This ezine’s original focus used to be about financial freedom. I was (and still am) passionate about cash flow and investment strategies. I believe as an entrepreneur you should make money doing what you love, in a way you love doing it and use your profits to create more wealth. I asked my mastermind partner and financial fitness expert, Dr. Tony Pennells, to help you create wealthy habits. Step #1 will change your profit mojo immediately!
Meet Michelle: A hard working mother in a two-income family with a nice home and a great life. On the surface, that is. In reality, Michelle has a problem, and it might be one you have too! She has chronic Money Stress, because she works hard but never has enough. Like everyone, Michelle wants options. She wants to be able to choose whether to work and to have enough money to support her family after retirement. She wants Financial Freedom, but she’s not Financially Fit! Michelle is trapped by her finances in a life she can’t sustain.
Michelle is making the same mistake that 96% of people make … she’s not practicing the Four Money Principles. These principles are what the 4% of the wealthy understand and practice every single day. The Four Money Principles are a simple way to approach building your Financial Fitness and achieving Financial Freedom!
1. Paying Yourself First
Michelle’s primary mistake is not paying herself first. When she gets a paycheque, her money immediately disappears. In the end, there’s nothing left to put away for the future or emergencies.
The 4% always follow this principle. Don’t think you have any spare money to save? Take a look at your spending. You’ll be surprised at how much of your money actually goes to Wants rather than Needs. This is the money you should be saving for your future. Even if the amount you’re saving is small when you start out, you must get into the habit of Paying Yourself First!
But in order to Pay Yourself First, you need to Live Within Your Means.
2. Living Within Your Means
One of the reasons Michelle has Money Stress is because she spends more money than she brings in. Living Within Your Means is the most important component of achieving Financial Freedom.
Living Within Your Means starts with understanding the difference between what you NEED and what you WANT. Take a hard look at where your money is currently going and make the choice as to where you want it to go. Armed with this knowledge, you can take action and develop habits that save you money … allowing you to live within your means. Start improving your life by controlling your spending!
After learning the first two Money Principles, you’ve thought about your finances now and in the future, but what happens if there’s an emergency?
3. Protecting Yourself
Michelle often worries about what will happen if she loses her job or if there is an emergency. Since she has no safety net in place, she would quickly be in trouble. You can’t count on life being perfect, and you don’t want to be held hostage to worry. This is why the third Money Principle is Protect Yourself.
The first step to Protecting Yourself is to build an Emergency Buffer that will give you some leeway to deal with an immediate crisis. Ideally, you’ll have enough in your Emergency Buffer account to cover most major costs. To truly Protect Yourself and cover any gaps, the second step is to make sure you have proper insurance protecting your family and assets until you reach Financial Freedom.
Living paycheque to paycheque leaves you constantly on the verge of catastrophe. It’s important to set up a safety net so that so that when challenges do occur, you’ll be ready. You can’t really be free unless you Protect Yourself!
So once you have your finances under control, how do you grow your money and achieve Financial Freedom?
4. Making Your Money Work for You
Michelle works hard for her money, but she doesn’t do what she needs to do to be truly Financially Free. She doesn’t send her money out to work for her.
The 4% don’t work for their money, they reinvest their earnings, so their money works for them. When you are genuinely Financially Free, your investments earn enough money for you to live off and pay your bills. You can live your dreams without sacrificing your future.
You may be concerned about what to invest in. Do research and educate yourself. Always buy quality investments, and invest in different types of opportunities. Don’t put all your eggs in one basket! Make sure you correlate your investments so regardless of how the economy is doing, you’re not at risk.
You may also feel like you don’t have the resources to invest or that you need a minimum amount to get started. That’s not true! It’s never too late or too early to invest.
That’s it! Those are the Four Money Principles. Let these principles guide you, and your Money Stress will disappear!
No one is born knowing how to be Financially Fit or how to achieve Financial Freedom. But by following these four simple steps, you will take control of your finances. Your future isn’t set in stone.
Choose Freedom! Release money stress in your life with this FREE training that will allow you to escape the time for money trap for good. Grab a seat here.