The Money Management System That Beats Them All (Part 6)
Have you been reading the news lately?
The real estate boom is over, at least for now. In fact, many experts predict that we’ll see a drop in home prices in the next while as all those who bought with little or nothing down and financed it with adjustable interest rate mortgages see their payments become unaffordable.
The stock market continues to be a roller coaster ride. It’s taken over 5 years for the Dow to get back close to it’s levels of 2000, and the NASDAQ isn’t even close to returning to those values.
Social Security and Medicare are expected to become insolvent in our lifetime. Depending on either for your future needs is a sure way to find yourself in financial jeopardy.
We have a negative savings rate in this country. What that means is on average, we spend more than we make, and we go further and further into debt every month.
More and more jobs are now being exported to other countries. Call AOL for help, and you’ll be talking to someone in India! Outsourcing has become a huge industry, and I’m talking about jobs leaving the country.
There has never been a greater need in this country for individuals to learn how to become excellent money managers and take control of their financial lives.
The money management system you’re learning here can be a lifesaver for you. Here is the last piece of the puzzle.
The final account in this system is the GIVE account. From this day on, you will put 5% of all of your earnings into this account.
If you’ve been raised to give 10%, or if you prefer to give 10%, you most certainly can. In that case you will reduce your necessities account from 55% to 50% of your earnings.
So, for every $100 you earn, either $5 or $10 will go into your GIVE account.
You give to your church or temple or favorite charity. You can give to someone in need. And if you can’t afford to give money, give your time. But this is an absolute necessity.
The more generous you are at giving, the more you will end up receiving. That’s just how it goes. Helping your fellow man, and the organizations that are important to you is critical to your financial success.
That’s the system. It’s been proven to work by thousands of people who are successfully using it to create financial freedom for themselves and their families.
To recap, you will begin immediately to allocate your funds into 6 or 7 accounts every time you receive any money. If you are paid “gross”, and haven’t had taxes taken out, your 7th account is your “Tax” account. You will want to put at least 20% of your gross income into this account as soon as you receive your money. That way, when it’s time to pay taxes, you’ve got an account specifically set aside for taking care of it.
Once you’ve got your taxes taken care of, you will automatically allocate your money into each account immediately.
10% goes into your FFA account. This is your Financial Freedom Account, and it is designed to create your “Golden Goose”. Over time, with the proper planning, your FFA account will provide you with PASSIVE INCOME, and you will become financially free. You will never spend this money, ever. You will live off of the income it provides.
10% goes into your LTSS account. This is your Long Term Savings for Spending Account. You will use this account to save for your larger planned purchases. Remember when you were younger and were told that if you wanted something you needed to save for it. Somehow as we became adults, we kind of forgot that. Well, this is a reminder, that that way is the way. You can have multiple LTSS accounts. One may be a “contingency” fund, so that in the event of an unexpected need for money, it’ll be there for you. Another may be to pay off your debts. You’ll have LTSS accounts for vacations, or appliances, or to save up for a down payment for a house. You get the picture.
10% goes into your Education account. It is critical that you begin now to invest in yourself. This money is earmarked for books, audio programs, seminars, coaching. It guarantees that you are constantly adding to your skill sets and providing more value to those you serve, therefore increasing your earning power.
50% or 55% will go into your Necessities account (depending on how much you intend to put into your Give account). This account takes care of all of your regular monthly expenses, including your rent or mortgage payment, utilities, food, gas, insurance, clothes, etc. What if you can’t live on 55%? SIMPLIFY! Simplify your life and get down to this level. If you don’t, it is 100% guaranteed that you will lose the money game. Make sure you play to win!
10% goes into your PLAY account. Just as you have 10% in your FFA for the long term, and is the responsible thing to do, you need to have 10% reserved to enjoy the now, and experience the finer things in life today, not in 20 years from now. This account allows you to be extravagant, get a taste of the good life, and makes certain that you take the time now to enjoy yourself and have fun. You must spend this money on something special, something that you would normally never consider treating yourself to. Preferably, you will spend this money every month, but if you want, you can save up to 3 months for something extraordinary. But within 3 months, everything in this account has got to go.
Finally, 5% or 10% will go into your GIVE account. This is an essential part of creating your financial success. While it may not make sense to you now how giving money will make you financially successful, trust that it is the truth. You can give your money, you can give your time, or you can give both. And be sure that when you give, you give with a generous heart. Be glad to be in a position to give, and do it with joy.
Remember, the one thing in common that all financially free people have, is that they are all excellent money managers. They have a system. Without having to think, they automatically do the right things with their money.
Today, there’s a best selling book called the “Automatic Millionaire”. It’s called that because becoming financially free can be automatic if you develop the right habits and do them over and over again. You don’t think, you simply do.
When it comes to your personal financial health, nothing you will ever learn will be more powerful or have a greater impact on your financial life than this money management system. Learn all you want about business, real estate, stocks, bonds, marketing, negotiations, etc. None of them will have any effect on you until you change your financial blueprint.
This money management system will change your financial blueprint for life. If you truly want to become financially free, study this system. Go back to the previous posts and make certain that you understand each account and why you need to use them. Adopt this system. Practice it. Most important….DO IT!
Namaste.
Jeff
The real estate boom is over, at least for now. In fact, many experts predict that we’ll see a drop in home prices in the next while as all those who bought with little or nothing down and financed it with adjustable interest rate mortgages see their payments become unaffordable.
