Financial Planning - Where to Start

One of the best journeys to embark on in life is the financial planning journey. The moment you decide to include financial plans into your daily routine, you would have simplified the journey. It can be very hard to start the financial journey but this journey could one day lead you to a destination called financial freedom. Here are the six best tips to help you plan for your finances accordingly and set a pace for financial freedom;

1. Repay your debts - One of the key aspects that may easily impede your financial plans is a personal debt, especially credit card debt. The personal debt might start at a small level but it might soon grow into a huge debt because you failed to reduce the debt on a regular basis. Planning for your finances means you have a good plan and settling your personal debts should be the first objective on the plan. The key advantage of repaying and reducing your own debts is that it allows you to save the money and invest for the future. In addition, your living costs go down because you do not have further debt repayments to undertake.

2. Start making investments - This is a crucial principle. Financial planning means you are saving as you plan for the future; hence, you will possibly use your current cash to purchase long term investments. Some of the areas you could invest in are bonds, the stock exchange, and many others. If you save your money with the help of financial management and proper discipline, you will certainly be able to grow your nest egg.

3. Set goals - Research shows that many people do not save because they lack goals for their future. With no goals in place, nothing will motivate you to defer current spending and save for a brighter future. Take your time to create concrete goals, which could be a new car, a new house, a vacation, or perhaps a change of career.

4. Spend less than your earnings - It is easy to understand this principle but hard to implement it. This is because most people purchase new stuff and want the greatest and latest phone, television set, etcetera without pondering about the long-term repercussions. However, if your expenditure exceeds your earnings, you cannot make head ways financially. To add insult to injury, a large score of folks actually  spend more than their earnings and fund the same using personal debt. This is not sustainable, at all. It will simply end up badly, which brings us to the next tip.

5. Know where your earnings go - Many people struggle with budgeting yet this is a crucial financial concept. If you do not know where the money is going, you will hardly save. The moment you know how you spend your income, you will be able to influence all your spending. You should create a record of all incoming money and any expenditure. At first, it can be hard to achieve this, but it will get simpler with time. It is after you know where the money is going that you will be in a position to make priorities in your expenditure and make sufficient savings for your future.

6. Save before spending - Before you pay your normal bills, purchase groceries, or carry out any other thing, set aside a portion of the income. Do not forget the rule of thumb to pay yourself first. You can start small by say setting aside 5 to 10 percent of your monthly earnings. You can then raise your savings over time. Nonetheless, it is important to know that savings are not adequate unless you channel them into feasible investments.

Courtesy :

http://www.smartguy.com

Being Wealthy Vs. Being Rich

Being Wealthy Vs. Being Rich

by JPM on September 1, 2011

From a pure financial point of view, you are rich when you have enough money to buy nearly everything you want today as well as in the future. However, you are wealthy if you have enough money to buy everything you want today as well as in the future, and still have a great deal left over. (Read that again!)

Here’s what you’ll learn:

• Wealth – it’s all relative, read the story below to see why!
• We’ll also take some lessons from the richest man who ever lived.

Generally, and this is what I agree with, the word ‘rich’ refers to money, whereas ‘wealth’ refers to something more than just money i.e. all the essentials in life – a total package of love, good health, good living, good job, great friends and loving family, spirituality, joy, peace of mind, plenty of time, combined with money and contentment with yourself and what you have. Being wealthy depends on what YOU believe is enough to make you happy, the amount is not the key.

For simplicity sake, we’ll assume wealth to refer to worldly wealth – not just being rich, but other areas of wealth, spiritual, emotional, physical – all inclusive in the pursuit of happiness! (Please do watch the film, The Pursuit of Happyness – it’s really worth it!)

It’s all relative.

Imagine this – you’re an educated person from an urban city, a well-paid professional. You’re on a trip to a rural place far off in Africa to set eyes on the un-spoilt surroundings and on your way, you meet a tribal leader, respected by all the locals and you talk with him in a newly-created sign language and help of a guide.

