By continuing your education beyond high school, you have the opportunity to make one to four or more million dollars over a life-time working period. Since most working people have this chance to reach such an impressive financial milestone, it is essential to be aware of your income generating potential, and work to protect your income, and spend wisely in order to achieve and maintain a quality standard of living with financial security.

Proper attention to the following areas will assist in your efforts to achieve and maintain optimal personal health, and cause growth in income and reduction and control of expenses which will favorably increase your cash flow.

1.

Avoid engaging in high risk behaviors, practice age appropriate preventive health care, and comply with sound medical advice. Good health habits consist of being physically active, having a nutrient-rich diet and reducing caloric intake, avoiding tobacco and alcohol abuse, adapting appropriately to stress, wearing seat belts, and practicing proper procedures for the prevention and control of infections.

Serious attention to good health habits will reduce personal risk for chronic conditions such as heart disease, hypertension, diabetes, obesity, accident and injury, and infectious disease. Serious neglect will increase the occurrences of illness, drain personal finances, and reduce personal revenue.

2.

Take advantage of education and training programs to be prepared when opportunity knocks

3.

Spend for value and according to a predetermined goal to avoid un-necessary or over spending in an economy which depends upon consumer spending

4.

Analyze your cost of borrowing to reduce the amount that you pay in interest for those expensive personal loans and mortgages

5.

Reduce taxes by increasing your knowledge of available tax advantages and innovative efforts to take full advantage of tax incentives

6.

Establish appropriate legal entities such as businesses, trusts, retirement programs, asset donation and other deferral programs that may allow tax incentives, deductions, deferrals of revenue streams and increased income

Attention to these areas will allow you to retain more of your earned revenue, and add additional revenue over your working lifetime, so that you can support and maintain healthy and quality living standards.

Does your health have anything to do with your personal wealth building goals? If you’ve never thought about it, then this article might be interesting to you.

Did you know that medical bills are the leading cause of personal bankruptcy in the United States? But even if you never have a health emergency that puts you in financial trouble, there are other ways that your physical health can affect your efforts to build personal wealth.

Read this article and get ready to develop a plan for improving your personal health to assist with your personal wealth building.

The Impact of Your Personal Health on Your Personal Wealth Building

Do you ever have difficulty focusing or keeping up the willpower to stick with your financial plan? If so, you might have tried positive affirmations and writing down your goals. But at the core of lack of focus and lack of willpower is physical fatigue. The less physical energy you have, the harder it will be for you to focus your mental energy on positive things like your financial plan. Not to mention that the inability to focus has a significant impact on your ability to stay focused and productive at work.

For best results, spend some time everyday doing meditation or prayer to relax your mind and to maintain healthy responses to stress. Also, start a cardiovascular routine that you do at least three times a week and for 15 minutes a day. Even if you don’t think that you have the time or the energy, remember that getting your body into shape will give you more energy.

Also, it’s important to remember that your diet is more important than your activity level. Eat natural foods whenever possible and drink the proper amount of fluids everyday 1oz for every 2 pounds of body weight.

Keeping Your Personal Wealth Building Plan Simple and Effective

While we’re talking about staying focused, it’s important to keep your plan for personal wealth building as simple as possible. Think about it, how hard is it to stay focused on something where it’s complicated and hard to understand? That’s why the four bucket personal finance management system is so effective, it keeps things simple and makes it easy for you to stay focused. Using this system and taking good care of your physical health will make it much easier for you to focus on your plan for personal wealth building.

Learn more…

Article Source: http://EzineArticles.com/?expert=Frederick_James

Personal wealth building success starts and ends with taking the road less traveled.

You might have heard the words of the poet Robert Frost who wrote: “Two roads diverged in a wood, and I….I took the road which was less traveled by, and that has made all of the difference.” In regard to personal wealth building, this simple statement speaks volumes. Just think about how many people are broke, frustrated and trying to win the lottery….that’s most people.

If you want different results, there are two things you must do that most people just aren’t willing to do.

Unpopular Personal Wealth Building Principle #1: Training Your Mind

Ask someone to invest money to get what they want, and most people are willing.

Ask someone to do a little hard work to get what they want, and most people are willing to do that to.

