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Personal Finance Wealth Creation

Think Of Money As A Tool

Most people don’t think of money as a tool.

To achieve any form of financial independence or freedom, you must change the way you think of money.

Money as we know it represents a mechanism for exchange and the financially savvy treat it as such.

Throughout history, money has come in different shapes and sizes.

There was a time when salt was used as money and today we use salt as a seasoning for food.

Why Money Should Be Treated Like A Tool

First we must define what a tool is.

Merriam Webster’s definition of money is, “something used in performing an operation”.

Money as a tool helps us in performing tasks which in this case, a medium of exchange.

So if you are in the market to purchase a new home, car etc, in order to accomplish this tasks, you need money.

Money is an idea and unfortunately, most people place too much emphasis on acquiring money.

The wealthy use money as a tool to enhance their lifestyle while the rest of the population chases money due to a lack of financial literacy.

The only way to be financially secure is to increase your value in the marketplace and money will find you.

You must change the way you view money if you intend to elevate your personal finance.

Treat Your Personal Finance Like A Business.

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Business Lifestyle Personal Development Personal Finance Success Tips Wealth Creation

Treat Your Personal Finance Like A Business

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.

The Main Reasons Why You Are Broke.

Think Of Money As A Tool.

How To Create Your First Budget.

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Lifestyle Personal Finance Wealth Creation

The Main Reasons Why You Are Broke

In this post, you will find out the main reasons why you are broke and how to turn things around.

We live in one of the most prosperous times in human history with technological advancements and information overload.

However, majority of the population are living paycheck to paycheck and are broke.

If you find yourself in this situation, don’t beat yourself up, because you are part of a vast majority of the population in the same predicament.

Here Are The Main Reasons Why You Are Broke

  • Lack of financial education.
  • Lack of discipline.
  • The pursuit of instant gratification.
  • Having a consumer mindset.
  • Adhering to old paradigms.
  • Trying to impress people.

Lack Of Financial Education

It’s unfortunate that most people lack financial education.

Financial education is not taught in schools and most families don’t invest the time and effort to educate themselves on financial matters.

This is one of the main reasons why you are broke.

Financial education or financial literacy is the bedrock for achieving financial security and freedom.

In order to stop the madness and get on the right track, you must invest your time and enough in educating yourself on everything financial.

From budgeting to investing, you must make a decision starting today to get financially savvy.

Read books on personal finance, do google searches on personal finance, and go on YouTube to search for topics on finance.

This should be your first steps on getting out of your financial situation.

Lack Of Discipline

The next reason why you are broke is due to lack of discipline.

In order to achieve financial security/freedom, you must be disciplined with you finances.

Most of us lack self discipline and as such struggle with our finances and remain broke.

Having discipline means you create a monthly spending plan or budget and stick to it.

You must resist temptation of impulse purchases and marketing tactics from retailers.

By creating and sticking to a budget, you will develop a great habit and stay disciplined with your finances.

The Pursuit Of Instant Gratification

Yes, this is a big one.

We are bombarded today by advertising and marketing messages on the latest products and services.

In addition, social media platforms are now the main source of the distraction and marketing strategies.

Due to the availability of easy credit, it’s very easy to purchase things due to impulse without giving a second thought.

We see the latest shoe, hand bag, smart phone etc, I feel we must have this item now.

If you do not want to stay broke, you must learn to delay gratification.

Having A Consumer Mindset

Having a consumer mindset also ties into pursuing instant gratification.

Most of us are consumers and because of this mindset, we are leveraging credit cards and other debt instruments to fund our lifestyles.

This is another reason why you are broke.

I am not implying that you shouldn’t buy things, however, every purchase you make should be planned.

As soon as you let go of your consumer mindset, you will see purchases differently and make smart decisions with your money.

Adhering To Old Paradigms

Adhering to old paradigms is another reason why you are broke.

Because everyone is in debt doesn’t mean you too should be in debt.

If everyone is jumping off a cliff without a parachute, does that mean you should do the same?

You must change your mindset and think differently when it comes to your finances.

Do not follow the crowd but do things differently.

There is a reason why the wealthy act poor and the middle-class and the poor act rich.

