), not those that are almost guaranteed to lose me money!

How can Mutual Funds help you?

“A mutual fund is a professionally managed type of collective investment that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.^[1]“

The Wikipedia definition is a great way to describe what a mutual fund is, but its definition isn’t really important. What is important is that you know how to make mutual funds work for you. After all most of us could care less what a mutual fund is. We only care about how they can help us build wealth.

Here’s the bottom line: Investing in mutual funds will help you build wealth and become financially independent.

How do I get started investing in Mutual Funds?

You’ve got two choices when it comes to investing in mutual funds. Manage them yourself or have a “professional” do it.

Either of these choices is better than doing nothing at all (or leaving your money in a savings account and calling it an investment — high yield or not it’s stupid if you’re younger than 40). My advice? Manage it yourself. It’s easy and will require a few hours a year of your time at most. If you are too nervous to do it yourself then find yourself a financial adviser. If you’re military (or inherited your membership from someone who is) you could also call USAA for free financial advice. If you’re comfortable with managing it yourself read on.

Here’s what you do to start investing in mutual funds:

1. Choose a fund with Vanguard or T Rowe Price (choose an index or target fund).
2. Set up automatic investing (take it right out of your paycheck if possible).
3. Watch your money grow (but don’t check your balances too often).

The Bottom Line

Putting your money to work for you is how the poor get rich and the rich keep getting richer. Most of us don’t have the time or dedication to spend hours every single week (or month for that matter) researching stocks, transferring money to investments or even paying bills. The bottom line is that you need to invest, you should invest in mutual funds and you need to automate your investing.

Do this and you’ll really start to build wealth. Keep it up and you’ll make it into the Million Dollar Club in no time.