In this present economic climate, it is vital that you treat your personal finance like a business.
So what does a business have in common with you?
First and foremost, a business provides goods and services and in return generates income.
Secondly, in order to provide these goods and services a business incurs expenses.
Third, in order to expand and grow, a business must invest what ever cash is left over at the end of the week, month or year in it’s growth or borrow money for growth.
Treating Your Personal Finance Like A Business
Just like a business, you go to work to earn income in order to survive.
In order to provide for your basic necessities such as housing, food, transportation etc, you have to incur some expenses.
The difference between your income and your expenses is what is left over for investments.
Investing in income producing assets is the key to your personal financial well being and wealth creation.
You must change how you manage your finances in order to position yourself financially.
Steps On How To Be Secure Financially
- Create a budget and stick to it.
- Know your numbers, i.e, know your total assets, liabilities and networth.
- Increase your income.
- Decrease your expenses.
- Invest your positive cashflow in income producing assets.
- Never fall into the lifestyle expense creeps. Basically, because your income increases doesn’t justify over extending yourself.
These steps might seem simple however, it will require a complete paradigm shift in your thinking to pull this off.
These are the same steps I am applying in my journey to growing my wealth and financial independence.
By staying focused, disciplined and committed, you too can learn to treat your personal finance like a business.