The wealthy have mastered the art of finance and that is why they are wealthy.

They invest their money in income producing assets while the rest of us invest our money in depreciating assets such as cars, boats, etc.

Change your paradigm and you will change your life.

Trying To Impress People

The truth of the matter is that at the end of the day, nobody cares how big your house is, how expensive your car is, how expensive your clothes are, etc.

Most people try to impress their friends and family by over extending themselves with big purchases.

You may fool people with your so called rich lifestyle, but this comes at a price to your finances.

There are cases of individuals earning 6 or 7 figures income but yet live paycheck to paycheck.

It call comes down to living beyond your means and investing in income producing assets.

If you can afford things, then by no means go ahead and purchase them.

Remember that all purchases you make must be planned without having an adverse impact on your finances.

The Road To Financial Freedom.

Categories
Lifestyle Personal Finance Wealth Creation

Cash Is King

Following the principle of “Cash is King,” you can change your life forever.

Life will be less stressful financially and you will be taking your first major step toward “financial security”.

“Cash is King” is an easy principle to understand and for some, however, it may be difficult to follow.

We live in a world of credit and we do not respect or understand the value of cash.

If you follow this simple principle of “Cash is King” you will start on the road to “financial peace of mind”.

Why Cash Is King

Here are two basic suggestions on how to follow the principle of “Cash is King”:

When you are paid make sure you allocate enough money to pay your rent/mortgage, utilities and any other fixed expenses you may have.

Any amount of cash that is left should be withdrawn from your checking account to be used for food, clothing, gifts, entertainment, gas, etc.

The best way for you to control this cash would be for you to create a budget.

Also, you can adopt the envelope system.

The envelope system entails labeling envelopes and allocating funds to each envelope representing an expense.

For example, you could label an envelope groceries and each paycheck, you allocate an amount of cash that you place in this envelope.


Now, remember that this cash is the only way you can spend. Once you have used all your cash there will be no spending until your next paycheck.

This is tough! No credit/debit cards? You must be kidding!

How will I ever get through to my next payday without using my credit/debit cards?

Stick with “Cash is King” and manage your money.

Start by finding the cheapest places to buy gas, run your errands more logically and take your morning coffee from home instead of buying that latte every day.

You will have to find new ways to manage your cash and the first few weeks will be the toughest.

You may even run out of cash before your next payday, however, you will stick to the principle “Cash is King” and eventually find “financial peace”.

After several weeks it will get easier to manage your cash and you will be surprised to find extra cash available before your next paycheck.

What will you do with that extra cash? Many say put the extra cash into a savings account or pay a little extra towards one of your debts.

The choice is yours to do whatever your heart desires.

By following this principle, you will be on your way to establishing a secure financial future.

The Road To Financial Freedom.

Treat Your Personal Finance Like A Business.

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Lifestyle Personal Finance Wealth Creation

The Road to Financial Freedom

The road to financial freedom is there for anyone willing to put in the effort.

Most people have 46 to 49 years of income-producing efforts and more if you plan to work into your “retirement” years.

During that time, we must complete our education or training, get a job or open a business, while meeting the many demands of life.

We have to provide for food and shelter, clothes and transportation, childcare expenses, college tuition, vacations, Christmas presents, insurance premiums, and more.

How is it that some people can retire at age 50 in spite of all this while others will never retire at all.

If you’re just starting out, you are nowhere near your peak earning power.

You might have to buy your first suits or business dresses for your new job.

You also want to enjoy life, go on vacations, buy or lease new cars, and rack up debt.

Here’s How-To Create Your Road To Financial Freedom

There are individuals who have figured out the road to financial freedom.

Here is how they have done this.

First they live within their means and save as much as possible.

Take advantage of all the tax shelters the government allows and if possible, save even more.

Invest in or start a part-time business, rental properties, or learn to increase their returns through smart investing.

Have adequate insurance against potential risks that could ruin them financially.

Use debt wisely as a tool to build wealth.

For example, they can leverage to build a real estate portfolio.

Take advantage of tax credits, government-guaranteed loans, or grants offered to small businessmen to fund multiple streams of income.

Don’t use debt to purchase depreciating assets.

