7 Steps To Getting Your Financial Headway
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| Steps To Getting Your Financial Headway |
Have you been working hard and making everyone else rich? Starting early in life, most people are programmed to mind other people’s businesses and make other people rich. It begins innocently enough with words of advice like these: “Go to school and get good grades so you can find a safe, secure job with good pay and excellent benefits”, “Work hard so you can buy the home of your dreams. After all, your home is an asset and your most important investment”, “Having a large mortgage is good because the government gives you a tax deduction for your interest payments”, “Buy now, pay later,” or “Low down payment, easy monthly payments,” or “Come in and save money.”
People who blindly follow these words of advice often become:
i. Employees, making their bosses and owners rich
ii. Debtors, making banks and money lenders rich
iii. Taxpayers, making the government rich
ii. Debtors, making banks and money lenders rich
iii. Taxpayers, making the government rich
iv. Consumers, making many other businesses rich
Instead of finding their own financial Fast Track, they help everyone else find theirs. Instead of minding their own business, they work all their lives minding everyone else’s. We are programmed to mind everyone else’s business, and ignore our own.
For many people, their financial statements are not a pretty picture, simply because they’ve been misled into minding everyone else’s business instead of minding their own business. Follow these action steps to change all that:
Fill out your own personal financial statement: In order to get where you want to go, you need to know where you are. This is your first step to take control of your life and spend more time minding your own business.
Set financial goals: Set a long-term financial goal for where you want to be in five years, and a smaller, short-term financial goal for where you want to be in one year. Set goals that are realistic and attainable.
2. Taking control of your cash flow
Many people believe that simply making more money will solve their money problems. But, in most cases, it only causes bigger ones.
The primary reason most people have money problems is that they were never schooled in the science of cash-flow management. They were taught how to read, write, drive cars, and swim, but not how to manage their cash flow. Without this training, they wind up having money problems and then work harder with the belief that more money will solve the problem.
More money will not solve the problem if cash-flow management is the problem. In fact, more money makes most people poorer because they often increase their spending and get deeper into debt every time they get a pay raise.
The majority of people do not prepare personal financial statements. At most, they try to balance their checkbooks each month. Remember that, for every liability you have, you are somebody else’s asset. Every time you owe someone money, you become an employee of their money. For most every liability, there must be an asset, but they don’t appear on the same set of financial statements. For every expense, there must also be income, and again, they do not appear on the same set of financial statements.
You need to sit down and map out a plan to get control of your spending and minimize your debt and liabilities. Live within your means, before you start to expand your means. To get a head start, follow these;
i. Review your financial statements
ii. Determine which source you receive your income from today
iii. Determine which source you want to receive the bulk of your income from in five years.
iv. Begin your Cash-Flow Management Plan by paying yourself first, and focusing on reducing your personal consumer debt.
Don’t forget that, People who cannot control their cash flow work for those who can.
Check This Also: 6 Reasons Why You Need A Bank Savings Account
3. Knowing the difference between Risk and Risky
Business and investing are not risky, but being under-educated is. Proper cash-flow management begins with really knowing the difference between an asset and a liability.
People often say, “Investing is risky.” For these people, it is risky, but not because investing is risky. It is their lack of knowledge and formal financial training that makes investing risky.
Financial literacy is not simply looking at the numbers with your eyes, but also training your mind to tell you which way the cash is flowing. The direction of cash flow is everything. So a house could be an asset or a liability depending on the direction of the cash flow. If the cash flows into your pocket, it is an asset. If it flows out of your pocket, it is a liability.
Those who are financially intelligent are those with the ability to convert cash or labor into assets that provide cash flow. Spending your life working hard for money only to have it go out as fast as it comes in is not a sign of high intelligence.
Remember that a rich person focuses his or her efforts on acquiring assets, not working harder. Due to their lack of financial intelligence, many educated people put themselves into positions of high financial. This often called “the financial red line,” meaning income and expenses are nearly the same every month. These are the people who cling desperately to job security, are unable to change when the economy changes, and often destroy their health with stress and worry. And these are often the same people who say, “Business and investing are risky.”
Being misinformed is risky, and relying on a safe, secure job is the highest risk anyone can take. Buying an asset is not risky. Buying liabilities you have been told are assets is risky. Minding your own business is not risky.
