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There is a simple,
fundamental rule, which must be adhered to if
you
wish to become financially fit, or build wealth.
This is the
bottom line issue….
Spend less than you earn!
That is the basic principle to any
program to become financially fit. Whatever income you receive needs
to be higher than whatever your outgoings or expenditures are.
Sounds simple doesn’t it?
If it were so simple why aren’t there
many more people who are financially fit?
Government and welfare agencies would
not be as concerned about the level of consumer debt in this country
if it was really so easy. What is anyone actually doing about it
though?
Too many people run out of money before they run out of month.
Many people have had no financial skills training – ever! That
includes university graduates and professionals! They are in just as
much debt and trouble as anyone else, it’s just that the numbers are
bigger!
The fact is that it is our individual and personal responsibility to
do something about our own situation. Then we can do something about
helping others. Teaching people to fish, rather than giving them
fish, is how FBP and Associates approach the issues. We believe
Australians are not only caring and genuinely responsible, but that
they are a nation of very generous and clever people.
Many Australians are so clever at this that they have managed to
rack up credit card bills of many thousands of dollars, along with
the rent, the car repayment, the “nothing to pay for 48 months”
fridge, TV and Stereo. It is so easy that they still have less going
out than coming in, based on the “minimum monthly payments” plan.
Using that strategy they still have the minimum monthly payment plan
for about 25 years! That is just where the providers of these credit
facilities and consumer goods want them kept!
We believe the media, the banks, the credit card providers, the
retailers and chain stores have some responsibility. How many banks
or credit card providers offer “financial literacy and skills”
training before they give you the loan or increase your credit
limit? The Federal Government convened a large panel of experts,
headed by Paul Clithero, to plan, develop and steer the
implementation of some programs in schools.
It is not so important how much money comes into your household. It
is what you do with it that makes all the difference!
Government changes, and changes to the legislation that governs wage
and salary earners ability to negotiate and achieve higher wages
have been drastically altered. Australia may turn its back on the
“fair go all round” principles of mates, a helping hand up, support
and assistance when things are tough.
How efficient are you managing your bit of the money?
Maybe you are better at managing money than other people. Does it
seem you just do not manage to keep on track for your savings
though? Does something always come up just when you get your head
above the high tide mark, or when that account balance reaches
$1000?
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What DO we DO about it? Well, just a gentle reminder…
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Keep income higher than expenditure
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Pay yourself first
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Reinvest your investment returns
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Receive Level 4 automatic investor rates of return
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Know what your money is doing
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Adopt the automatic money system
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Develop financial competence (intelligence &
responsibility)
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Avoid debt and live debt free
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What we at FBP and Associates do about
it is simply all of the above, and we offer clients:
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Our Financial Fitness for Business & Home Ownership or our Money Skills Program
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Support, guidance and provision of
budget and financial fitness tools, software and systems which can assist you avoid
desirable outcomes
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Assistance, guidance and support to
invest in Queensland residential property, home ownership, joint
venture capital gain investments, independent business ownership
and development!
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FBP and Associates offer an
integrated, well considered and planned package of solutions to
money management, Queensland property investment, home ownership
and i-Commerce business establishment. We do not do seminars or
tapes and CD home learning packages. Many of those who do, take
the money, deliver the goods, and are gone. We are here, with you,
each and every step of the way. Register
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Keep income higher than expenditure
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This can be
difficult on a week-to-week basis. It can be even more
difficult month to month. That does not mean owe less than
you can repay. It does require that if you owe money, what
you owe it for should return you an income, or it should
be an asset - something that increases (appreciates) the
longer you own or control it. A liability is something you
owe money for that not only does not return an income, it
looses (depreciates) in its value the longer you hold it.