But ask someone to think and to use their creative imagination to develop a plan for getting what they want, and most of us shut down.

Billions of people search the internet for canned solutions for losing weight, for improving their relationships and for wealth building….very few people are willing to apply their mind.

This is the way that the majority operates, so if you’re willing to commit your creative imagination and your critical thinking, that’s the first step to getting out of the broke majority.

Unpopular Personal Wealth Building Principle #2: Delayed Gratification

All of us want instant gratification, it’s in our nature. However, it’s those who train themselves to delay pleasure and gratification that end up getting it…then everyone else looks at them with envy, talking about how lucky they are. Wealth building has nothing to do with luck, it’s all about consistently applying simple strategies such as: monitoring your spending, spending only for value, investing in yourself before paying your expenses and saying no to marketing gimmicks.

Learn to delay gratification and you’ll be light years ahead of the majority in your quest for financial freedom.

Unpopular Personal Wealth Building Principle #3: Promoting and Selling

Ask most people why they want more wealth and they’ll give you a long list of things that they’d love to buy. On the other hand, ask anyone who already has a lot of personal wealth about how they got there and they’ll tell you about what they promoted or sold to get there. Maybe they promoted their services to an employer or to their customer base or they convinced someone to invest in their company. The bottom line is that most people hate to sell, they hate sales people and they hate the idea that someone is “trying to sell them something.” These are the same people who love to buy things and want financial freedom so that they can buy things.

If you want to succeed at personal wealth building, the first step is to get out of this majority and to fall in love with selling and promoting. Do this, and it’s only a matter of time before people realize the value of what you’re doing, your customers, your employer, an investor. So if you really want financial freedom, make these three uncommon habits a habit in your quest for personal wealth building.

Learn more…

Article Source: http://EzineArticles.com/?expert=Frederick_James

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Many may agree that the ease of attaining financial independence is related to having the proper mind set and performing specific steps repeatedly as has been done in other successful projects. However easy it may seem to make money, I have no doubt that many will also agree that it’s the most difficult thing in the world to keep it.

These seven steps will empower you to increase your income, to take control, to retain earnings, and build personal wealth.

1.

Spend less (money coming in must exceed money going out) – This step seems so simple and quite obvious. Why is this step included when it appears to be common knowledge? Easy credit with low interest rates serves as a key factor in driving consumers to spend more than their collective disposable incomes.

The good looking things, the incentives offered, and our tendency to buy large ticket items such as automobiles, vacations, and home appliances can put a strain on disposable incomes. Considering your other living expenses, you can easily find yourself living from paycheck to paycheck or spending more than the amount of money coming in.

2.

Acquire the appropriate education and training to reach your goal – Sometimes the more educated about a subject you become, the more potential opportunities for failure you begin to see. Seek out the advice of experienced people to help you move forward and not get stuck trying to find ways to deal with that failure. It is essential that you remain alert and be prepared to go through the gateway of opportunity when presence.

3.

Learn to do the right things in a certain way and be consistent – The corollary to Einstein’s quote of insanity is that doing the same thing over and over again and expecting the same results is sanity. Learning to do those things that produce financial success and repeating them is wise and not dependent upon a particular business or profession or environment or possessing an exclusive talent.

4.

Accumulate capital, a consistent amount set aside from disposable income, to generate new wealth – Don’t waste another moment not being invested i.e. have your money working for you instead of you working for money.

5.

Practice good health habits – Poor health is the most costly circumstance you can encounter in life. As personal health decreases, healthcare utilization increases. To add to this, poor health keeps a person from working as much as a healthy person can. People who are in poor health are also less adept at dealing with stress and anxiety; and they get less restful sleep than healthy people do.

6.

Avoid or minimize the “Bandit or Gotcha costs” such as excessive interest and taxes, penalties, late charges, carrying charges, overdraft fees, and so on. In 2007, an FDIC study revealed that consumers paid fees of $17.5 billion annually on automatic overdraft loans of $15.8 billion per year. These bandit costs add up and direct a portion of your cash flow away from you, and towards someone else.

7.

Spend for value according to your predetermined goal – If you are wandering around aimlessly and leaving your financial success up to chance, there are those who are busy developing specific plans for making a profit off of you. In other words, if you don’t have a plan for your money, it will end up in the hands of someone who does have a plan.

