Tuesday, March 6, 2018
My 6 Point Focus on Wealth
We all have things that interest us in life. The main purpose of proper financial planning is so that you can live your life the way you wish, not the way you have to. Being successful with money will translate into being successful with life, no question about it. Love, friendship, and health will all come easier when you have your finances in order. I like to focus on the fundamentals of personal finance. I believe once those are taken care of, most of the rest will fall into place. In today’s post, I am going to discuss my 6-point focus when it comes to financial planning. These are the areas in which I aim to assist my client’s within their financial journey’s. Let’s take a look at what makes me tick.
1) Cashflow
Obviously with a website named Budget Boss, one of my main focuses will be cash flow. Having a positive monthly cash flow is absolutely necessary to do anything in life. I cannot stress that enough. Not having a positive monthly cash flow will lead to debt and debt leads to interest payments that hurt your monthly cash flow even more. You cannot save a dime if you run a negative every month. You cannot make large purchases if you have no savings and are in debt. You can not have a complete financial plan if you are not growing your net worth and accumulating wealth. It is that simple and it all starts with how you spend your money every day. Think about that next time your friends ask you to join them for lunch.
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2) Savings and Investing
I cannot emphasize more how important saving your money and investing it for growth is. Inflation eats away at your money every year. While I am typing this 6 more establishments just raised their prices. You have to put money away on a regular basis and you have to invest it for long-term growth. Goals like home ownership, leisure activities, and retirement will be out of reach if you don’t save a dime. For those with little wealth, cash investments have far too little of a return to get you to your goals. Having a basic understanding of the market will allow your money to work for you and then you can develop a passive income stream if you so choose. This is only available to you if you take the first step of saving a proper amount every month.
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3) Homeownership
We all need to live somewhere. Home ownership is not for everyone, but it can be. It is important to understand how where you live affects your financial future. Owning a home is a beautiful thing. When you own your home, you have freed up a large portion of cash flow to go towards your goals and dreams. This will help you accomplish great things in life like saving for the future and retiring comfortably. It is important to understand how where you live fits into your financial plan. Owning a home can be a blessing but paying a mortgage can be a curse. If you own too much home for your income, you have caused more harm then good. If you can only afford to pay a mortgage and not much else, it is important to understand how that affects your future goals. Your home should be a valuable part of your financial plan so let’s make sure that is the case.
4) Life insurance
I talk about life insurance like it was clean underwear. It easy to do and we all should have it. I cannot stress enough how important life insurance is to any financial plan. While you might not think you need it today, you definitely will need it tomorrow. This week I met a man who has stage 4 colon cancer. While he is battling this disease, he is also about to retire. The sad truth is that he will be losing the group life insurance from his work in 2 months. His last year or so on earth will be spent thinking about how his family will continue without him instead of knowing they will be secure moving forward. That is some scary shit. You often don’t think about what you might need, until you desperately need it. That is why I, a single man with no children, have life insurance. That is why I believe everyone should. If you need life insurance today, there is a good possibility you are sick and can’t get it. It is not about today, it is about what tomorrow brings. The truth is we don’t know what will happen, so we take the steps today to secure our future.
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5) Health and Disability protection
Ever been off work because you were too sick to go in. I have. Ever not been able to afford your medication because you didn’t have enough money to eat. I have. This area is a focus of mine because I know what it is like to choose between rent and medication. I know what it is like to go to work before doctor’s orders because I could not afford not to. We must make sure that at least our minimum expenses are covered should we get sick or hurt. Not doing so could literally ruin our lives. I was lucky enough when I was younger that I didn’t have much of a life to ruin by being sick. I worry for those who have families and loved ones who depend on them. This form of coverage can be the make or break between securing your dreams and not. Some worry that they will never use the coverage and it will be a waste. If you never claim on health or disability insurance, congrats you are healthy, you win. You lost nothing and gained everything. I know dozens of people that wish they were you, such as myself.
6) Opportunities
In the industry I am in I see opportunities present themselves all the time. The people who are able to capitalize on those opportunities are the ones who have taken the steps to prepare for the future. Do you want to buy a rental property in the future? Do you want to start your own business? Do you want to change careers and do something you are passionate about? Do you want your children to go to college and not have to worry about tuition like you did? None of these are possible if you do not prepare. Taking advantage of opportunities is the fun part of financial planning. It is the cherry on your sundae. The whipped cream on your hot chocolate. You do not want to be the one saying, “Well if I had the money, I would have done that.” Having your money make money for you is priceless. Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.” Sounds pretty intense, but it rings true. The ability to take advantage of opportunities is what separates the wealthy from the poor. Give yourself a fighting chance.
I absolutely love finding creative ways for people to save money. I also love when my clients make money off their investments and feel the security of protecting their family. I focus on these 6 areas because they are the foundation of any solid financial plan. They hold the key to your success. If you can put a checkmark next to each of these areas, you will experience a freedom you wouldn’t believe. It will truly be a thing of beauty.
Thank you for tuning in today as we continue with Anniversary Week at Budget Boss. Don’t forget to tune in tomorrow when I discuss my Credit Score Story. If you would like to have a personal financial assessment please do not hesitate to contact me at joe@budgetboss.ca. have a great day Bosses!
“Wealth consists not in having great possessions, but in having few wants.” – Epictetus
Email – joe@budgetboss.ca
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