To everything in life, there is always at least a concept that guides its activity. Here are seven key factors that will help give core values to money. Money is more or less a principle...an idea...
FINANCIAL VISION
The beginning of any lasting wealth is financial vision. In effect, vision as compared to money is the start-up capital for wealth creation. Money is just a result, a fruit, a product of work done to achieve the vision. Financial vision is a clear idea of a level of prosperity that you desire to reach over a time frame. It also includes a detailed understanding of possible legal ways to get there - both online and offline. Many people lack financial vision - they only make a living from day to day to keep their livelihood.
FINANCIAL LITERACY
Financial literacy is the minimum but sufficient knowledge required to make and manage money. Money is a principle which could be termed as 'cash flow', that is, how money walks and works around the globe, flowing out as well as well flowing into a specific port of calls -these include property market, capital market, paycheck, ATMs, banks, etc. It is better to understand money as a principle, rather than just some currency notes being used as a mean of exchange. There are factors that define how it is produced and used. When you know how money operates, you will be able to control your cash flow for your own advantage. Financial literacy tells you what pumps money into your purse or account, and what sucks money out of it. See, money is not static. Also, you will be able to interpret financial statements.
FINANCIAL INTELLIGENCE
It refers to mental prudence that enables you put value on money such that you know how and when to count your 'numbers' very well from your financial literacy. Money is dynamic: it does not keep a single phase of operation. Money flows in the direction that your 'numbers' determine based on your choices and decisions. Your number could either be positive or negative. If it is positive, you have a credit to your financial base; if it is negative, you have a debit to your account. Financial intelligence will guide your decisions on the flow pattern of your money. It will help you differentiate between your wants and your needs. It will tell you to stay within the limits of your income, thus living below your means. It will help you analyze your cash flow so as to weigh outflow against inflow of money. Also, it tells you to choose debit cards rather than credit cards, thereby putting checks on your spending tendencies and indebtedness.
FINANCIAL PLANNING
Take it or leave it. There is always an emotional dimension to money. Money comes with the instinct to spend it compared to saving it. So, some would feel like buying this or that with their money. Here comes the need for financial planning. This refers to assigning specific functions that your money will perform per time. You will identify key areas where you want to put your money, and what each should take. This is similar to fiscal budgeting. By this principle, determine, how much to put into a business and how much gain is possible so that you can know if it is viable. Avoid emotional spending as much as possible. May I tell you this: online business people know the psychology of spending and therefore have learnt to write sales letter that pull your legs emotionally so that you can buy from them by making you to feel that you will have regrettable loss if you decline. It is not true. Learn how to hold yourself before you opt for any offer. You may end up buying what you do not need. So, always have a plan for your money. One more word, do you like window shopping? You end up buying it if you have no plan beforehand!
FINANCIAL MANAGEMENT
Money is like a personality which loves to dwell with a well-behaved person. So do not handle money anyhow: you have to manage it wisely if you don't want it to slip off your hands. Keep track of your expenses since they will always tend to equate or outgrow your incomes. If they are equal, you have no savings - you live from hand to mouth. If the former exceeds the latter, you are in debt. It is left for you to suppress that trend. To do this, follow a scale of preference by arranging your needs in order of importance. Address the first-three and apply a delayed gratification to the ones down the scale until you have more resources to take care of them. This takes self-discipline. In addition, try to save at least 10% of your income. You do not make money to spend it just like that! That's why some cannot but live from hand to mouth. You make money to spend a part, save a part, and invest a part. Besides, learn to be economical; do not overspend your financial resources.
FINANCIAL BALANCE
Practically speaking, financial literacy and financial intelligence will help you maintain financial balance in the sense that you will be able to identify the nature of the physical forms that your money take up when it is flowing out of your pocket. This gives you an overview of how your money performs in any transaction or material acquisition. Financial balance usually have two columns as exemplified below
Assets
Insurance policy, fixed deposit, stocks, bonds, mutual funds, shares, etc।
Liabilities
Personal house (maintenance and taxes; Personal car (depreciating factor), loans, debts, etc.
* Assets generate inflow of cash into your pocket in a short-term, medium-term, or long-term benefit while liabilities take money out of your pocket.
Needs
may not be deferred
Wants
may be done without
Credits
to your account
Debits
from your account
Profit
for your business
Loss
to your business
FINANCIAL EMPOWERMENT
That is, build your financial base. To create wealth, you give power to your money to work for you. Money earns money; money makes money. Learn to invest a portion of your money. One of the major secrets of money-makers is that they will seek for a way to put something (product or service) into your hands so as to pump some bucks out of your pocket. That's what you should do too! Commit yourself to wealth creation. Let your money go to the capital market. Convert some into shares, bonds, or mutual funds. I suggest you lay your hands on any internet business that requires low start-up capital and that matches your interests/hobbies/potentials. There are some who have made hundred and thousands of dollars in the past few years. Remember George Allen? That's a word of advice for those who earn meager wage or salary and who are looking for a way to multiply the little bucks. You can start a cyber corporation. However, you must learn by reading published materials that will help you achieve you financial vision. Mental empowerment takes precedence over financial empowerment. In effect, mental attitude determines who will be poor and who will be rich.
When you compound the above principles, you are poised for financial prosperity. It is a state for further business expansion and integration, for free-will donations, and for savings. It is a condition whereby your income is much more greater than your expenses.
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