Your Financial Foundation.....
I see the challenges and obstacles most people face, and I see the struggle to try and keep up with rising costs. It’s a losing battle for many, and for those who aren’t losing, they’re doing all they can just to keep their head above water.
The tipping point for most people is just one missed paycheck away. So many people live pay to pay that one unexpected major expense can cause a big problem financially. I see it with my clients, and I see it with my tenants. My experience is real, and it’s daily.
If you learn nothing else today, I hope you will learn this critical lesson. IT IS UP TO YOU, AND YOU ALONE, TO CREATE A SOUND FINANCIAL FOUNDATION.
If YOU don’t do it for yourself, who’s going to do it for you? Your friends? Your boss? Your government?
What exactly is a sound financial foundation anyway? Why do you need it?
During my meetings with my clients, I’ll often ask them if they can explain the difference between savings and investments. Some can, some can’t.
So I ask them, when they have money in a savings account or money market, what direction can their account balance go? Up, and only up.
When they have their money in investments, what direction can their account balance go? Up OR down.
So if you have ALL of your money in investments and those investments tank (not that that’s ever happened!) what have you got left? Nada! Part of the challenge is that most people never consider that they might lose money on their investments. They just assume that they'll make a profit and the only question is.....how much! It's just too bad that more people lose than win.
Your financial foundation is WHAT YOU CAN ABSOLUTELY, POSITIVELY, GUARANTEED, count on to be there for you NO MATTER WHAT HAPPENS TO YOUR INVESTMENTS.
Different financial advisors have different amounts they suggest you keep in your foundation. Some say 3 months worth of expenses. Others say 6 months. I’ve seen those that suggest at least 1 years worth of expenses or more!
No matter what you decide is best for you, it’d better be at least 3 months worth of expenses. So if you’re monthly nut is $5,000, you NEED to have at least $15,000 socked away somewhere safe where you can count on it to be there JUST IN CASE.
Because you know what? JUST IN CASE happens to people ALL THE TIME. And the ones who have a sound foundation manage through their crisis without any problems, while the majority fall further behind in the game, ruin their credit, and eventually lose everything and file bankruptcy.
The key to your financial success in life is in the creation of sound money management skills. Unfortunately, most of us have never been taught good money management skills. As a result, most people are COMPLETE AND UTTER FAILURES at managing their money. I see a few who are winning the money game, but by far the vast majority are losing the war.
Make it a top priority for you to dedicate the time to learn to become a money management expert! You’re going to have to deal with money for the rest of your life. You might as well learn how to play the money game to win.
If that sounds good to you, you are at the right place right here with my blog. The principles and ideas you’ll find here have stood the test of time, and will take you from a life of struggle to a life of abundance. I practice all of these techniques, and have for decades. They have brought me success on a scale I never thought possible. I hope they can do the same for you. It’s entirely up to you.
Namaste.
Jeff
Labels: financial freedom, money management, success