Article Source: http://EzineArticles.com/?expert=Frederick_James

I am sharing these personal finance guidelines for anyone who wants to achieve financial freedom. Of course, everyone wants to have financial freedom…but wanting it is not always enough. You also have to be willing to do the work and (more importantly) to learn what is really going to produce results. These strategies for increasing personal wealth and financial freedom will help you to learn what works, and doing the work is up to you.

The First Step to Financial Freedom: Powerspending of Money

The first of the personal finance guidelines is to spend money for value. This is the practice of “Powerspending” and it is one of the most commonly neglected strategies for personal wealth. Start by keeping track of all your financial transactions by writing them down. Then, go through the list every week and ask yourself: “Am I spending money in a way that adds value to my life or to someone else’s?” Things which add value to other people’s lives are: paying interest on loans, spending money on things that do not add economic value to your life and which you do not really need and “bandit costs” such as late fees, overdraft fees, penalties, and so on.

The Second Step to Financial Freedom: Powerspending of Time

Powerspending of time is using your time to do things which will add economic value to your life instead of things which simply waste time. Donald Trump talks about this in his book on building wealth. He talks about the difference between the working class and the wealthy. The wealthy value their time and they commit spending their time creating and working plans and strategies for increasing personal wealth. Meanwhile, broke people are more likely to do things like spend three hours a day watching TV or an hour arguing with the phone company over a $10 charge on their bill.

Start keeping track of how you are spending your time and ask yourself: “Am I spending my time on things which will help me add value to my life or not?” Most likely, you already know the answer…but it is important to be honest in order to motivate yourself to change.

The Third Step to Financial Freedom: Powerspending of Your Talents

Powerspending of talent is using your talents in a way that they add value to your life instead of to someone else’s. Brian Tracy said that every person has at least one idea a year that would make them a millionaire if they just acted on it. In the same way, all of us possess talents which could bring us a lot more wealth than we realize. The problem is that we spend too much of our time investing this talent working for someone else so that they can profit from our talent….and they are. In fact, they are generating more profit from our talent or else they would not be able to afford to pay us.

So take inventory of your spending when it comes to money, time and talent and begin focusing on Powerspending those resources towards building your own financial freedom.

Article Source: http://EzineArticles.com/?expert=Frederick_James

Having easy finance expense categories can make it a LOT easier for you to stick with your personal budgeting commitment long-term. You know how it is when you try to put together a budgeting system, but you have 37 expense categories to look after. Who can live their life that way on a consistent basis without deviating from the system? It is almost impossible, and that is why the four bucket system keeps it simple when it comes to managing your expense categories.

Introducing the Four Bucket Personal Finance System

When you think about it, there are only a few major categories when it comes to budgeting: living expenses, investing, reserve spending and gift giving. Everything fits into one of these four categories or “buckets,” and so keeping these as your expense categories will make it much easier for you to stick with your commitment. How do you get started in using the four bucket personal finance system?

Start With Your Priorities

The first step to using the four bucket system is arranging the four categories according to your personal money management principles. For example, placing them in this order has proven to be very effective for people who want to build personal wealth:

1.

“Pay Yourself First” (accumulating capital to create new wealth)

2.

Living expenses

3.

Contributions (includes charitable giving)

4.

Reserve (building an emergency and special purchase fund)

This is backwards to the way that the majority of people manage their personal finance expense categories. Most people start out by paying their living expenses and investing what is left over…this is a surefire way to make sure that you never start investing.

There is an old saying that goes: “Poor people are poor because they spend their money and invest what’s left. Rich people are rich because they invest their money first and then spend what’s left.”

If you apply this principle in using the four bucket personal finance system, you will never miss the invested money. You will adapt to pay your living expenses without it, and this will put you on the road to building wealth and financial security.

So sit down with these four personal finance expense categories and apply the four bucket personal finance system to managing your income and outgo. For best results, put “Pay Yourself First” and start making your wealth building and financial security the number one priority.

