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You Can Be A Cash Champion
Are you experiencing a tug-of-war between your bank account and the expenses of daily living?
Aside from needing a roof over our heads, some reliable transportation and clothes on our back, we like to treat ourselves a bit, by eating out at restaurants with friends, enjoying a few advancements in technology and having some entertainment to take our minds off the long week. But when you divvy up the paycheck, you may realize that there’s usually a bit more month at the end of the money. Most people are so busy working hard for the money, that they haven’t figured out how to make it work hard for them.
Does financial independence really have to be a dream differed?
No it doesn’t. Having the ability to live from the income of our own personal resources delivered to the marketplace is achievable. It’s not so much how much money we have, but what we do with our money that makes the difference.
To experience true financial independence, we have to adopt a positive philosophy around money, accompanied by a strategy to manage it and exercise the proper discipline to stick to our plan.
At the core of all of this, the process involves viewing our sum total of dollars like a staff of loyal employees who are ready to show up bright and early to give us an honest days work, as long as we give them the direction to do their best.
Here we will discuss some fundamentals of navigating your way through the money maze no matter where you’re starting from. Through applying the principals, you can start to change your bank account literally overnight.
When Are You a Cash Champion?
First let me ask you a question. What is your aim when it comes to earning money in general?
Do you just want to pay the bills on time? Are you going to work to buy some luxuries? What is your idea of a solid income? Is it $50,000 a year, $100,000, a million, or more?
Earl Nightingale known as the “Dean of Personal Development” mentioned in one of his most famous recordings from the 1950’s called, The Strangest Secret that a survey had been conducted with working men and the men were asked, “Why do you go to work every day?” 19 out of 20 didn’t know why they went to work. Almost all of them rationalized that they had to go to work every day because everyone else did it. That type of thinking has put a strain on the livelihood of the lineage of those men, who have used an economic blueprint that has defaulted on them.
A Grassroots Approach
To have enough money to reach your desired financial lifestyle, your best bet is to have money working for you, such as from investing into income streams.
According to renowned wealth educator & multimillionaire T Harv Eker, there are five wheels that you should have to experience a solid ride in winning the money game. Here are the five elements that you need: working income, savings, investments, passive or, low maintenance income and simplified living.
Let’s start with the end in mind. In his Millionaire Mind Intensive course, Eker has made it a point to encourage everyone to reconsider what their definition is of a desired financial lifestyle. He says that people make the money game harder on themselves because of having such a mega income standard — even when that standard is not truly compatible with what they really need and want.
Eker also tells us that there are several types of “money people.” There are some that have working incomes, but don’t save. Some save but don’t invest. Some invest, but have such disproportionate spending habits, that it’s very difficult for them to ever be financially free. When all of the wheels to financial freedom work in harmony: working capital, savings, investments, passive, or low maintenance income and simplified living, even when you catch a flat you can still keep moving.
The person who wants to jump to multi-millionaire status may have a grand challenge in front of them if it is a far cry from where they are. But of course, it is achievable. To help facilitate this, Eker encourages to start by winning the money game in levels; starting with Level 1.
Level 1 could be viewed as this: The amount of income you would need right now to cover all of your needed expenses, so that if you choose to work less, or if you lost your ability to work, you will still have a financial safety net to survive without needing assistance.
Maybe for you that’s $2,000 a month. Maybe it’s $5,000. No matter the number, here’s a blueprint for making it come together.
Allocating Like a Champ
So what’s the grand secret to making it all come together? Like most answers that work, it’s pretty simple. Learning how to split up every dollar that you earn is the foundation of creating wealth. We will use the allocation process using the example of just what $100 can do when used wisely. It doesn’t matter the amount that we manage, the results are in the habit of money management.
If you have ever read: The Richest Man in Babylon, George Clason illustrates through parable, a tale of characters in ancient Babylon living in the richest land of that time where wealth was extremely abundant, but despite that, these characters still found themselves slaving away for money just to survive.
One of the first lessons that the characters learned upon a visit to a wise rich man whose wealth they admired, was to pay themselves first, or, to allocate money for their own interests and security before they paid anyone else. This brings us to the first part of our allocation process.