During the conversation, the leader shows interest to know more about you, your country and how wealthy you are – a matter of curiosity for him – a person from such a far off place to come and see him must have a lot of wealth!

You explain to him that your assets include – two homes, an excellent job, latest car, a professional camera that you are holding – showing it to him. The leader nods his head in acceptance and then frowns in disappointment and looks to the other elders sitting on the left and right, and starts a discussion with them. The guide looks at you, and tells you that the leader thinks you are extremely poor, because you have no cattle, not even one! Wealth is measured by everyone differently; each person has his/her own way of deciding how wealthy they are. Across countries and economies, what might be a luxury for some is not for others.

That’s wealth – it’s relative!

Someone once told me that the difference between the rich and the wealthy is that the rich need to impress and the wealthy need to be impressed. In a way it does seem to be true. I know of many friends who in order to keep up with the crowd or stand apart – try to impress us, they drive fancy cars, live in a fancy house, wear fancy clothes and eat at fancy restaurants – anything to show that they are well off.

The rich become flush with money in a number of ways. They may inherit it, earn it in a few short years as a professional sports player or entertainer, or invent a new technology that is worth millions of dollars, or simply earn it over many years as a professional or a business owner or even, because they are lucky, win a lottery. So with all this money, they buy assets, generally those that depreciate fast.

On the other hand, wealthy people buy assets that can be converted to other assets i.e. value-creating assets. Those assets can be tangible like your business, your second house and intangible, like your knowledge, skills or even peace of mind!

The difference between a wealthy person and someone who is simply rich is that a wealthy person has sustainable wealth. A wealthy person will always be wealthy, because he is planning for generations, whereas someone who is just rich will only be so for a short period of time until the money is exhausted.

So the question is, not how to become rich, but how to become wealthy?

Wealthy people know how to make money. Once you have the know-how, you can build sustainable wealth. Wealthy know that money comes and money goes – it’s not a big deal. But they also know how to generate wealth, when it’s gone.

The best example is written down in history, by the richest man who ever lived. He obtained his wealth through knowledge and valued knowledge more than wealth or money. That man was none other than King Solomon. He was extraordinarily wealthy, even by today’s standards. But he was also extremely wise, the wisest who ever lived.

When he first became king, when God asked of him what he wanted, he asked not for riches, but for knowledge and wisdom. And throughout Solomon’s writings (please read the Proverbs, there is one chapter for each day of the month), he lists wisdom and knowledge as the two most important gifts to ask of God. God gave wisdom and knowledge to help create Solomon’s great wealth.

You can have a billion or even a trillion dollars today, but what assurance do you have that you live a life free of sickness tomorrow – or God forbid, even be around on this earth!?

Let’s admit it… money does matter. But wisdom and knowledge can create far greater wealth for anyone who desires it. Are you ready to become wealthy?

Rich vs. Wealthy: The BIG Difference

Rich vs. Wealthy: The BIG Difference

Is There a Difference Between Being Rich and Being Wealthy?

I have often thought over the past couple of years about the difference between being rich and being wealthy. Is there a difference? If so, what is it? And how do we become wealthy?

It seems to me that there is a big difference between being rich and being wealthy.

When I think about someone who is rich, I think about someone with a lot of money. And I typically think about someone who is quite showy with their money. They drive fancy cars and live in a fancy house. They wear fancy clothes and eat at fancy restaurants.

Rich people come into their money in a number of ways. They may inherit it. They may win the lottery. They may earn it in a few short years as a professional ball player or entertainer. Or they may invent a new mousetrap that is worth millions of dollars. Or they may simply earn it over many years as a professional or a business owner.

But doesn't this also describe a wealthy person? Is there really a difference? I believe there is a major difference between rich and wealthy. The difference is in duration. How long does the money last? Will it be gone once the person's earning power is gone? Will it be passed on to future generations?

What's the Difference Between a Rich Person and a Wealthy Person?

The difference between a wealthy person and someone who is simply rich is that a wealthy person has sustainable wealth. In other words, a wealthy person will always be wealthy, whereas someone who is merely rich will only be so for a short period of time until the money is gone.

