Understanding your financial status is the initial step to your financial success. There are a lot of ways to know your financial status but I have derived 3 effective ways to consider in attaining financial success.
1. Beware of your Assets And Debts
Whenever I sit with my clients. The first question to ask how whats going on with your finances? Where assets should be higher than your debts. Because your assets are define by how much money you earn whether it is liquidated or unliquidated. Your assets could be, house, real estates, car, vehicles, insurance policies with cash values on it, jewellery are few of the assets you can consider. Debts, however, is the amount of money you awe from the banks or lenders.
2. Know your Income And Expenses
The easy way to get a higher income is to get a good and decent high paying job. Whether money that works for you or money that somebody is working for you will measure your income that goes into your bank account.
When I went out of college, the goal is to land a high paying job that would give us a higher income in order to have financial success. The income you generated could be derived from your personal salaried income or the income that is generated from your business.
Your expenses, however, are the items that you incur in order to finance your operations. The correct formula to savings and investment when it comes to expenses is:
Income – Savings = Expenses
3. Choose your Financial Tool
The key to a better financial planning is to proper allocate of your income versus your expenses. As a result, when you have allocated each asset you have now the option to chose the right tool to help you with your financial planning.
Furthermore, grow your income while you are sleeping. Use different tools available in the market to keep it growing. Similarly, when I started investing, I used
While you are preparing for your proper knowledge you can also use some other tool such as VUL type of investment and insurance infused into one product. In this product, you don’t need to worry about how your money would grow, as long as you choose your preferred risk appetite on your fund allocation.
Above all, in order for you to get off the guilt feeling when you feel like you are drowning out of your financial planning. This may not be true to all but because I have experienced it myself I would like to share it with you. The first step that I do in gaining my good financial planning is to separate the portion of my income and giving back into tithing. When I started this formula I never regret the lose on my investments and income. The mindset is there is somebody above providing for everything that I have, by doing this mindset you have a higher view on handling money daily.
Income – Investments(Tithes) = Expenses
Knowing your financial status today only means that you acknowledge your number base on your income, investments versus your expenses. Acknowledging those 3 things is one thing, but applying is another thing. We have to do something here!
There is a commonality of this behavior to the idea of managing your physical body. When you doctor addresses your weight as the source of your obesity, he advises you to get well and do exercises every day. It is the same way with your finances. When your expenses do not equate to your income, you must do something to stop your excessive spending. In this way, you will make it right!
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