PART 5: Declutter your Finances and Get Going

Amanda Steadman

Amanda Steadman

This month after talking about wealth we need to get down to some hard facts and starting point from where you are now to where you want to be. Like many of us – we don’t go ‘Wow I am so excited about sitting down with my balance sheet, bank account and credit card bills and going through the numbers’.

Nonetheless you HAVE to do it at some point unless you have a wealth coach, financial adviser or accountant that can sit down and go through it step by step with you. If you haven’t already got a copy of our Super Goal Achiever Course Book get it now as this link is time sensitive.

As a semi-financial person myself, I’ve gotten used to looking at numbers, manipulating an excel spreadsheet (especially when it comes to working out my portfolio profits!) and even delving into a tax return – despite the fact that I do not consider myself a ‘numbers’ person. One of the books I have read says ‘You get what you focus on’. So if you focus the whole time on how much money you DON’T have – it will expand. So focus on what you DO have!

For example when you look at your bank statements – if they are not in the black. Keep imagining that they are. In our office we have pictures of £1million dollar notes and cheques with various amounts on. It all helps get your subconscious focus on your end/financial goals! We also have vision boards (as mentioned last month – with visual pictures of what we want)

The plan of action depends very much on your Financial and Money Goals? Have you written them yet? Have you got clarity from looking at your own financial position? If you haven’t done any of the above yet – PLEASE do so it now or as soon as you have finished this article.

Click HERE to download a free copy of a PERSONAL BALANCE SHEET from us and get stuck in.

I learned a tremendous amount from two books by Robert Kiyosaki – Rich Dad, Poor Dad and also Cash Flow Quadrant. So do make them an addition to your wealth library. I use his examples to simplify what you have to do to start becoming wealthy. I am going to keep it in simple terms so apologies to any accountants reading this! One of the beginning steps is to understand what an asset and a liability are.

The way I like to look at it is:
Liabilities take money OUT of your handbag and Assets put money INTO your handbag.
So with our client we start to plan around how to increase your money generating assets. If you fill out your Personal Balance sheet you will see what’s putting money in and what’s putting money out.

For example:
i.e. A Property – If it’s tenanted and they are paying YOU money. It’s an asset

Mortgage – Your Own House is not necessarily and asset as you pay a mortgage every month which takes money OUT of your handbag.

So looking at your own finances. How many liabilities and assets do you have? The Personal Balance Sheet will tell you your net worth. On a monthly basis you also need to look at your INCOME verses EXPENSES. What amount if anything do you have left over at the end of the month. If you are always in the red it is recommended you start to look at your spending and where you can reduce those items that are not needed – for example gym membership you aren’t using, impulse clothes shopping ( I know this is a tough one for me too!!)

To prove the power of this there is something the wealth gurus call ‘Cappuccino Factor’ for example: How much do you spend each day on your coffee? Is it £1.80? Is it £3, £5, or even more with a cookie or two? Whatever your figure is, it could make a huge difference to your financial lifestyle and your financial future. Whatever amount you spend – multiply it by 6,214. This will give you the amount you would save at a 10% interest rate over 10 years if you stopped your Caffeine habit and invested it instead. If you could save £5 a day at 10% for 40 years, you’d have £959,152! What would you do with a million? That’s a whole lot of Cappuccino. Enough to retire on. So what is going to motivate you to start looking at how you can make money work for you?

Now start thinking about other parts of your expenditure. If you focussed any excesses from your accounts to money making assets like property, stocks or even higher interest investments – what would this look like in 5 – 19 years? For many investments you don’t even have to wait that long for good returns.

If you want to get wealthy you need to start learning how to MAXIMISE YOUR ASSETS AND MINIMISE YOUR LIABILITIES. Assess your current position using the tools above, get clear about your goals and next month we will start to look at how to increase your Cash Flow (money coming IN) and what other tactics other wealthy people are using to make money whilst they sleep!

To your health, wealth and success

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