5 Steps to Financial Growth
If you can’t manage $100 dollars, you will never be able to manage a million dollars. And if you can’t manage your money, you’re always going to be broke!
Chad Brown, @serialCFO
1. Learn how to manage your money
The percentage of people who live paycheck to paycheck is at an all-time high in this country.
The biggest problem is overspending. But the concept is really simple. Spend less than you make.
Spend $50, save $20, invest $30. If you’re not saving money for investment, you can’t let your money work for you.
2. Get discipline and remove emotional decision making
People don’t like telling their family no. So they let their child, or spouse, or parent spend money without discussing it. There’s a lot of spending that’s fulfilling entertainment needs for people.
People have a huge desire to be successful, but they confuse it with looking successful.
They’re concerned with looking successful and they think it revolves around the expensive things they have. But the real way to be successful is to have money you can invest and freedom to grow with peace of mind.
My two rules for removing emotion from purchases:
- If I’m going to spend more than $500 dollars in my personal life or business, I have to think about it for more than 24 hours.
- A good man will go broke on a good deal. Don’t buy anything that expires before you can take 24 hours to think.
75% of your whole life revolves around money. Money is one of the biggest aspects of everyone’s life but nobody spends money on education about money.
Numbers are black and white, they aren’t subjective. You can learn from history.
There is plenty of time in your life to carve out time to learn something and have a side-gig.
3. Set a budget and stick to it
So many people avoid budgeting because they don’t want to face the reality of how much money they do or don’t have.
Write out each month for 12 months what your expenses are. Write your revenue/income. What do you want it to be for the year? You have all your historical numbers, use them. Then take your total expenses, subtract them from your total revenue, and that’s your profit. No complicated formulas.
Is that profit number where you want to be for the year? If not, you need to change some stuff and you need to do it now. Put the thought and work in to figure out how to do that.
(If you need a software recommendation, I love Mint.com. It links with your bank account, tracks your spending, and follows the budget for you.)
4. Build your roadmap
Most of us are winning based on our Emotional Intelligence rather than our IQ.
Being able to dream a little bit about where you’re going and why you want to earn more money will fuel your ability to pursue the financial goal.
If you made $100,000 dollars apart from your current income in a year, what would your life look like? The number isn’t going to get you through the hard times but knowing the things that money will change in your life will enable you to leverage your emotions in your favor.
And what are some ideas that will make you that $100,000 this year? Write down 10-12 ideas to brainstorm. Anything goes, none of these are decided yet. When you’re done, look at all your ideas and find the three that are going to have the most impact for you hitting your goal? Those are your focuses for this year.
You have to do the work. Things don’t happen magically. You have to build the steps. Take your three items, then come up with five steps for each one. The steps are what will help you hit your goals, which then help you hit your number.
After all this, think of three things that are most likely to derail you from hitting that number. Anything in your personal or professional life, or anything logistical that could get in the way. Write them down and think every day about ways to avoid those things.
5. Invest
Invest in yourself. By investing in yourself you can build the control and network and systems that will help you reach your goals. You are the most valuable tool for your company.
Invest in people.
People are the most valuable, reliable investment out there. When you find people that are good investments, you can give value to people who understand value.
Then invest in all the other things.
You’ll never get wealthy working your job. Invest!
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Chad Brown @serialcfo
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