If you’re serious about building financial freedom, one of the most important decisions you can make it to stop using credit for paying expenses and for making purchases. In fact, in the four bucket system for managing your spending, category three is focused on laying up cash reserves for the sake of planning large purchases. Again, here are the four categories in the system: {Read More}
Jan
2013
Debt a Wealth Building Tool or Financial Bondage?
There is an ongoing debate about whether or not debt is an effective tool for building wealth or a means of putting oneself into bondage. Financial advisor and radio personality Dave Ramsey and marketing expert Dan Kennedy (aka, “The Millionaire Maker”) are both passionately against the use of debt for any financial purpose and consider it to be a severe hindrance to wealth creation. On the other hand, there are many financial experts who passionately disagree with this position and who consistently advise people to leverage debt to build wealth…so who is right? {Read More}
Nov
2012
How Tightly Do You Have to Manage Your Personal Finances?
A simple personal cash flow plan is always better than one which is complicated, difficult to understand and even more difficult to live on.
Too many times, people over complicate their personal cash flow plans and try to draw in their purse strings so tight that they burn themselves out and give up on their financial freedom plan altogether.
So this raises the question: “Just how tightly do you have to manage your personal finances?” This article will answer that question and help you to stay on track with a simple personal cash flow plan… {Read More}
Oct
2012
Increasing Personal Cash Flow Using Real Estate Investing
Increasing your cash flow through investing in property has always been a popular method for personal wealth building. Think about it: housing represents a consistent tangible need, and as long as people are buying it, it will remain one of the best strategies for increasing personal cash flow and building wealth.
The problem is that you can lose LOT of money using real estate if you do it the wrong way. Let’s look at a few ways to eliminate risk when using property investments to increase your cash flow. {Read More}
Oct
2012
Three Personal Cash Flow Strategies for Financial Freedom
Personal cash flow strategies will always need to be a part of your financial plan. You’ve probably realized by now that no matter how much wealth you have, you’ll always have expenses. Even if it’s only the expenses which you need to survive, you’ll always have a “debt” to pay.
That’s why a good solid cash flow strategy is key when it comes to increasing your personal wealth and achieving financial freedom. The following are three personal cash flow strategies that can help you to build increased financial security and maintain a healthy net worth. {Read More}
Oct
2012
A Simple Cash Flow Strategy that You can Follow
Simple personal cash flow management beats out a complicated one every single time. You’ve probably met your share of people who have a lot of complicated knowledge about personal finance and all these ideas about how to achieve financial freedom, yet they’re broke or pretty close to it.
When you think about it, smart people often have a very difficult time using their knowledge to create real life results. Funny how that works, yes?
This is because simple personal cash flow strategies are a LOT more applicable to real life…especially when your commitment is tested. Let’s look at one simple personal cash flow management system that is proven successful.
The Four Buckets: A Simple Personal Cash Flow System
The four bucket personal cash flow system is so simple that once you get into the habit of using it, you can almost live off of it without having to refer to a written spending journal. It works like this: {Read More}
Oct
2012
Is Saving Money Overrated? Secrets to Financial Freedom
If you’re after financial freedom, you’ve probably already heard a lot about how important it is to save money. But is saving an overrated and outdated strategy?
You might have heard that Robert Kiyosaki claims that inflation has made savers into losers. Is there any value left in saving money or has that forever changed? In this article, we’ll be looking at the simple way to use a “saving” strategy in order to accomplish financial freedom. {Read More}
Aug
2012
Is it a Good Time to Get Started Real Estate Investing?
Many people who were once considering real estate investing for the purpose of personal wealth building are now afraid to mess with it, at least until the economy recovers. However, is it really a good idea to wait or are there still plenty of opportunities for personal wealth building by investing in properties?