The stock market continues to be a roller coaster ride. It’s taken over 5 years for the Dow to get back close to it’s levels of 2000, and the NASDAQ isn’t even close to returning to those values.
Social Security and Medicare are expected to become insolvent in our lifetime. Depending on either for your future needs is a sure way to find yourself in financial jeopardy.
We have a negative savings rate in this country. What that means is on average, we spend more than we make, and we go further and further into debt every month.
More and more jobs are now being exported to other countries. Call AOL for help, and you’ll be talking to someone in India! Outsourcing has become a huge industry, and I’m talking about jobs leaving the country.
There has never been a greater need in this country for individuals to learn how to become excellent money managers and take control of their financial lives.
The money management system you’re learning here can be a lifesaver for you. Here is the last piece of the puzzle.
The final account in this system is the GIVE account. From this day on, you will put 5% of all of your earnings into this account.
If you’ve been raised to give 10%, or if you prefer to give 10%, you most certainly can. In that case you will reduce your necessities account from 55% to 50% of your earnings.
So, for every $100 you earn, either $5 or $10 will go into your GIVE account.
You give to your church or temple or favorite charity. You can give to someone in need. And if you can’t afford to give money, give your time. But this is an absolute necessity.
The more generous you are at giving, the more you will end up receiving. That’s just how it goes. Helping your fellow man, and the organizations that are important to you is critical to your financial success.
That’s the system. It’s been proven to work by thousands of people who are successfully using it to create financial freedom for themselves and their families.
To recap, you will begin immediately to allocate your funds into 6 or 7 accounts every time you receive any money. If you are paid “gross”, and haven’t had taxes taken out, your 7th account is your “Tax” account. You will want to put at least 20% of your gross income into this account as soon as you receive your money. That way, when it’s time to pay taxes, you’ve got an account specifically set aside for taking care of it.
Once you’ve got your taxes taken care of, you will automatically allocate your money into each account immediately.
10% goes into your FFA account. This is your Financial Freedom Account, and it is designed to create your “Golden Goose”. Over time, with the proper planning, your FFA account will provide you with PASSIVE INCOME, and you will become financially free. You will never spend this money, ever. You will live off of the income it provides.
10% goes into your LTSS account. This is your Long Term Savings for Spending Account. You will use this account to save for your larger planned purchases. Remember when you were younger and were told that if you wanted something you needed to save for it. Somehow as we became adults, we kind of forgot that. Well, this is a reminder, that that way is the way. You can have multiple LTSS accounts. One may be a “contingency” fund, so that in the event of an unexpected need for money, it’ll be there for you. Another may be to pay off your debts. You’ll have LTSS accounts for vacations, or appliances, or to save up for a down payment for a house. You get the picture.
10% goes into your Education account. It is critical that you begin now to invest in yourself. This money is earmarked for books, audio programs, seminars, coaching. It guarantees that you are constantly adding to your skill sets and providing more value to those you serve, therefore increasing your earning power.
50% or 55% will go into your Necessities account (depending on how much you intend to put into your Give account). This account takes care of all of your regular monthly expenses, including your rent or mortgage payment, utilities, food, gas, insurance, clothes, etc. What if you can’t live on 55%? SIMPLIFY! Simplify your life and get down to this level. If you don’t, it is 100% guaranteed that you will lose the money game. Make sure you play to win!
10% goes into your PLAY account. Just as you have 10% in your FFA for the long term, and is the responsible thing to do, you need to have 10% reserved to enjoy the now, and experience the finer things in life today, not in 20 years from now. This account allows you to be extravagant, get a taste of the good life, and makes certain that you take the time now to enjoy yourself and have fun. You must spend this money on something special, something that you would normally never consider treating yourself to. Preferably, you will spend this money every month, but if you want, you can save up to 3 months for something extraordinary. But within 3 months, everything in this account has got to go.
Finally, 5% or 10% will go into your GIVE account. This is an essential part of creating your financial success. While it may not make sense to you now how giving money will make you financially successful, trust that it is the truth. You can give your money, you can give your time, or you can give both. And be sure that when you give, you give with a generous heart. Be glad to be in a position to give, and do it with joy.
Remember, the one thing in common that all financially free people have, is that they are all excellent money managers. They have a system. Without having to think, they automatically do the right things with their money.
Today, there’s a best selling book called the “Automatic Millionaire”. It’s called that because becoming financially free can be automatic if you develop the right habits and do them over and over again. You don’t think, you simply do.
When it comes to your personal financial health, nothing you will ever learn will be more powerful or have a greater impact on your financial life than this money management system. Learn all you want about business, real estate, stocks, bonds, marketing, negotiations, etc. None of them will have any effect on you until you change your financial blueprint.
This money management system will change your financial blueprint for life. If you truly want to become financially free, study this system. Go back to the previous posts and make certain that you understand each account and why you need to use them. Adopt this system. Practice it. Most important….DO IT!
Namaste.
Jeff
posted by Jeff Fagin at 4:04 PM
3 Comments:
Jeff,
This is one area that is near and dear to my heart. When I got sick, I can't tell you how many people gave time and or money to help me. I love being able to reciprocate.
Jeff
Giving has its own rewards...felt mostly within.
Larry E.
Great system. I need to go over my current accounts and catorize them. I seem to have one account for 2 functions.
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