I am sure that you are familiar with many great success stories of individuals who beat the averages by earning greater sums of money in a much shorter period of time than 40 years. I met with a business owner to introduce certain financial products that will allow him to expand and improve his business. He quickly informed me that he has never had a loan. He proudly shared with me that he is debt free and presently the owner of a personal residence, rental apartments, barber shops, and Bar-B-Q restaurants. His business transactions are all cash when purchasing and selling assets. His model for business expansion or entering a new venture is first to purchase the necessary equipment and facility for the business venture, and then open the business without debt. He stated firmly that “a person who needs a loan to start a business does not need to be in business!”

Many may disagree with this business philosophy and speculate that he perhaps could have generated more revenue and accumulated greater wealth by using the concept of leveraging, but this business man has defined his success. He owns debt-free cash generating assets which exceed a million dollars in value, and has cash money set aside for each of his children in the event they decide to travel an entrepreneurial pathway. This gentleman is in his early sixties, does not have a high school diploma, and cannot read or write.

Bill Gates left Harvard University in his junior year to pursue his vision, and became a multi-billionaire in less than 40 years. I am truly impressed with each of these stories and many others which do inspire many of us in several areas of our lives. Likewise, I am uniquely impressed with the U.S. Census Data suggesting that in this society the masses can also reach an impressive financial milestone. So, whether you fit the profile of the aforementioned business persons or are a representative of the U.S. Census Data, wisdom is that being prepared, and having the right attitude and courage to act, allows the greatest chance of fully developing your earning potential when opportunities present.

Now, just as you expect to have increasing earnings over a life working period, simultaneously, you want be keenly aware of how to prevent an erosion of your earnings, any reduction of your accumulations and lowering of your standard of living resulting in less money to purchase the family home, educate the children, take family vacations, and plan for retirement.

So, any amount of money that is earned over a life working period, you need to be aware of how to spend and manage it wisely in order to achieve and maintain a high standard of living. Recognizing that each personal situation varies and may require a different focus of attention, there are six areas where effort of some degree must be made to preserve earnings and to allow future growth.

1.

First, poor health, practicing high risk behaviors, and neglecting known preventive health and medical advice increase the occurrences of illness, drain personal finances, and reduce earnings. Based on data from the California Health Interview Survey that was collected during a period of economic growth (2007) nearly one in 13 Californians had some kind of medical debt, and that those with debt were twice as likely as those without debt to report delays in getting needed medical care. The cost of medical care has threatened the finances of many families, and has become one of the most common causes of personal bankruptcy in our country.

Being physically active, having a nutrient-rich diet and reducing caloric intake, avoiding tobacco and alcohol abuse, adapting appropriately to stress, wearing seat belts, and practicing proper procedures for the prevention and control of infection are good health habits which will reduce personal risk for chronic conditions such as heart disease, hypertension, diabetes, obesity, accident and injury, and infectious disease. These conditions can create a big hole in your finances and drain your life earnings. Good personal health habits can reduce the risk of these acute and chronic conditions, and offer effective prevention or control of disease, if present.

Why not practice good health habits, and start as early as possible?

2.

Second, failure to take advantage of education and training opportunities can leave you unprepared when opportunity knocks. Consequently, the chance for increased income, promotion or a move to a higher level, a new job, or new venture opportunity, is missed. Since the cost of goods and services often increase at rates exceeding many households’ income, it is essential that you remain alert and be prepared when the opportunity that will improve your earnings, lifestyle or standard of living presents.

You can be prepared for changes that are taking place in the marketplace by taking a course, seeking additional training, and having courage to explore new opportunities for advancement. To our surprise, cost of living increases often do not keep up with the cost of goods and services. You may need to adjust by seeking promotions, new career opportunities, acquiring new skills, and creating multiple streams of income which now emerge as a wise strategy in the 21st century.

3.

Third, you pay too much in interest because of expensive personal loans and mortgages. Banks are very effective in velocitizing money after encouraging consumers to make deposits and in return receive a small interest income. Banks are aggressive in investing those deposits to make money through loans and other financial instruments yielding substantially higher returns than the depositors receive as interest income. For short-term loans, interest rates may exceed 20%. Paying high interest on credit card debt lowers your effective or available cash for other family or personal needs. For a long-term loan of $200,000 at a fixed interest rate of 5.32%, a borrower will pay slightly more than the amount borrowed in interest payments alone over a 30 year period. (Total payback of $400,714 with $200,714 interest) The interest amount, being the cost of borrowing, is a significant subtraction from personal earnings even after tax adjustment. You, the borrower, must be aware of this significant cost and plan to reduce or compensate for this major subtraction from lifetime earnings.

