November 10th, 2008 — Debt, Diversification, Financial Security, Income Streams, Leverage, Money, Personal Finance
If you’re currently living paycheck to paycheck, or you would just like to have a little more financial security, the key is creating alternative forms of income. While to many people this means getting a second job, there are actually easier ways that you can start bringing in more money every month without having to do all of that work. One of the best ways to get started immediately is by leveraging your debt to create multiple streams of alternative income.
Now wait just a second - isn’t debt a bad thing? Well, in the hands of those that don’t know how to manage it, yes, debt can be a bad thing. However, when used correctly and for the right purpose, debt is the key towards obtaining a strong financial future. We’re not saying run out and run up all of your credit cards on stuff you don’t need and hope you’re going to get rich. That’s never going to happen.
What we are saying is that by leveraging your debt properly you can easily start making more money right away. So, let’s look at it this way. You can use debt to get that stereo you always wanted, but other than providing you with some entertainment, it’s not really going to be directly responsible for bringing in any money. It’s a dead end purchase when you get down to the heart of the matter.
Now, instead of spending $5000 on a new stereo, let’s say you get a loan for that amount. You then take that money and invest it into a new stock or a business opportunity that has a high likelihood of great returns. In a few months, that loan you got for $5000 has produced more than $15,000 in alternative income. That’s three times the amount of your original investment, and it’s only going to keep bringing money in. That’s a whole lot better than your stereo could ever do for you.
By managing debt correctly and using it to purchase smart investments or opportunities, you’re leveraging it to help create more income for you. That is not to say that there are not some risks in using your debt this way. It’s never a good idea to go into debt for something that is not going to pay off. You’ll want to take your time and carefully invest that money so that it will provide you with alternative income.
In order to make more money, you’re going to have to get more money. Now, most of us just don’t have a lot of free cash lying around the house. You can spend years saving up money to start producing alternative income, but it’s a lot quicker to get a jumpstart by leveraging debt. You just need to make sure that you’re being careful and that the opportunities you’re interested in will pay off. There is always risk involved when you’re creating alternative income streams, but it can pay off in the future.
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October 16th, 2008 — Financial Security, Goal, Money, Personal Finance, Wealth
Now that the Olympics are over, many people have been inspired to try harder, to live their dreams and to focus on their futures. These same feelings and motivation can be carried over to your financial life as well. There is no better time than right now to get your personal finances in order, and sometimes, looking at them in a different light can be very beneficial.
While you may not be able to win a gold medal for the best balanced checkbook, by looking at financial security as a race to glory, you may be able to reshape your financial outlook. In fact, you can even get some inspiration for developing a financial plan right from some of these Olympic events.
The key is figuring out whether you want to go for the gold, or whether you are happy to settle for silver, bronze, or even not placing at all. By developing a winning mindset, you can greatly impact your financial future. Sometimes, all it takes is looking at your personal finances a bit differently to get a better outcome. Let’s start with determining what “going for the gold” means to you.
1. Financial stability – For most people, going for the gold means being able to retire comfortably and not worry about money. In many cases, it will take an athletic-style push to get there, but with perseverance, the right training and a good effort, it can be achieved. When you look at financial stability as an event that you need to win, it may be easier to reach your long term goals.
2. The ability to buy whatever you want - For others, going for the gold may mean the ability to purchase anything their heart desires, without having to worry about it. If you are not already to that point, it will take a lot of hard work and financial effort to get there. If this is your goal however, you need to start training to make it. Decide how you will reach this point, whether it is through leveraging debt for a bigger return, or finally starting that side business you’ve always dreamt about, or any other means.
Whatever going for the gold means to you, write it down and begin to formulate how you plan to reach that goal. This will be your training program. Learn all that you can about personal finance, and take the time to be cognizant of your spending, how you budget and what paths you will be taking to get to your gold “medal.”
Just like the Olympics, going for gold financially may not be simple, but it is incredibly worthwhile. Even if you don’t have the world cheering you on, you can still reap the benefits that focusing on your finances can have for your entire future. If you want to be able to achieve those goals, it may mean going for the gold – even if that does require hard work and extra effort.
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September 1st, 2008 — Banking, Budget, Financial Security, Goal, Long Term, Money, Personal Finance, Wealth
Unless you’ve taken some courses on handling finances, there is a chance that you may not be aware of a few of the key points about budgeting, managing your money and planning for the future. While a lot rests on common sense, there are a few techniques that everyone can use to correctly manage their finances and stay on top of their bills. Let’s look at some of the best tips that you can put to use right now.
1. You need to pay yourself a salary.
Sounds a little odd, doesn’t it? However, setting aside a portion of your income every month that will go into savings is one of the first steps on the road to financial security. The best amount to put aside is 10% of your gross earnings each month, but this may not always be possible. Try to get as close to that number as possible and watch your savings grow!
2. Always have money in case of an emergency.
The problem with emergencies is that you never know when they will happen. From losing your job, to a car accident, to an unexpected repair bill, there are financial disasters lurking around every corner. To protect yourself, you need to create an emergency fund that will not be touched unless you have an actual emergency. We recommend putting about four months of your salary aside for this fund if possible, however, anything you can put aside for a rainy day will be useful.
3. Always have a budget.
Even if you’re not restricted on your spending, you may need to be. Everyone can benefit from a budget and chances are, you’ll end up spending less every month. Take a hard look at your regular monthly expenditures and see where there is room for improvement. You should always have at least some money left at the end of the month, so aim for this goal when making your budget.
4. Paying your bills on time really does matter.
Even if your phone company doesn’t report late payments to the credit reporting agencies, this doesn’t mean that you should be late. Paying your bills on time forms a good habit and it will last throughout your life. Work your payment dates into your budget so that you always have enough put aside to handle all of your bills. If necessary, when you get paid, add up all of your set bills and then put that money aside immediately to be used when they are due.
5. Remember the key financial equation.
The key to getting ahead is to always make sure that you are spending less than you earn. It sounds very simple, but it’s not always easy to accomplish. The amount that you charge should be figured in to this equation for the best results. By keeping your spending under control, you’ll be able to start planning for the future right now, instead of when it may be too late.
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