They factor in taxes when planning their lifestyle and investments.

For a little over $3.00 a day, starting at age 22, you can amass a portfolio worth over $850,000 in an IRA.

The difference between the financially independent and the rest of us is that they can make investing a priority.

Most people complain they have no money left over and that they live from paycheck to paycheck.

There are stories of very low-income people who manage to put multiple children through college but also graduate school and leave millions to their favorite charity.

These people are special in the sense that they had a goal and stuck to it no matter what.

They worked hard, saved their money, and achieved what they set out to accomplish.

Anyone can achieve financial freedom.

You just have to be disciplined and have your priorities in order.

You must make a conscious decision to be an investor and not a consumer.

This is what it will take to get you on the road to financial freedom.

The road to financial freedom is yours for the taking.

Steps To Gaining Financial Freedom.

Cash Is King.

The Main Reasons Why You Are Broke.

How To Set Goals.

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Lifestyle Personal Finance Wealth Creation

Steps To Gaining Financial Freedom

In this post you will learn the steps to gaining financial freedom.

Have you ever wondered how to gain financial freedom so you never have to worry about money?

Are you spending more than you make and going deeper into debt? You can change this trend!

The first thing you need to know is that, if you are making financial planning decisions based on how much money is in your bank account right now, then you are being controlled by money.

This usually creates constant worries about money. You need to control money in order to gain financial freedom.

Luckily there are money management steps to gaining financial freedom.

However, most people are completely unaware that they exist.

This is not the type of financial planning involved in investments such as stocks and bonds.

Steps To Gaining Financial Freedom

1) Create a budget. A budget here is the amount of money it takes for the organization or household to function and to attain its goals.

This is also called the break-even point and shows the minimum amount of income required to stay afloat. This is the first step in effective cash flow management.

2) Find ways of increasing your income. Remember, you’re going after YOUR financial freedom.

3) Figure out your expenses and debt and write them down.

4) Find out how much of your income is actually available to spend. Most people forget that when the money comes in, some of it is already committed.

When you spend more than you brought in, the difference usually ends up on a credit card as debt.

When you are striving for financial independence, spending less than you make is critical.

5) Set aside regular amounts of cash from your income for the future – always pay yourself first and put the money in savings toward gaining financial freedom.

For substantial wealth building, a minimum of 10% is recommended.

6) Apply some of your money towards paying off past-due bills, debt, current bills.

Also, set aside funds for future large expenses that are difficult to pay when they come due. The key is to be consistent.

7) You must invest a portion of your money in income-producing assets.

Why is cash flow management important? Cash flow is your lifeblood. of a business. Life runs smoother when cash is available.

It takes personal discipline and commitment to achieve the goal of financial freedom.

When executed correctly and consistently, the end result is an abundance of cash, all bills paid, and plenty of money in reserves to finance your lifestyle.

Why you need a home based business.

The Road To Financial Freedom.

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Business Wealth Creation

Why You Need A Home Based Business

There is no disputing the fact why you need a home based business today.

The current global economic climate makes it very vital why you need a home based business.

The most risky position to be in is relying on one source of income such as a Job. Jobs are no longer secure today and employers have no loyalty to employees anymore.

The best thing you can do for yourself is to start a home-based business and here are some reasons why you should.

Tax Advantages

Did you know that the USA tax codes are designed to reward entrepreneurs?

This is a main advantage why you need a home based business.

Having a home based business allows you to legally take business deductions of which there are over 435 and counting.

The wealthy understand this and that is why they all have multiple businesses.

I am not a tax professional, therefore, please consult with your tax professional for more advise with regards how you can minimize your tax liabilities.

Multiple Sources of Income

This is another reason why you need a home based business.

Having multiple sources of income ensures that you are able to withstand any economic situations.

As you know, the economy goes through cycles and if you have only one source of income, then you are seriously disadvantaged when there are down turns in the economy.

Wealth Creation

Your main goal should be how to create, grow and maintain wealth.

Wealth is created by investing in income producing assets such as real estate, stocks, bonds, gold, silver, businesses, just to mention a few.

By investing in assets that appreciate over time and also using leverage, you can exponentially increase your wealth.

