Sample English Paper on Cause and Effect Essay: Being Rich in the 20s Age and Being Rich in the 50s Age

Cause and Effect Essay: Being Rich in the 20s Age and Being Rich in the 50s Age

During their 20s, there are certain smart things that individuals need to engage in to be rich. Additionally, at the age of 50s, most people start seeing the possibility of gaining financial independence. Nevertheless, there are things that are also likely to contribute to achieving this financial objective. Being rich in the age of 20s and being rich in the age of 50s is a desired financial situation that is caused by, learning about effective money management principles, having a successful saving plan, and investing the saved finances in projects that are worthy of higher value. Being rich is thus a goal for everyone in these two age groups but the goal can only be achieved by following the things mentioned above.

Firstly, learning the effective principles of managing money results to persons in the ages of 20s and 50s being rich. 20-year-olds are young, full of energy and have many opportunities to utilize to get rich. However, without proper money management they cannot make it in earning and multiplying their wealth. Thus, learning about money management will make 20-year-olds to become rich more easily and early in their lives. The learning entails finding out the best way to utilize their resources to achieve their ambitious financial goals. They also need to learn what they are already doing wrong while making financial decisions and choices. They can learn through books and constantly researching the market. For instance, there are wide ranges of books that contain a lot of financial advice and information for the young people. Additionally, they can seek to find out what is going on in the markets. For example, find about fees associated with certain credit cards and bank accounts charges as well as whether there are better options in the market.

 In learning proper money management, 50 year olds need to evaluate their prior financial decisions to know where they need to improve. Based on the history of their spending, they will reassess the amount of money they will spend in retirement. This will then learn the appropriate steps they will need to take to earn money and save enough. They will calculate the cash they will spend in retirement that includes everything like insurance, medical and food costs. After that, they will take away the government pensions and company pensions if any are available. Being wiser also involves finding out how much fees they pay for investment advice since most of it is usually charged. This is because, at this age, most people are likely to learn by getting financial advice from experts in financial management. In this case, they should request that all fees be spelt out so that they can evaluate whether the price of the advice is worth. Finally, 50-year-olds need to learn how to take care of pending financial obligations like paying for their children without hurting themselves financially.

Secondly, developing a successful saving plan when individuals are in their 20s and 50s after they realize the best way to manage their money will contribute greatly to being rich. In the first step, 20-year-olds need to master the rule of spending less than their earnings. This involves creating a financial plan and developing the right habits that encourage saving early in life. This is because, the earlier the habits start for young people, the quicker the young person gets richer. Developing this habit may be challenging thus, young people should get a mentor who has already attained financial success. A mentor has been in similar situations before and will give the appropriate advice on savings plans.  Spending less also involves maximizing the value of what one’s money can get. An evaluation of every purchase made is essential to make sure that the money spent on an item is worth its value. Avoiding to waste money spending on unnecessary items automatically helps in saving. This implies that it is financially acceptable if, at the end of a certain duration, a person has no savings but is in possession of assets of great value and has no increase in debts. The habit of saving pushes a person to look for other means to increase their incomes to cover the superficial effect of the deficit left after saving the surpluses of the current income.

Sticking to a saving plan for 50-year-olds is also very important. Many things can be done to increase savings at the age of 50. For instance, they can make sure that their children graduate at the right time to avoid heavy burdens just before retirement. They should avoid withdrawing their pension contributions to cover other costs in their life since it will reduce their amount they will receive in retirement. Any extra income earned like bonuses and pay raises at this age should be saved instead of incurring unnecessary expenditures like buying a new house. Another form of increasing savings for 50-year-olds is increasing the amount of contributions for retirement. This may be achieved by making more annual contributions than the set limits. In essence, increasing these contributions implies 50-year-olds have to cut back on excessive spending to get adequate surplus for the additional contributions. Downsizing will also go a long way in saving a lot of money. 50-year-olds homeowners should consider the idea of moving to smaller homes since their children are grown ups living away from them, and the value of their homes may be declining. This will save a lot of money in terms of taxes, utility costs and insurance. The saved up costs are then consolidated with other savings and eventually make 50-year-olds wealthy.

Thirdly, investment is a very important aspect that contributes to richness by increasing wealth and growing the returns of invested money. Both 20 and 50-year-olds have to invest more in projects that will bring returns in the future. Young people should invest in investments that to guarantee themselves huge returns in the future. Firstly, they need to invest in themselves by spending more freely in their education to acquire better credentials and skills. This will enable them to get better positions and jobs with higher earnings in the future. The savings made should be put into worthy and secured investments that are not easily accessible for liquidation even in times of emergency. The investments should generate more cash flows than those initially invested. An evaluation of each of the investments to be undertaken is important to make sure that only those projects with high returns are selected. Other factors to consider while investing include the time it will take to generate positive cash flows; the cost of debt that may be obtained to finance such an investment should be less that the rate of return, other projects that compete with the projects in terms of returns. The financial growth attained during investment will then be utilized in growing more wealth. Profits obtained from business investments should not be spent without proper planning. Instead, a given percent or the entire profits may be ploughed back into the business. Investing should also go in hand with avoiding debt traps. Most students have students loans that ought to be paid as quickly as possible starting with those with high-interest rates. These kinds of debts may interfere with other financial goals later in life.

 At the 50s, individuals can follow the same procedures as the young people to find out and evaluate the kind of investments to take. Besides, owning rental property is one of the sound investments 50-year-olds can make. This may be more appropriate because it does not require a lot of work to manage it. They only need property in areas with a probability of strong population growth and low rates of employment, which spur the demand for rentals.

Being rich in the 20s and being rich in the 50s is caused by learning proper principles of money management, coming up with good saving plans and investing in projects that result to more wealth. Without these three factors, individuals in these two age brackets are likely to miss many opportunities that will guarantee financial success that ensure they become rich. However, proper application of these factors raises the chances of being rich in the 20s and 50s.