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Pay yourself first
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Ever wonder why
government introduced the pay as you earn tax system, and
required employers to pay them the tax before your wage or
salary was given to you? Wondered about the pay as you shop
taxes or GST? Government use this principle for their
income. Why don’t you use it? By putting money aside, into
an account or fund that you just don’t touch, such as a line
of credit or an offset account on another asset, before
money is deposited to your living and bill paying account,
you can accumulate an investment fund. But remember money
only gets consumed (spent and gone) or it grows. Compounding
interest was described by Albert Einstein as the Eighth
Wonder of the World. Just deposit the money, leave it alone
and it multiplies at a rate faster than just your level of
deposits. So it does take commitment to save this way, or a
big enough goal or dream to save for. Like the overseas
holiday or cruise, or the whole deposit and costs to
purchase your home.
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Reinvest your investment returns
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Sounds like some
thing only for “rich people” doesn’t it? But if you’re
paying yourself first, building an investment fund, leaving
the interest in the account, or reducing interest on a line
of credit or offset account, you’re doing it. If you have
enough funds you could borrow more money to buy or control
an asset (Queensland investment property, small business, i-Commerce
business, or a franchise). This is referred to as leverage –
use a little of your money, a lot of someone else’s, acquire
and control an asset (remember it delivers an income and
generally appreciates in value).
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Receive Level 4 automatic investor rates of return
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This has got to
be one for the rich! Every wage and salary earner in
Australia is required by law to have at least one
Superannuation account in their name when their income is
above a certain level. Employers are required by law to
deposit a percentage of each workers income to that account
on a regular basis. Employees can choose to contribute more
of their wage or salary.
Superannuation is for everyone and is an automatic investor
strategy introduced by government, trade unions and
employers in the 1980’s. The money gets special treatment
from a taxation perspective when it is deposited, while it
is in there earning interest and dividends from the
investments made by the Super Fund, and when you eventually
get access to it. It has to be there a long time and you
generally have no direct control over what happens with it
while it is in there. You can set up a Self Managed Super
Fund, but be VERY careful and get very good advice before
you do!
There are many other ways of
receiving automatic investor rates of return. Some
investment funds pay higher rates of return because you sign
up to deposit a set amount each and every payday, month, or
year. Some property investment strategies deliver an offset
automatic rate of return per week or month, and are called
cash flow positive investment strategies. Again, very good
advice and guidance is strongly suggested before you start
down this track!
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Know what your money is doing
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Yeh, like I know it is disappearing! Well, where is it
disappearing to? How much is spent on items like newspapers,
magazines, lollies, videos, games, movie tickets and fast
food each week. How much is spent on those other consumer
items that you get a good feeling from now and a headache
from the next morning? Keeping track of where your money
goes, identifying what expenditures can be reduced,
minimised, or stopped altogether, can be a great way of
making your money reach the end of the month. Focusing on
what day of the month you pay your credit cards might be the
difference which means you’ve got more money than month. Do
your numbers and analyse your credit account statements. You
may be surprised at the money that can be found each month,
which can amount to hundreds of dollars a year! Want a $500,
a $1000 per year pay rise? Give yourself one!
Register
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Adopt the automatic money system
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Most employers
will arrange direct payments from your salary or wages to
many creditors. With direct debits you can do the same with
your bank account/s, and transfer money the moment it
arrives. Many Real Estate Agents now do this to collect
rentals each week. Phone cards are a great system. People
can still ring you if your phone card runs out of preset
limit for the month, but if you spend your limit in the
first week you have to be committed and don’t go buy another
one! You become more focused on the important calls to make,
and only for the real time needed!
Paying yourself first is the number one automatic money
system to adopt however.
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Develop financial competence (intelligence & responsibility)
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Learn about what
money does. Money can do only one of two things! Money grows
or is consumed and gone! But how money works, how the
financial system operates, how banks treat different
accounts, credit cards and fixed term deposits can be quite
an education. Recognising that different banks will compete
for your business, and to then having them chase you for it,
feels good. Doing our
Financial Fitness for Business & Home Ownership or our Money
Skills Program can put you in a great position to be better
informed, skilled and savvy when it comes to dealing with
your money, and the creditors.