Money Worker #1
Create an account specifically used for your financial independence. In fact, you can call it your Financial Independence Account. Here is your baby! This money is not to be played with at all under any circumstances as its being accumulated to be reinvested for your future.
To start, you should at least be saving a portion of your money. However, when you save an adequate amount, you should then be investing a portion of it. Once you get a return on your investment, you should be reinvesting a portion of what you have earned from profits, dividends and interests to be able to live on.
Many investors put their money into financial instruments like bonds and also into some type of real estate. I would encourage you to invest in your own business if you don’t yet know much about the first two options. A business usually takes the most emotional dedication, however, it can be much easier to comprehend and can yield a satisfactory return that you have a lot more control over earning.
This account is not meant for high risk investments that often equate to mere gambling. High risk investments could include making investments into things that you don’t really understand or into things that you cannot project a reasonable return on, including businesses that you get involved in.
Your financial independence account is your golden goose that will have to lay golden eggs, and you’d like it to be a fat goose, not one whose weight fluctuates from an irregular diet. All investments present some form of risk, however, you want to be able to manage the risk, especially if you’re fairly new to investing.
At it’s core, the purpose of this account is to make investments that enable you to be in a position to manage the investments by checking its progress and making adjustments to get the most out of it. This is done by cutting back the parts that don’t yield you the greatest result and maximizing the parts of the investments that do.
As an example, if you decide to invest in business, you may notice that you start to generate revenue but that you don’t have the profits that you would like after paying expenses. So you would naturally work on profiting more and minimizing your expenses in the process. Once that works, you may decide that you want to free up your time a bit, or at least have more flexibility over your time.
To achieve this, it may call for you to delegate certain responsibilities to someone else who can perform parts of your business for a fair compensation to them and you. This would allow you to focus on more important parts of your business or let you focus attention on making other types of investments. You also may decide to create a much more systematic approach to how your business runs so that it requires less resources.
If you have very little to create your own business or to start in one that already exists, than your greatest investment at this point would be the investment of educating yourself on ideas that can earn you a profit.
This could include purchasing books, audio programs, video series or attending seminars and online classes that can give you the ideas to add more value to the marketplace. Another plus regarding investing into your education is that education expenses may be tax deductible in a business as well. Be sure to check with an accountant to find out more.
As I mentioned earlier, your Financial Independence Account is your most important account to experience winning the money game. Before paying your bills, your net income after tax, means putting at least $10-$15, or 10-15% out of every $100 into a: savings for investments account.
Money Worker # 2
Debts often get created when people don’t have the means to pay for something and decide to finance much of their lifestyle. The here and now availability of almost everything we want with the swipe of a credit card has led to a lot of people drowning in what they owe.
So this second account is designed to behave more responsibly towards the spending culture that may be apart of your lifestyle. This account is going to be your Long-Term Savings Account. Think about saving for large purchases here such as for a vehicle, a vacation, or some luxury items.
It’s powerful when you see your money piling up to possibly be able to purchase many things cash as a result of saving up for it. If you really want something, you certainly won’t mind waiting to have it, even if it takes a little longer to get it. In addition, you likely wont have buyers remorse, because you know that you made a purchase that didn’t get you into debt. Take $5 out of every $100 for this account.
Money Worker # 3
Now we get down to the third account and that is, your Necessities Account. To start, you can use a whopping 65% to cover your cost of living. This includes expenses for such things as: food, necessary clothing, shelter, transportation, utilities and the like.
Remember when we spoke about simplification earlier? Figure out what costs you can cut out, or minimize from your monthly expenses. You will see that some of the things that you have been counting as needs are more or less preferences.
Some people have decided to ride a bike or use public transportation to commute with the weather permitting to cut costs while they’re building wealth. Others have decided to make even simpler changes, such as taking a lunch to work everyday. Just from making these small adjustments you could easily save a few hundred dollars a month.