Take the following action;
iv. Begin your Cash-Flow Management Plan by paying yourself first, and focusing on reducing your personal consumer debt.
Don’t forget that, People who cannot control their cash flow work for those who can.
Check This Also: 6 Reasons Why You Need A Bank Savings Account
3. Knowing the difference between Risk and Risky
Business and investing are not risky, but being under-educated is. Proper cash-flow management begins with really knowing the difference between an asset and a liability.
People often say, “Investing is risky.” For these people, it is risky, but not because investing is risky. It is their lack of knowledge and formal financial training that makes investing risky.
Financial literacy is not simply looking at the numbers with your eyes, but also training your mind to tell you which way the cash is flowing. The direction of cash flow is everything. So a house could be an asset or a liability depending on the direction of the cash flow. If the cash flows into your pocket, it is an asset. If it flows out of your pocket, it is a liability.
Those who are financially intelligent are those with the ability to convert cash or labor into assets that provide cash flow. Spending your life working hard for money only to have it go out as fast as it comes in is not a sign of high intelligence.
Remember that a rich person focuses his or her efforts on acquiring assets, not working harder. Due to their lack of financial intelligence, many educated people put themselves into positions of high financial. This often called “the financial red line,” meaning income and expenses are nearly the same every month. These are the people who cling desperately to job security, are unable to change when the economy changes, and often destroy their health with stress and worry. And these are often the same people who say, “Business and investing are risky.”
Being misinformed is risky, and relying on a safe, secure job is the highest risk anyone can take. Buying an asset is not risky. Buying liabilities you have been told are assets is risky. Minding your own business is not risky.
Take the following action;
Define risk in your own words: Is relying on a paycheck risky to you? Is having debt to pay each month risky to you? Is owning an asset that generates cash flow each month risky to you? Is spending time to obtain financial education risky to you? Is spending time learning about different types of investments risky to you?
Commit five hours of your time each week to do one or more of the following: Read the business section of your newspaper. Listen to the financial news on television or radio. Read financial websites, magazines, and newsletters. Attend educational seminars on investing and financial education. Consider hiring a coach to help you work through the process of becoming financially free.
4. Deciding what kind of Investor you want to be
Start small, and learn to solve problems. Most people struggle financially because they avoid financial problems. One of the biggest secrets is that: If you want to acquire great wealth quickly, take on great financial problems.
There are basically three types of Investors. These are Investors who seek problems, Investors who seek answers and Investors who seek an “expert” to tell them what to do.
If you start small and learn to solve problems, you will gain immense wealth as you become better and better at solving problems.
For those who wish to acquire assets faster, it is important to first learn the skills of the Business owners and Investors. They need to learn how to build a business first because it provides vital educational experience, improves personal skills, provides cash flow to soften the ups and downs of the marketplace, and provides free time. Inside every problem lies an opportunity, and opportunities are what real investors are after.
To get on the financial Fast Track, become an expert at solving a certain type of problem. Become an expert at solving one type of problem, and people will come to you with money to invest. Then, if you’re good and trustworthy, you will reach your financial Fast Track more quickly. If you master solving business problems, you will have excess cash flow, and your knowledge of business will make you a much smarter investor.
It is highly recommend to become a Business owner first, before becoming an Investor. Many people want to become Investors hoping that investing will solve their financial problems. In most cases, it does not. Investing only makes their financial problems worse if they are not already sound business owners.
There is no scarcity of financial problems. In fact, there is one right around the corner from you, waiting to be solved.
Get educated in investing: Start small, and continue your education. Each week do at least two of the following:
Attend financial seminars and classes.
Look for For-Sale signs in your area. Call on three or four per week and ask the agent to tell you about the property. Ask questions like: Is it an investment property? Is it rented? What is the current rent? What is the vacancy rate? What are the average rents in that area? What are the maintenance costs? Is there deferred maintenance? Will the owner finance? What types of financing terms are available?
Practice calculating the monthly cash-flow statement for each property and then go over it with the real estate agent to see what you forgot. Each property is a unique business system and should be viewed as an individual business system.
Meet with several stockbrokers and listen to the companies they recommend for stock buys. Research those companies and consider opening a trading account and making some small investments.
Subscribe to investment newsletters and study them.
Continue to read, attend seminars, and watch financial TV programs.