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Avoid debt and live debt free
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This is a tough
one for many people. It is not really saying do not go into
any type of debt. It is saying enter debt arrangements with
a dedicated plan, one that is acquiring assets and not
liabilities. If you want a new TV, get prices on the make
and model you want, put them into your money management
system, make sure that amount per week is added to your
automatic money system, and before you get really frustrated
at not having it, you will be able to go and pay cash,
negotiate an even better price, and probably on the next
release model that is the snazziest yet!
We know this rule is a tough one. We have all been raised
and encouraged to get things on the never-never, the
plastic, the interest free period. Take control of your
thoughts, your mind and your spending patterns. You’re
friends who no longer love you were never really friends
because they would rather see you suffer financially than
not be able to watch wide screen TV when they visited. Find
new friends, there are another couple of million people you
haven’t met yet.
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Take our Financial Fitness for
Business & Home Ownership or our Money Skills
Program
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These are
financial fitness programs developed from some of the best,
high cost coaching and motivational programs around. They
have been run, in one form or another for about four years.
These are not financial planning sessions as it is your
responsibility to be accountable for your money, and how you
manage it. We are not in the financial planning business. We
are practical people who offer a practical, skill based
pathway to better understanding money management.
We run these Programs to support and assist our clients,
investors and home buying occupants really accelerate their
opportunities to obtain bank finance, manage their property
investment portfolio, acquire more Queensland investment
property, or get into our vendor financed properties.
Remember, its not always how
much you get, it’s what you do with it that matters.
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Obtain budget and financial tools, software and systems
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These are freely
available and many financial institutions will provide them
to customers. FBP and Associates suggest it is in your own
best interest, could significantly improve your financial
future and maybe provide for your more secure financial
future. Check out the
resources from our free links. Many of these are good,
effective money trackers for where the money went. Not many
provide a forward vision like our Financial Fitness for
Business & Home Ownership or our Money Skills Program
though.
FBP and Associates do use and
recommend the Simply Budgets set of money management
software. We do that because we know David Wright. We know
he is as committed to helping others as we are. We also know
from our own, and our client’s experience, that his software
does not need an economics degree to figure out!
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Assistance, guidance and support to
invest in Queensland residential property, home ownership, joint venture
capital gain investments, independent business ownership and
development!
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So maybe you’re
a slow learner, or just stubborn. It is all just too
difficult to get a handle on, so you’ll just drown quietly,
OK? We don’t know what
you story is.
There are options available
to almost everyone if they will be honest about just what is
wrong, what they think they might be able to do about it,
and tell the right people. Banks and creditors would rather
get some, or most of their money back, than none at all.
They are usually quite happy to work out a plan that will
return even 70% of what you owe over twice as long. You just
have to front up, explain, and ask what arrangements can be
made.
People do not have to go
bankrupt in this country. Not unless they really want to.
Consolidation loans are what a lot of people try to get into
place, or consider will as a solution. BE CAREFUL.
Getting more money isn’t
going to necessarily make you a better money manager.
Getting another credit card may well be the worst possible
thing you could do, the other four are still in meltdown
because you can’t stop using them. For some people the light
at the end of the tunnel is really a train coming toward
them!
We urge and encourage you to
take action now!
Register
Money does one of only two
things. It gets spent and is gone forever; or it just grows!
You must pay yourself first
and put automatic money systems into place. Your financial
future, your wellbeing and that of your family rely upon you
taking action and exercising control over your financial
life now! The light at the end of the tunnel you keep
referring to may well turn out to be a mirror!
FBP and Associates may not be
able to directly assist you. You may not like us or our
approach or our core strategies. We can’t guarantee we will
get it all done on Monday, but if we work at it together,
probably by the end of the week after, we could have a plan
established, and then you’ll have an option to relight the
light at the end of the tunnel.
Register or
Read More…
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