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3 Basics of Personal Financial Planning – The Entrepreneur’s Success Formula
| Guest post by: David Beairsto |
Article Overview: Personal financial planning is the key to becoming a successful entrepreneur. Where our personal finances are so closely tied to our business interests and lifestyle, how well we manage them will determine how successful we are in life.
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3 Basics of Personal Financial Planning – The Entrepreneur’s Success Formula
The Perfect Equation
Right out of the gate every consultant knows that personal financial planning begins by ensuring the amount of money coming in exceeds the amount being spent. When developing a wealth strategy or a success formula, this ratio becomes the benchmark.
Although this article is based upon personal financial management, entrepreneurs know that these principles can be applied to their businesses as well.
1. Increase cash flow
2. Debt elimination
3. Build wealth
The Growth Concept
Why did corporate America decide somewhere in the last decade that they could fix the cash flow ratio by cutting expenses as opposed to increasing revenue? Growth in business allows for more employees. Stripping the workforce makes expansion impossible and increases the workload on the remaining employees.
From the perspective of home economics, if I increase the flow of cash into the equation, budget items like entertainment and vacations become features of a more exciting lifestyle. The increase in cash flow can be used to leverage more free time by hiring domestic services.
Entrepreneurs use this personal financial education to grow their businesses by hiring people. Higher profits allow business owners to outsource or directly hire people. As more of the day to day activity is offloaded, more time becomes available to pursue other interests; they discover lifestyle by design.
Muck and Mire
Many personal financial services companies exist to help people reduce debt. When we think of debt as a necessary component of our plan we have to ask ourselves, ‘Will this debt produce an asset or a liability?'
Every dollar and every day spent in debt affects how much longer we have to grow before we decide to retire. Debt reduction is like bandaging a bigger problem.
Wealthy people don't incur losses by paying interest on debts that negatively impact personal financial planning. They give money away because it does help by reducing their taxes and reinforcing the economy in which they live.
Debt reduction is not the same as debt elimination. By eliminating debt, the increase of cash flow allows people to build wealth.
Gathering, Building and Maintaining
It's possible to increase cash flow, eliminate all your debts and still have nothing to show for it at the end of your days.
Creating wealth begins with asset protection. No one wants to hand over their hard earned money to someone who was unwilling to earn their own.
Every Mission has Purpose and Meaning
Building wealth that endures serves our descendents as well as our world. Great men and women who leave a legacy do so because their vision, or mission in life was greater than the attainment of wealth and prosperity.
This is simply another financial principle. Although the objective is to become wealthy, there is always a reason, a purpose behind it.
That reason can be as shallow as wanting to live poolside in the lap of luxury for the rest of our lives, or deeply involved in alleviating world hunger.
An individual's personal mission usually includes what they want to leave behind for their family. We know as finite beings that we can't "Take it with us" which is why a good personal financial representative will always ask, ‘Why do you want this amount before you retire?'
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Referred by: http://jaykubassek.com
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About the Author: David Beairsto RSS for David's articles - Visit David's website I work with aspiring entrepreneurs and business owners that are looking to unravel the mystery of online business. The mission of my Internet Marketing Company is to enable anyone with a desire to succeed online to overcome any technical obstacles or confusion. I've written two books designed as guides so that people can establish their online presence or create their 'Online Business World.' Both are available at lulu.com: "3 Online Anchors Every Business Needs" "How To Create Your Online Business World In 6 Days" If you're serious about making a change in your life that will produce financial security and personal freedom visit my website at: http://WorkAtHomeBusinessFromAnywhere.com It doesn't matter where you live, your education level or background. All that matters is a serious unwavering commitment for positive and permanent change in your lifestyle. Click here to visit David's website   As A Man Thinketh Science of Getting Rich Think and Grow Rich Acres of Diamonds |
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Re: LEADERS
- Nice post, i like the Doers and the listeners comments
from my handbook 8.5 HOW MUCH DO YOU KNOW ABOUT LEADERSHIP?
Planning
Problem Solving
Vision
Innovation
Leadership
Emotional Intelligence
Delegation
Communication
Self-Development
Relationship Building
Commercial
Financial skills
Personal Energy
Ethics
Transparency
Even there I see that we are missing "PASSION"
Re: Success
- I study success intently, and would like to share:
Here's two excellent and nearly identical success-formulas from a couple of the world's masters.
FIRST FORMULA:
1. Passionate Desire
2. Clear, Definite Purpose
3. Committed Decision
4. Take Action In Faith
(Bonus Secret Sauce: 5. Repeat Consistently)
I made a video about this, but am not allowed to link it yet. Google "Ryze Success Steps" for it.
Oh, and this is Napoleon Hill's (Master Of Success Laws)'s Formula.
SECOND FORMULA:
1. Passionate Desire
2. Understand It Is Already Done (Faith)
3. Relax & Allow It To Unfold (Go about your life calmly)
This one is courtesy of Abraham-Hicks (inspiration for the movie The Secret).
Hope that helps!
Different Hats
- CEO Sales & Marketing & Leadership Development Company
Strategic Vision 10
Alliances & Growth Strategies 10
Hiring & Managing People 8
Mentoring 8-9
Strategic Planning for Clients 10
Execution of Marketing Campaigns 9-10 (i have great people who do the nitty gritty)
Financial Management 9
Bookkeeping 3 (outsourced as I really hate the fine details like GST0
Administrative Follow Up 6-7 (again have great staff)
Writing & Publishing 9 (getting better all the time!)
Speaking 10 (so I have been told)
Self Promotion 9-10
Web development & Promotion 6-7 (learning more and have brought on players who are 10+)
Babysitting Employees (1 - wont do it, that's why I work so hard to hire and motivate the people I have)
Great topic Kevin!!
Jude
Book: Secrets of Six Figure Women
- Secrets of Six Figure Women: Surprising Strategies to up your earning and change your life
Barbara Stanny, 2002
Jacket:
Maybe you've noticed - a subtle trend is gathering steam. Quietly and steadily, the number of women making six figures or more is increasing, and it continues to rise at a rate faster than for men. From entrepreneurs to corporate executives, from white collar executives to free lancers and part timers, women are forging careers with considerable financial success.
Through extensive research and hundreds of interviews, including dialogs with more than 150 high earners whose annual incomes range from $100,000 to 7 million, Stanny discovered that ...they all had certain traits in common:
1) a profit motive
2) Audacity
3) REslience
4) Encouragement
5) Self-awareness
6) Non-attachment
7) Financial knowhow
She amplifies on these in the book itself.
Table of Contents
Intro: Welcome to the era of the six-figure woman
1. The Queen in the Countinghouse
2. The Lowdown on low earners
3. Raising the bar
4. Strategy 1: The Declaration of Intention
5. Strategy 2: Letting go of the ledge
6. Strategy 3: Get in the Game
7. Strategy 4: Speak Up
8. Strategy 5: The Stretch
9. Strategy 6: Seek Support
10. Strategy 7: Obey the rules of money
11. Claiming our power
Appendces:
Resources and websites
Tips for getting out of dent
Investing Basics: Wealthbuilding 101
Future Financial Corporation
- I've never heard of Future Financial Corporation
is this a new company?
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