Get educated in business: Meet with several business brokers to see what existing businesses are for sale in your area. It is amazing how much terminology you can learn by just asking questions and listening.
Attend a network-marketing seminar to learn about its business system.
Attend business-opportunity conventions or trade expos in your area to see what franchises or business systems are available.
Subscribe to business newspapers, magazines, and other types of communications.
Related: The 3 Types of Investors - Check Out Which Type You Are!
5. Seeking Your Own Mentors
A mentor is someone who tells you what is important and what is not important.
You need to ask yourself if there are good role models. If not, then you should spend more time with people who are heading in the same direction you are. If you cannot find them at work, look for them in investment clubs, network-marketing groups, and other business associations.
Choose your mentors wisely. Be careful from whom you take advice. If you want to go somewhere, it is best to find someone who has already taken the journey.
For example, if you decide to climb Mount Everest next year, obviously you would seek advice from someone who had climbed the mountain before. However, when it comes to climbing financial mountains, most people get advice from people who are stuck in financial swamps.
In most instances, it is hard to find mentors who are Business owners and Investors. Most people giving advice about business, investment and about money are people who actually are Employees and Self-Employed. Always have a coach or mentor. Professionals have coaches, Amateurs do not.
6. Making Investment disappointments your strength
Inside every disappointment lies a priceless gem of wisdom, just as inside every problem lies an opportunity.
When people are lame, they love to blame. The emotional pain from the disappointment is so strong that a person pushes the pain onto someone else through blame. In order to learn to sell, you had to face the pain of disappointment. But in the process of learning to sell, you will find a priceless lesson: how to turn disappointment into an asset rather than a liability.
For people who are afraid to try something new, in most cases the reason lies in their fear of being disappointed. They are afraid they might make a mistake or get rejected. If you are ready to start your journey to the financial Fast Track, you need to be prepared to be disappointed.
If you are prepared for disappointment, you can turn that disappointment into an asset. Most people turn disappointment into a liability, a long-term one. They often say things like “I will never do that again,” or “I should have known I would fail.”
The reason there are few self-made rich people is because few people can tolerate disappointment. Instead of learning to face disappointment, they spend their lives avoiding it. Disappointment is an important part of learning. Just as we learn from our mistakes, we gain character from our disappointments.
Also: 5 Good Ways To Make Saving and Investment Easier
Also: 5 Good Ways To Make Saving and Investment Easier
7. Having the Power of Faith
The only person who determines the thoughts you choose to believe about yourself, is you.
In considering to embarking on your own financial Fast Track, you may have some doubts about your abilities. Trust that you have everything you need right now to be successful financially. All it takes to bring out your natural, God-given gifts is your desire, determination, and a deep faith that you have a genius and a gift that is unique.
Our thoughts or opinions are much more important than our outward appearance. Our deepest thoughts are often reflections of our souls. Thoughts are a reflection of our love for ourselves, our egos, our dislike of ourselves, how we treat ourselves, and our overall self-opinion. Money Doesn’t Stay with People Who Don’t Trust Themselves.
Personal truths are spoken at moments of peak emotion. All words are mirrors, for they reflect back some insight as to what people think about themselves, even though they may be speaking about someone else.
Personal Truths Are Also Personal Lies. If you lie to yourself, your journey will never be completed. You have to listen to your doubts, fears, and limiting thoughts, and then dig deeper for the real truth. If you say, “I’m tired, and I don’t want to learn something new,” that may be a truth, but it is also a lie.
The real truth may be, “If I don’t learn something new, I’ll be even more tired.” And even deeper than that, “The truth is, I love learning new things. I would love to learn something new and get excited about life again. Maybe whole new worlds would open to me.”
Once you can get to that point of the deeper truth, you may find a part of you that is powerful enough to help you change.
Know that the only person who determines the thoughts you choose to believe about yourself is you. The reward from your journey is not only the freedom that money buys, but the trust you gain in yourself. My best advice is to prepare daily to be bigger than your smallness.
The reason most people stop and turn back from their dreams is because the tiny person found inside each of us wields more power than our bigger person.
Even though you may not be good at everything, take time developing what you need to learn and your world will change rapidly. Never run from what you know you need to learn. Face your fears and doubts, and new worlds will open to you.
Always believe in yourself, and start today!
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