Your Personal Financial Strategy


A lot of individuals are cracking their heads trying to think of an alternative source of income, coz it’s really getting tough out there. The best you can do for yourself right now is to come with a financial strategy that will work best for you. You have to sit down and come up with an original and unique plan that works best for you, do not ‘copy paste’ ‘ another person’s idea, like what is happening nowadays. Gone are the days when people would be content with a paycheck, but things have changed and there is no guarantee that the paycheck will be there at the end of the day, month or year. The following article by Sharon Fredrickson demonstrates the importance of setting up your own personal financial strategy, so as to achieve those financial goals that you harbour.

There is a lot of focus on money right now. Part of the reason is because all of the great news that is in the papers and on T.V. about our economy. We live in a country that is just inches away from a major economic explosion. As of September 23rd at 7:47AM, Pacific Standard Time, the outstanding public debt was $12,734,463,990,056.79. The average person carriers about $10,000 in credit card debt. Now like many of you out there, I have heard, “hey, if a person paid for it using credit then they owe it!” While I mostly agree with this, the reality is also a little disheartening.

A bankruptcy judge once asked a credit card company how much of what they were asking for was going towards the principle, and they were unable to answer. The judge then asked how much, out of the last two years, was actually going towards the principle, and how much was going towards interest and fees. It finally came out that for every $1.00 of principle they were attempting to collect, there was an additional $2.00 of interest and fees. What that basically means is that if during the summer a person filled up their gas tank and had to use credit card to do so, then they would have put approximately $600.00 (or $50 per week) onto their credit card. Let’s say this same person was only able to pay the minimum payment due (which by the way, doesn’t even pay for the interest). Of course these are all estimates, but what this means is that for a person to charge $600.00 of gas over the summer, they now owe the credit card company approximately $1,800.00.

The amount of money people are making is not rising near the speed of the price of life. People categorized as “middle class” are spending around 20% just on credit card debt payment. Want bigger numbers? The U.S. Government spends more money on just the interest of its debt, than it does on homeland security, education or health care combined. Gulp!

So what do we do? First of all we have to just take a look at our own financial situation and say, “OK, it is what it is.” I’m fairly certain that I just heard some people proclaim, “Yeah that’s easy for you to say.” Let me just share with you this little known fact. You know how I said that the average American has $10,000 in credit card debt? Well, there was a time that I “offset” a lot of people who don’t have any debt because I had 8 times that amount. Oh yeah, it’s scary to be $80,000.00 in debt. So when I tell you the first step is saying “it is what it is”, I know how difficult that is.

The next step is to start thinking outside of the box. I cannot stress this enough to you. It’s time to have a new way of thinking. Money isn’t just paper, money is an idea. I know this seems like a stretch, but why do you think that welfare earners are 2nd and 3rd generation. It’s because that is where their mindset remains. You see, people who have money aren’t any better than anyone else. People who have money simply have a different mindset.

There are actually three ways of financial thinking.

  • One is that we trade time for money. That’s about what 96% of people do. We go to work and we trade 40, 50, or 60 hours a week for the paycheck. Also, the people who do this typically have one source of income and while you can survive by doing this, it is very difficult to thrive and obtain the financial freedom you hope to experience. The other danger in having this thinking is that it is never secure. Meaning, what happens if that company you are receiving your paycheck from goes away, and takes your income with them. Then what? Here in California we had a heck of a time getting a state budget passed. I’ll be honest, because I choose not to read or watch the news on any consistent basis, I don’t know if they’ve even passed one yet! It was something like 85 days past due. I remember hearing at one point that our Governor was talking about moving everyone one who worked for the state in a “non-emergency” capacity down to minimum wage until the “budget crisis” was over. Imagine how bad that would hurt your financial world.
  • Now the second type of thinking is money earns money. This is investing in stocks, bonds, etc. Only about 3% of people do this and do it successfully. It’s a great way to make money, but it is difficult and can be very risky. Look at what is happening to our market right now. People are losing money and a lot of it, almost if not daily. Please do not get me wrong, while this is dangerous and difficult it is still much more effective than the first way of thinking.
  • The third type of thinking is leveraging time through others. Only about 1% of the people use this, but they earn about 96% of the income. The bottom line is that you have to create multiple sources of income (MSI’s). First of all, you have to realize that MSI’s aren’t another job. If you are spending a lot of time at another source of income then you are still trading time for money. Now am I saying that this income will be quick and easy? Not at all, but is your life easy now? What if you could work one hour more a day 4 or 5 days a week and it would generate an extra $1000 to $1,500 a month? Would you do it? Imagine what have an extra $1,000 to $1,500 a month would do for you and your life.

About kenndungu

Live a few years of you life like most people won't, so that you can spend the rest of your life like most people can't. Anonymous View all posts by kenndungu

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