4.

Fourth, each person should pay their fair share of taxes and we should continue to fight for good tax legislation that helps to support responsibilities as determined by the constitution. On the other hand, many pay unnecessary taxes due to a lack of knowledge of tax laws, and innovative effort that allows one to take full advantage of tax incentives. The government uses tax incentives and allows tax deductions to stimulate or direct activity in certain areas of our society such as community service, national and international programs, starting a business, local development, locating in certain communities, providing job opportunities, charitable giving, and certain investment programs. In some of these areas, you can find that opportunity to partner with the government for your benefit and others.

5.

Fifth, failing to establish legal entities such as businesses, trusts, retirement programs, asset donation and other deferral programs can result in a loss of tax incentives, deductions, deferrals, additional revenue streams, and increased income. The internet offers an excellent opportunity to start a business the 21st century way, and paves the way for many home-based operations.

6.

Sixth, inappropriate spending- our economy depends upon two fundamentals: consumer confidence and consumer spending. During a recession, consumer spending is decreased as compared to a growing economy where consumer spending is increased. Our available money is used to cover expenses, and the remainder, if any, is usually left in banks in checking and savings accounts, or other types of bank financial instruments.

Common understanding is that money used to cover expenses or purchases is considered an act of spending, and money left over or deposited in the bank and not used for expenses, is considered savings. On the contrary, your deposit or money in the bank is also an act of spending. You have purchased bank services consisting of checking and storage privileges, agreed access, capital security and a modest interest income. As customers, we must reorganize our thinking and look at all disbursements of money, and resources including investments as an act of spending.

In an up or down economy, you, the consumer, must focus on spending for value rather than impulse buying or spending, or just accumulating money (savings) in bank accounts. Spending for value achieves efficiency, and engages self-accountability by raising obvious reality-checking questions such as: Is it prudent for me to spend this money now, Am I getting the best value for my dollar? Does this spending contribute to accomplishing my goal? Answering these questions is the beginning of control, and the first defense against excessive spending. A great lesson to learn is how to safely invest my available cash similar to banks by applying Irving Fisher’s (1930s) concept of “The Velocity of Money”.

These six areas, if attended to, will allow you to retain more of your earnings, add additional growth earnings over your working lifetime, and help you to support and maintain a healthy standard of living.

Personal wealth building success starts and ends with your spending habits. The wealthiest people in America (the Forbes 400 that is) all have one thing in common when it comes to their financial habits: their spending is always directed towards financial freedom. This is why you never find rent to own stores, title loan companies and stores that sell 60 different kinds of lottery tickets in the wealthy neighborhoods. All of these are things which people spend money on which help someone else to become wealthy. This is why the practice of “Powerspending” is one of the most important strategies for increasing personal wealth.

Let us look at a few personal wealth building strategies which encourage spending that leads to financial freedom.

Spending on Personal Wealth Building Education

Your personal education is the most valuable asset you have. It is more valuable than your house, your job or even your company (if you own one). It is also something which you can never lose of which can be used to rebuild wealth even when it is lost. Think about it, if you take $1 million and put it in the hands of someone who is well educated when it comes to building wealth, the money will multiply many times over within a very short time. Take that same $1 million dollars and put it in the hands of someone who does not understand the principles of building wealth and financial freedom, and the money will be gone in a few years with nothing to show for it.

So spending money on your financial education is the most valuable personal wealth building strategies you can use.

Spending Money on Assets Which Create Money

The second key to personal wealth building is spending money on assets which help you to create more money. Some examples of this would be: rental properties, patenting or creating products to sell, purchasing investments which help you to earn compound interest and anything else which will get your money working for you. Most people spend their whole life working for money, but those who achieve financial freedom know how to put their money to work for them.

So take an inventory of your spending habits and be honest with yourself about how much of your hard-earned money is being spent on depreciating assets like: new cars, a house which has a mortgage that exceeds 40% of your monthly income, big screen TVs and other expensive forms of entertainment. Sure, all these things are nice to have, but whenever you buy them you are making someone else richer and yourself poorer. Start focusing on spending money on things that will add financial value and cash flow to your life, and financial freedom will be within your grasp.

