Building Your Nest Egg-The Beginning

This is the final installment of ''7 Easy Steps to Accumulating Wealth.''

To summarize the previous steps, we've learned about the importance of creating a budget to understand where your money is being spent; saving money on your car maintenance; how to grocery shop wisely; the management of credit cards and their proper use; understanding health insurance and how to prepare for its future decline; and understanding your household overhead (the cost to run and operate your lifestyle).

In this installment, we will discuss building your nest egg. According to Wikipedia, ''A nest egg is an idiom referring to accumulated wealth, generally liquid investments, earmarked for some future purpose. The term is used most commonly to refer to retirement savings. The imagery invoked is that of a mother bird caring for a precious, irreplaceable object, which may often be delicate, and in a precarious position.''

The first step to building your nest egg is to begin saving early in life and to save often. Saving money is very difficult for many people, especially when they are making minimum wage. This is why creating a budget and understanding your household overhead will help. You might be spending money on extraneous, or ''fluff,'' items that you really don't need. For example, you might want the $4.89 café latte, but you do not need the $4.89 café latte. If you order this special drink four times a week, you will be spending $19.56 weekly, which amounts to $78.24 monthly, or $938.88 per year. That's a lot of money you could be saving and investing.

The second step is to learn the language of the financial world. This language can be picked up from many sources, such as books, CDs, the Internet, your local bank, and financial companies such as Fidelity, Charles Schwab, Vanguard, etc.

The third step is automatic saving. Many companies offer automatic withdrawal from your paycheck to your source of savings. You can have your employer withdraw money to your savings account, money market account, retirement funds, etc. This is one of the easiest ways to save money. You don't even think about it; it happens for you. If your employer offers retirement vehicles such as pension plans or 401(k)s, you should definitely take advantage of these saving vehicles too--especially if your employer contributes a percentage of your monthly savings.

If you do not have an automatic savings plan through work, start an automatic savings plan on your own. Begin by living on 10 percent less from your paycheck, every paycheck. If you net (take-home pay) $1,000.00 per month, a 10 percent savings will be $100.00. Over a year, you will have saved $1200.00 plus interest.. If you can only manage to save $50.00 per month, that's OK too. Just start saving.

The fourth step is to learn what type of investor you are. Are you a risk taker? Are you conservative? Would you rather have security? You have to take into consideration your family, your job security, your age, your health, and your significant other. Many financial companies offer an easy test to evaluate the type of investor you are. Obviously if you are older, you do not want to risk any of your money.

There are three investment classes: equities (stocks), fixed-income investments (bonds), and traditional savings such as cash and money market accounts. Deciding where you save your money is called ''asset allocation.'' How you allocate your assets (money) depends on your age and the type of investor you are, as well as your current and future needs.

To summarize, start saving early, and save often. Educate yourself about the language of the financial world. Research financial companies on the Internet. Visit a financial company, and talk with one of its representatives. Create an automatic withdrawal from your paycheck to your savings. Start learning to live on less now, and in the future you will have more.

Keep in mind the rules followed by money mogul Warren Buffet:

Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.

Here's to a life of health, wealth, and happiness!

Dr. Michael J. Kaye has been a practicing Chiropractor over the last 18 years. He holds a post-graduate degree in Rehabilitation. His practice focuses on treatment for the chronic and post-surgical patient. He has published articles on post-surgical knee rehabilitation; and chronic myofascial pain syndrome. He has developed a web site www.frompaintopersonalgain.com devoted to health, wealth and happiness. His coaching site is www.coachinggps.com Contact the author, Michael Kaye , at mijokye@comcast.net