Believe it or not, now is as good a time as any to invest in properties, it’s simply a matter of how you go about it…
Why Real Estate Investing Will Always be Safe
People will always be buying houses…at least as long as we remain a civilized species that lives in houses. I suppose that if we went back to being hunter gatherers that the real estate market might suffer, but I wouldn’t bank on that happening any time soon. Nope, as long as people are living in houses, real estate will be one of the most practical and effective strategies for increasing your cash flow or for your wealth building.
This is not to mention that even if you end up with a house that you can’t sell (without taking a huge loss that is), you can still use that property for creating a monthly cash flow by renting it out. Then you simply collect that cash until the market recovers and the opportunity to sell it returns. The great thing about real estate investing is that it can never go to zero and that it can NEVER become completely profitless.
However, you CAN fall flat on your face with investing if you don’t know what you’re doing. This is why there are a few things you need to do if you want to succeed…
Neutralizing Your Risk in Real Estate Investing
Anyone who is interested in property for increasing personal cash flow or for personal wealth building needs to do three things to get started:
• Get a mentor
Just get one, never mind the money you might invest in it. The money that you’ll save in learning by the “school of hard knocks” will be well worth it…and then some.
• Prepare your credit
Unless you plan on paying with cash for everything, your credit will be one of your most important tools for real estate investing. So before getting started, check your credit report (not just the beacon score) and do what you can to get anything removed which might cause doubt for a lender.
• Get control of your finances
If you don’t yet have control of your cash flow in regard to your current income and expenses, real estate investing is not a good idea…or any new financial endeavor for that matter. Use the four bucket financial system approach to get your spending in priority, then you’ll be much better prepared to execute your investment program.
These three things will help you get started with one of the safest and most practical strategies for personal wealth building.
Jul
2012
How to Manage Money So You Can Start Building Wealth
Learning how to manage money is the prerequisite to building wealth. This might sound simple, but how many times have you tried to skip the step of living off of a written budget, developing a set of expense categories to live off of and all those other “boring” money habits and tried to go right for the step of building wealth? It has been said that there are a millions ways to make a million dollars, and this is true.
However, none of them will work unless you first start managing what you already have. Let’s look at a simple plan which can help you accomplish this…
A Simple Plan for Controlling Your Cash Flow
Many times, the reason we have a hard time developing and living by a budget is that we over-complicate our budget with pages of expense categories. Instead of trying to live off of that kind of detailed plan, try these four simple expense categories:
1. Investment of 10% of your income
2. Giving of 10% of your income
3. Reserving of 10% of your income (for making cash purchases instead of credit)
4. Paying expenses with the remaining 70%
As you can see, this plan is simple and to the point. Now all you have to do is set aside ONE day every month to allocate your monthly earnings into these categories. This will help you learn how to manage money without having to focus all your energy on monitoring your budget, filling in spreadsheets and trying to balance your spending categories.
Instead, you take one day out of the month to pay all your expenses (you can place all your cash in envelopes for things like food shopping) and to make your investments, your charitable giving and set aside your cash reserves. You can also use this day to assess your financial situation on a monthly basis and make sure you’re on track to achieving your long-term plan.
Getting Started With Wealth Building
Once you get control of your cash flow using the above system, you’ll discover that you have more money to use for building wealth than you originally thought. Your next step will be to get rid of as many things as you can which are causing a negative cash flow. This means paying off your debts. After all, if you have debt which is costing you an 18% interest rate, there’s no point in making an investment which is only earning you 15%.
Learn to manage your money and get rid of the debt first, and building wealth will come much easier.
Before you spend any more money, download this FREE report on how to manage money. Discover the simplest way to achieve financial freedom through the use of Powerspending.
Frederick W. James MD is both a seeker and teacher of balance. Keeping in mind the understanding, “There is always something to learn,” Dr. James knows life, like finance, is a balancing act that needs constant attention. This is the foundational thought of his behavioral philosophy that secured his wealth and guarantees it for others. After years of preparation, the career cardiologist created wealth to benefit his family and others. Now, this innovative system of responsible spending is available to all through his financial coaching program and book, Spend, Don’t Save.
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