Making mistakes and just careless handling of money occur very early during our growing up period. Without effective early intervention, these behaviors can become bad habits, progress to serious repeated financial problems in life, and cause major threats to our personal financial security. P.T. Barnum said in The Art of Money Getting, “True economy consists in always making the income exceed the out-go.”

So, how and what cash management concepts do you introduce to children that will result in the cash coming in exceeding the cash going out? How soon should we begin to teach our children about cash? There are many creative and innovative ways to teach cash concepts which should at least begin prior to the decision to give money to children as a gift, an allowance, or a salary.

I have found the following approach that I call the Four Bucket Program to be quite useful and applicable for learning to manage cash irrespective of age and level of money knowledge.

Step 1:

Label each of the four buckets accordingly: Pay Yourself First, Contribution, Reserve, and Expense. Become creative in identifying what symbol or object that you will use for the bucket.

Step 2:

Allocate all monies received, whether from a gift, allowance, or salary now called disposable income, to each bucket with no more than seventy percent of the income to be placed in the expense bucket. Place the remaining 30% equally or any percentage amount of your choosing into the other three buckets. So, if you choose to give money to your child for the purchase of an item that cost $5.00, and also want to begin a cash exchange experience for the child in purchasing goods and services, the amount should be $7.14. The five dollars (70% of $7.15) is placed in the expense bucket for purchase of the item, and the difference of $2.14 is allocated to the three buckets at some predetermined distribution percentage. (E.g. 10% of $7.14 to the other buckets, respectively)

Step 3:

Set up a regular time to review and evaluate the financial status. A great teaching moment exists after purchasing the $5 item. A review shows that after the purchase your child has positive balances in each bucket except the expense bucket setting the stage for valuable lessons to be learned regarding spending, having a reserve, investing, and charitable donations.

Step 4:

Set goals for each bucket which can occur over time as the child grows to understand the workings of the program.

Learn more about the use of the 4 Bucket Program in managing cash…

Your cash flow is the financial energy that supports your standard of living; your purchase of goods and services; your children education; your retirement planning; your need and desire to care for love ones and others; and your overall financial security.

To maintain an adequate cash flow in your life, wise planning is required through the setting of long term goals followed by the objectives that will lead to successful accomplishment of these goals. Your adequacy of cash flow is then determined by what is needed to complete these objectives and ultimately reach your long-term goals.

Realizing that the objectives are stepping stones to the long-term goals, your chance for having a successful plan is greatly increased when you can answer these five questions with clarity.

1. Where am I?

Your current status must be reviewed which will include knowing the source, amount, and projected duration of your current income. Also, do you have money left over each month after paying the bills? Do you end each month in the red? What assets do you own that is generating income to contribute to your monthly disposable income? Careful attention and thoroughness to answering the question – Where am I? – is a good reality check.

2. Where do I want to go?

Setting a goal gives direction, destination, and quantity or intensity to your activity and behavior. Also, reveal the rationale for your goal. Set your goal high enough so that it will invoke a challenge to make a difference in your life. For example – double your income, or generate an alternative minimal income stream of $5000/month or more, or start a business that you can operate spending 10 hours/week, or complete an advanced degree or training.

3. When do I want to get there?

Always estimate a time to succeed; otherwise, this effort will often settle to the bottom of your priority list. For long-term goals, three to five year periods are practical time intervals. Another important and often overlooked effect of not establishing a time for completion is the unchecked anxiety that is generated from procrastination.

4. How do I get there?

Determine your personal resources and your pattern of spending. An easy way is to calculate your surplus funds at the end of the month, and determine if your present source of income will continue and sustain you during your period of focus activity

5. What do I need to get there at the projected time?

You may need to get certified, reorganize or eliminate debt, change your location, obtain a loan, or form different relationships. This is also the time to consider having a mentor for experienced counseling, to give an objective view, and to have accountability.

When you address these steps, your efforts are now focused on finding the best way to succeed within the time allotted. You now have the chance to put together a credible plan and engage support from those who are around you.