Whether your income only comes from being a wage earner or it is the result of investments or a combination of the two, the thing that makes any of these sustainable in the long term is that the amount of money coming in is greater than the amount of money going out.
When you have an income solely from a job there is always the problem that you are an employee and therefore subject to the decisions of the person running the company you work for, whether they are the same decisions you would make or not. Also because employees generally work from the mindset that there will always be more money with the next pay check it is very easy to use up everything you earn without necessarily planning too far into the future.
An alternative to being an employee is to own your own business where you can make your own decisions about how the business is run. If you decide to do this, in some ways you will have more freedom but in many cases you will work a lot harder. The key component here is that managing your own cashflow is even more critical as not only your personal income is dependent on this ability but the income of the company will be dependent on it as well.
If you decide to plan for your future and invest in property the ongoing cashflow can be a constant battle. Indeed having a regular cashflow in property can be the difference between having a successful property business and one where you have to sell your property at a loss to pay the mounting cashflow deficit.
If you decide to plan for your future and invest in the share market this can provide a cashflow for you if you invest in companies that pay dividends, however, as we have seen over time, the stock market is not necessarily a guarantee that a company that performed well yesterday and paid regular dividends will continue to do so today and tomorrow.
Since the “Global Financial Crisis” and indeed at times in the past and most probably in the future people have felt ongoing uncertainty about their incomes, interest rates and their ongoing cashflow. Indeed having the ability to manage your cashflow is the critical component in financial success, no matter what level you decide to play at.
One of the first steps you need to take when managing your cashflow is to understand completely what income you have coming in each week/month and what expenses you have going out. It is also important to understand what the necessities are and what is optional.
Although many people will look at that statement and think “budgets”, I don’t want to have anything to do with them, the only way that you can get control of any situation is by having control and the only way to have control is to know where you are now.
When you are working out where you are now make sure you separate what are fixed essential expenses, like loan payments, insurance and registration payments then work out your variable essential payments like food, petrol, school fees, medical expenses etc. Lastly work out your discretionary expenses like take away food clothes entertainment etc. that you can adjust to make sure you don’t use up all your cashflow.
When you understand what your cashflow is and you decide you need some more income one of the fastest and most effective ways to do this is to get involved in the direct selling industry. This industry allows you to start with a minimal investment and work towards creating a regular cashflow for yourself or you can start with a larger initial investment and create that residual cashflow sooner rather than later. You can do this alongside what you are currently doing or you can make it a full-time business. The choice is yours.
One of the most important things to consider in any direct selling business is who your sponsors are and how much support they are going to give you. Many people in the industry just try to sign people up without really considering what the needs are of the people they are talking to. A good sponsor will consider what you need out of the business and will adapt and offer the support that you require rather than just what they want to give.
The most important thing to remember is that no matter how much you earn or how many expenses you have the ability to manage your cashflow is what will make your life smoother.
For help on managing your own cashflow please do not hesitate to contact us.
One possible option to help increase your cashflow go to http://freedomwithcashflow.com/WCA/
For help with managing your money go to http://freedomwithcashflow.com/MoneyManagement/FreedomWithCashflowDebtReducer.xls
As your upline we are here to help and as always if you have any questions please do not hesitate to contact us.
As always, feel free to contact us if you have any queries.
John and Linda Ballis
Freedom with Cashflow
For more helpful tips on creating cashflow to improve your lifestyle revisit this blog regularly, http://freedomwithcashflow.com or visit our other websites http://wheeloflifeblog.com or http://wheeloflifebook.com and purchase our book “The Wheel of Life’s 8 Keys to Success”.