DYNAMICS OF FINANCIAL FREEDOM (Part 2)

Welcome back to the Dynamics of Financial Freedom Series.
Read the Dynamics of Financial Freedom (Part 1) via http://tinyurl.com/hz7e9es

ii. Managing Money

The progressive pathway to financial freedom is in your ability to manage the funds you earn or given as gifts.I am pretty sure you have heard the idiom that states 'Cut your coat according to your size' which simply infers that you must learn to live below your means with the intent to expand your means.
This phrase actually contains two lessons.


The first is that regardless of our income, we should always manage our expenses properly.

Remember, the goal should be to ultimately be able to save almost 80% of our income.
But there is also a second lesson here. That we should pursuit the goal of expanding our
means i.e investing your idle funds for larger profits to cater for additional expenses.
The game of wealth is not won by always playing defense (minimizing expenses and not wanting to take risks. At some point, we have to go on offense (creating explosive income).
As human beings are finite entities, having limited amounts of energy and attention. For this
reason, our focus should be on the things that will eventually have the larger positive return for
us.
In the long run, it is much more effective to put our focus on building assets and achieving high
income.
When you get an increment in salary or profit, do not allow the canker-worm of luxury eat deep into your mind. Stay on the existing expense level before the increment which gives you opportunity to invest more funds thereby enabling you buy anything out of the profits made from the venture.
you can either get the services of an Accountant to help you manage your money or learn the art of Budgeting which will help you prioritize your spending.
Start with the basics. You need to track all your money coming in (your total income) and everything going out (your fixed expenses and your discretionary spending). Once you know what your money is doing, you can set up a budget to help keep you on track from month to month. From there, you can determine what you’ll contribute to savings and investments. Make those transfers automatic.
My Free Gift is an e-book for Increasing your Financial IQ on Financial Intelligence by Robert Kiyosaki.
Drop your e-mail in the comment box to get your copy.

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