Money Worker # 4
Time for some fun! The final account is your Pleasure Account. This account is for the dinner date at a 5 star restaurant, the 2 hour massage with hot stones and aromatherapy, VIP at your favorite night club, or an evening at the theater with the best seats available.
The whole purpose of this account is for your inner spirit to be nurtured and for you to get used to the idea of treating yourself to finer experiences. You have certainly earned it from keeping a discipline over your money habits.
Some people feel guilty about spending so much money on fun after the weekend is over, but you won’t, because your spending is all apart of your plan. You can feel free to explore new horizons with this account.
Having a fun account will also be a great push for you to keep striving for more accomplishments. Imagine what you could do with $1000 per month just to have fun with! If you want to stash the money in your pleasure account instead of using it every week or month, you could really treat yourself to a fantastic experience. But don’t neglect to make yourself happy from life’s pleasures.
Pleasures can energize you and motivate you as well. For some reason, a lot of people think it’s completely normal to have a stress related heart attack that cost hundreds of thousands of dollars to cover in hospital fees, insurance, prescription drugs and doctor’s salaries! But they find it wasteful to blow a couple of thousand dollars on fun that could have possibly avoided the heart attack in the first place! Don’t you be one of them. Have fun, you deserve every bit of it. Take $10 out of your $100 for pleasure.
Points to Consider
Keep a visual of all of your accounts by checking the health of each account regularly. The ability to see your pot getting bigger gives you an added incentive to keep adding more to each pot out of habit. Also, make sure you always have some money remaining in each account instead of using every single dollar — even if it literally means just keeping $1 in each account after using it appropriately.
The remaining funds will act as a magnet to let you know that each of your accounts is ready to pull more in as soon as you attract more to it. A penny saved is a penny earned will start to mean something much more than a simple saying when you have a purpose for each and every denomination of currency that comes into your presence.
Also, keep in mind that as your needs and wants change, your numbers may be adjusted in accordance with your lifestyle. Perhaps more money can be allocated towards nurturing yourself, or investing into your fortune. The real key here is to create some type of percentage that you can stick to that gives you what you need and want out of your money management habits.
If you notice, I didn’t place emphasis on charity yet. Based on using the above percentages, after using 10-15% for saving and investing, 65% for basic needs, %10 for pleasure and 5% for longer-term savings, you should have about 5-10% left for other things. Charity could be one of those things.
But, when you think of what part of being charitable encompasses, which is giving to those in need; particularly, those that cannot do for themselves, you can be charitable in other ways outside of using your money — especially when you are trying to become financially independent.
Being benevolent with your time to an elderly person or to less fortunate individuals can be worth a lot more than a percentage that you could devote in money, both to the recipients of your good will and to yourself. Your time is a far greater resource then your cash, and even when money decreases in value, a helping hand wont.
What about debts? Debts that you owe should certainly be paid. But the premise of using your money and energy shouldn’t be put into clearing your debt. Just think about it. Do you wake up out of bed enthusiastic about working eight hours to pay off your credit card and medical bills?
The main objective with this money management program is to attract more of what you would like, not of what you don’t like. Focus on financial freedom and playing the money game to win and not playing to avoid losing by a lot. Make arrangements with the creditors to pay off your debts and stick with the plan, while also working to ultimately become financially independent.
Minding Your Money
Another important note is that you may find yourself needing to address conflicts surrounding money. Many people feel that it’s wrong to get wealthy and that it’s a sign of greed. Greed is all about selfishly and sometimes ruthlessly having as much as you can at the expense of others. I’m sure you can see that the wealth plan that we have discussed here does not fit into that description.
Being a good steward of money creates more of it and you deserve every dollar that you will get — because its accumulation is a representation of your positive habits. You will also be able to show others how to get financially independent which will free them from the burden of poverty.
When you get the stresses of a lack of money out of the way, not only will you be a cash champion but more importantly, you may find that you can enjoy a much more peaceful and even more loving life that gives you a sense of wealth that is far more meaningful than anything that money can buy.
Copyright © 2016 Waymon Brown
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Written By: Waymon Brown. Creator of theesquireproject.com. Email firstname.lastname@example.org