If you had to choose only one step/action out of all the steps to do, and eliminate all the others, the action you need to keep is to reduce your spending. This one thing will almost always have a bigger impact on your personal finances than any other. … [Read more...] about Step 08: Reduce Spending (Minimize Expenses)
Step 07: Develop a written Financial Plan
A financial plan is a written set of goals, followed by steps, strategies, timelines and habits for accomplishing these goals. It provides direction, gives you a benchmark from which to evaluate your progress, and helps you prioritize the most efficient use of your financial resources. … [Read more...] about Step 07: Develop a written Financial Plan
Step 06: Track Key Financial Ratios
Some folks feel budgets don’t work. I feel that the process of building and organizing the budget is even more important than having one. Categorizing where your money should and does go is critical. Apply the same financial discipline we do in business. Remember. You are a business. So do what businesses do! … [Read more...] about Step 06: Track Key Financial Ratios
Step 05: Create a Budget
Planning your spending is key. Having a balanced spending plan should be a financial priority regardless of where you are in life or what your net worth. Call it a budget. Call it something else. Just be deliberate in how you spend your money. … [Read more...] about Step 05: Create a Budget
Step 04: Create an Income Statement to track cash flow
Using the same trip analogy, if the net worth is your location as you travel, your income on your “cash flow” statement is the speed you’re traveling. This is the second number you should be tracking. Taken together, your net worth and cash flow will help you benchmark your progress against others and yourself. … [Read more...] about Step 04: Create an Income Statement to track cash flow
Step 03: Create a Balance Sheet to track your Net Worth
You should be treating your finances the same way a business does. The first document every successful business uses to track it’s health is a balance sheet. Why? If you give this document, to any financial advisor, they will be able to tell in 60 seconds your exact financial position. Your primary goal is to grow the number at the bottom of this document. … [Read more...] about Step 03: Create a Balance Sheet to track your Net Worth
Step 02: Track Your Spending
Knowing & tracking what you spend money on is the first step to controlling your expenses. A great way to shock oneself is to track our spending closely for several months and see just how much you spend. I’m almost positive you’ll be shocked. We tend to spend what we have. We tend to spend far more that we realize. … [Read more...] about Step 02: Track Your Spending
Step 01: Organize Your Financial Records
Financial independence is a destination. Like any journey, the route starts with your current location. The process of organizing your financial records is crucial. You can’t make proper decisions if you can't accurately gauge your progress. … [Read more...] about Step 01: Organize Your Financial Records
The 5 Money Books you MUST Read
There is an amazing amount of knowledge available through the thousands of personal finance books out there. If I had to start my journey of learning about money all over again, and could only choose 5 books, these are the 5 I would choose. And these are THE 5 you should start with. … [Read more...] about The 5 Money Books you MUST Read
Why me?
There are plenty of folks out there who know more about investing than me. So why should you listen to me? I'm no expert, but I've done OK for myself. And after the tenth person asked me for advice, I figured I need to find a way to get my advice out there in a more easily accessible way. … [Read more...] about Why me?
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