Think about people in history who everyone would consider wealthy, and you can begin to see what I mean. The Rockefellers, Carnegies, and Campbells are all wealthy families. Their wealth has lasted multiple generations. Why is this? What makes them so different from the lottery winner or professional athlete who has money for a short time and then it's gone?

Rich v. Wealthy: The Big Difference

The difference between rich and wealthy is very simple.

It's knowledge. Wealthy people know how to make money. Rich people only have money.

Once you know how to make money, you can build sustainable wealth. The money never stops coming. If you have a reversal of fortune, it's not a big deal. You just make it back.

Think about Donald Trump. Several years ago, Mr. Trump was deeply in debt. But, oddly, he didn't change his spending habits and didn't go away. Why not? Because Donald Trump understands how to make money. He is a wealthy individual.

Wisdom + Knowledge = Great Wealth

Wisdom and knowledge can create great wealth for anyone who desires it. Last week, a vendor of ours came to me and asked what he could do to create wealth. My immediate response was to learn everything he could about wealth.

Once he has the knowledge, then he can begin formulating a strategy and work with a coach to build the wealth. But the knowledge needs to come first. Otherwise, if we do happen to get rich, the money is not likely to last.

Article Source: http://www.abcarticledirectory.com

Written By: Tom Wheelwright

The Importance Of Money In Life

What were you taught about money as you were growing up? Something like "money doesn't grow on trees", or "money is the root of all evil", or maybe "all rich people are greedy"? 

Well, how do you expect to become a success financially if you believe these things? You attract into your life what are thinking about and what you believe. If you think there is not enough money in this world for everyone you will never have enough money. That is called the Law of Attraction.

First of all, believing that "money doesn't grow on trees" is an example of what's called lack or scarcity programming. Our parents taught us that there was never enough money to go around, and that it was not readily available or abundant. But in truth, the universe is very abundant, and there is lots of money to go around for everyone. Just think what you could do if you have so much money how much your heart desires. What wonderful things you could do with it: travel to the countries you have always dreamt of, buy a house you even scared to think about it, attend meditation classes so you could spiritually grow, donate money to your favourite charity, spend more quality time with your family and the list goes on.

The key is to start thinking that you deserve the money and that there is lots of it available for you, and then you can start attracting it into your life. That's abundance thinking, which is the opposite of lack or scarcity thinking. When you start thinking about the abundance the Law of Attraction will do the rest. You do not need to know how it is going to happen just make the first step, first thought. Starting is already winning.

And what about thinking that "money is the root of all evil"? Can you really expect to become a success if you believe that money is the root of all evil? Unless you have a desire to be an evil person, your subconscious will not let you have money if you believe deep down that it is the root of all evil. 

By the way, that quote is taken out of context in the first place. It was originally stated as "the love of money is the root of all evil". So it has nothing to do with the money itself.

Now that you understand that, you can start to think that money is in fact good. You can help people with money. You can stimulate the economy with money. Even the most kind-hearted spiritual person, who says they don't need money, can do more to make the world a better place with money than without it. 

And what about thinking that "all rich people are greedy"? Well, that creates us versus them, whereby you have labeled all of "them" greedy in your mind. You, on the other hand, are very giving in your mind. That's why you don't have money, because you're not greedy.

Sure, there must be some rich people in the world who are greedy. But there are also poor people who are greedy. There are both rich and poor people who are very giving as well. The amount of money you have has nothing to do with these character traits.

In fact, a lot of rich people got there by not being greedy. Having a giving attitude opens up a flow of money that often brings them more. You will find the same thing... give away money joyfully to a friend, and notice that it comes back to you in some other form. The world needs to be a balance of give and take, and being joyful both as you give and receive will ensure that you always go with the flow.

And changing your mindset from what you were taught as a child to a healthier view of money will allow you to become the financial success you deserve to be, to become real you. 

Courtesy : Rima Valunaite 

Welcome to the world of AMIT BANE WEALTH MANAGEMENT!!