Create Your Ideal Lifestyle

The current trend right now is everyone wants to be an entrepreneur.

Unfortunately, most people go about this the wrong way.

Starting a business requires a great deal of commitment and resources.

Everyone’s situation is unique and the best way is to maintain your 9 to 5 job until the income from your home-based business replaces the income from your 9 to 5 job.

You will have the freedom to do whatever you choose to such as, traveling, live where ever you choose, have the resources to donate to charities and provide a better life for your family.

Creating and starting an online business.

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Advanced Wealth Planning Strategies.

Benefits Of Being An Affiliate Marketer.

10 Legit Ways of Making Money Online.

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Business Lifestyle Personal Finance Real Estate Investing Wealth Creation

Why The Rich Get Richer

It’s no secret “why the rich get richer” and the middle-class and others are struggling.

If you aspire to be rich, then here are 5 simple reasons why the rich get richer.

Pay Yourself First

This is the first principle that the rich abide by, they pay themselves first before anyone else.

We all work hard for our money but yet choose to pay others first.

The key to getting ahead and being fiscally fit is by building a massive capital reserve for emergencies, investments and fun.

The rich understand this basic concept and this is why the rich get richer.

By paying yourself first, you set aside resources for savings and investments.

These investments go to work for you generating more income and cash-flow.

The rich value their time and always look for ways to maximize their efforts.

We all have 24 hrs in a day and as such, we can not work the whole 24 hrs.

The rich look for opportunities to generate income even while they are sleeping.

The rich always have their money working for them and not them working for money.

By paying yourself first, you set yourself up to capitalize on opportunities.

Remember do what the rich do and pay yourself first.

Invest Their Money

The rich get richer by investing their money.

Investing your money is the key to growing your income, cash-flow, and networth.

The only way to be rich and wealthy is to invest your money in income producing assets.

Examples of such assets are real estate, stock market, businesses, gold, silver, and other precious metals just to mention a few.

If you want to be rich and wealthy, you must invest your money.

Build Businesses

The rich build businesses that generate multiple income streams.

The name of the game is cash-flow and the rich understand this and that is why they are constantly exploring opportunities to create more cash-flow.

As stated earlier, the rich and wealthy value their time while the middle-class and others exchange their time for money.

Having only one stream of income is the most risky form of existence.

As of my writing, we are currently experiencing the biggest health pandemic.

The effect of this could be felt globally with businesses shutting down or going bankrupt and employees laid off etc.

Conditions are so bad that the USA government had to bailout businesses and send stimulus checks to it’s citizens.

This is why you must not rely on one source of income.

So look into starting your own business or businesses because as a business owner, you get to enjoy all the tax benefits of owning a business.

Long-Term Mindset

This is another reason why the rich get richer.

They have a long-term mindset and are always planning for the future.

Every move they make is well calculated and they are never afraid to take risks.

The middle-class and others are always seeking instant gratification and never have long-term planning.

Yes, it is ok to indulge, however, the rich only indulge using the cash-flow from their investments.

The rest of the population indulges using their hard earned money.

To get ahead financially, you must have long term plans and only acquire income-producing assets and use these incomes to fund your lifestyle.

Build Networth

The rich get richer by focusing on building their networth.

The rich never focus solely on income but rather by growing their networth.

The only way to grow your net-worth is by investing in income producing assets which grow in value over time.

The key to building your net-worth is by having a personal financial statement and reviewing it on a consistent basis.

The financial statement has 4 sections:

  • Income
  • Expense
  • Assets
  • Liabilities

Income

This section lists your income sources, paycheck, dividends, business, real estate, etc.

Expense

List all your expenses, car payments, utilities, mortgage, students loans, etc.

Assets

This shows all your assets, remember assets produce income, therefore your house is not an asset unless it generates monthly income for you.

Liabilities

The liabilities section list what you owe such as, your mortgage loan, car loan, student loan, consumer loan, credit card debt etc.

Your net worth is calculated by subtracting the total of your liabilities from your total assets.

This is why the rich get richer.

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Lifestyle Wealth Creation

Advanced Wealth Planning Strategies

The key to advanced wealth planning strategies is by building a team of qualified advisors.

Your advisors can make or break you. Advancing your wealth cannot and should not be done alone. Most individuals make the mistake of doing everything themselves.

Doing everything yourself is fine but if you want to increase your wealth you will need advisors. Money is an emotional subject for many people.

Everyone goes through money problems (even the very wealthy), how you handle your money problems is all that counts.

The first thing to do is to hire a bookkeeper. In order to increase your wealth you must know what direction your money is flowing. Is your spending helping or hurting you?

Yes there are many people who balance their own checkbooks but you need an outside opinion. The amount of money you are making is irrelevant when it comes to hiring a bookkeeper.

Whether you are making 250,000 dollars a year or 25,000 dollars a year you should still have your own bookkeeper. A great bookkeeper will enable you navigate your spending patterns.

The next adviser you should have is your financial adviser. Hiring a good financial adviser is one of the best moves you can make. He or she can help you plan for retirement. Having a 401 K with your company is not enough, make sure to get a financial adviser.

Next is getting a tax professional. It really does not matter if you are self-employed, own your own business, or have a 9-5 job.

Getting a tax strategist is essential in helping you avoid tax pitfalls and help minimize your tax liabilities.

Be very careful when choosing your advisers. Don’t hire an adviser who makes money off of commissions.

You want an adviser who is fee-based, practices what they preach, and is very successful.

Your advisers will be instrumental in helping you set up advanced wealth planning strategies.

Finally, remember that no matter what life throws your way, “You Hold The Key To Your Success”.

Interested in starting your own home-based business? Check out this blog post on “mlm home based business”.

Here’s “why the rich get richer”.

Steps to gaining financial freedom.

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Lifestyle Wealth Creation

Proven Strategies For Building Wealth

Building wealth requires focus, drive, determination, and discipline. Here I show you some proven strategies for building wealth.

Most people lack the financial fortitude required to create and maintain wealth.

There is no magic button you can push to create instant wealth.

You must implement proven strategies for building wealth.

Yes agreed with the internet today, most people have been able to create massive wealth, however, it requires lots of work and sacrifice to achieve this.

Here are 6 strategies you can apply in your life today to create your own wealth:

1. Pay Yourself First

If you must set aside a portion of your paycheck before you start paying your bills.

If your employer has a 401(k) or 403(b) plan, enroll in it and set up a reasonable percentage to invest.

The money will come out before you see your paycheck, therefore the “loss” of discretionary income will be less noticeable to you.

Maximize your contribution if you are able, especially if your employer matches your contribution.

2. Start Saving Now

The sooner you start to save, the more you will have later in life.

If you are not able to save much until after your children are grown, you can step up your savings until you retire and still have a decent nest egg.

3. Get Rid of Debt

Before you build up your savings it is best to get rid of your debt and then embark on your wealth-building campaign.

If your credit card rate is 14% you will find it difficult to find any investment that gives you a return that exceeds that rate.

It would be better for you to pay down your debt first and then implement an investment strategy.

4. Get The Right Mortgage 

If you plan on holding onto your home for a short period of time, an adjustable-rate mortgage might be a better option as your rate will be lower than a fixed-rate mortgage.

Most homeowners only live in their homes for an average of 7 years.

Use the amount saved to pay down your mortgage quicker; refinance your home if rates begin to climb.

5. Build An Emergency Fund

Emergencies happen and nothing wrecks the best-laid plan more than an emergency, particularly one that costs you a lot of money.

The rule of thumb is to set aside up to six months of your income to live on in case of an emergency.

Without an emergency fund, you will be tempted to take on debt, cash in your retirement accounts, and sell valuable investments.

6. Protect Your Assets

You can have a healthy portfolio and see it disappear quickly if you are not properly insured.

Make sure that your health/dental, homeowner, life, and disability insurance coverage are sufficient to meet your needs.

All it takes is one legal judgment against you to wipe out your assets.

So there you have it, creating wealth requires having a plan, staying disciplined, and focused on your goals.

Applying these 6 strategies is the first step on your journey of wealth creation, remember, you deserve to be wealthy!

Looking for ways to start an investment account? Check out M1 Finance Today!