Friday, September 14, 2012

Making Your Money Work For You

There is a common misconception about money. Thanks to our consumer-driven society, the belief is that the purpose money is to spend it. This could not be further from the truth. The purpose of money is for building wealth. You must reprogram the way your brain thinks about money and approach your finances with a fresh perspective and plan of action.
Whether you are making $50K or $8.00 an hour, you can learn to make your money work for you. The key is in handling your money the way the rich do. Most people don't understand what this looks like, so allow me to give you a blueprint for using your money to build wealth.
The key is in designating certain parts of your income to specific areas of your life.
The first category is tithing. Tithing is defined as giving back financially to the work that God is doing through the church. If you are not religious, then substitute giving to a specific charity that you believe in. It is always good to give. What good is the wealth that we build if we are unable to help those less fortunate? 10% of your income should go to tithing. By establishing giving as the very first thing you do with your income, it helps to keep you from falling prey to greed.
The next category is savings. Once you have paid God, pay yourself. 10% of EVERYTHING YOU MAKE should go immediately into a savings account. This is the money that you should try not to dip into, whenever possible. It is certainly acceptable to borrow from your savings for important, well thought out purchases, (IE, a down payment on a new home, a big family vacation, etc) but avoid using this money for every day and/or frivolous spending.
The next category is self-education. In the business of network marketing, the most valuable asset that you have is YOU. Set aside 10% of your income each month to invest back into you education about the business. Use this money to purchase books, audio trainings and coaching on things like money handling, marketing techniques, and self-improvement. The more knowledge you acquire, the more value you present to your prospects. Remember; people don't join businesses, they join people.
The next 10% of your income is designated for investing in Income Producing Assets. Some great ideas of ways to invest your money in assets that will earn money for you include but are not limited to buying and renting out an apartment building, purchasing a laundromat or a parking lot. With any of these things, you will quickly make back your initial investment and it will soon turn into an extra stream of income that works for you. Once your budget allows for it, outsource the management of these assets to qualified people and you have created a stream of income that works for you without your ever having to touch it. Do some research and find out what works for your budget and what opportunities are open to you. Then put the plan in motion to get these income producers on their feet ASAP.
The next category is my favorite; Entertainment. We all need to be entertained, we simply need to learn how to be smart about the way we budget for it. You guessed it, 10% of your income is set aside for the soul purpose of entertaining yourself. Use this money for whatever brings you enjoyment. If it's shopping, shop. If it's dining out, eat. If it's attending sporting events, theatre, or just going out to the clubs and shaking your groove thang, do it. The only rule about this category is you must spend every dime of it each month! This category is a great motivator to make more money. If you make more money overall, you have more money to blow on things that you enjoy.
Once you have budgeted accordingly in all of the previous categories, you are left with 50% of your income. This is what you use to pay your bills, make payments on your existing debt, buy your groceries and all of those day-to-day expenditures you encounter. Learning to live off of 50% of your income may mean needing to make some sacrifices. Do you really need all 900 channels? Do you need to buy the brand-name paper towels? Get really honest with yourself about what it is that you are spending money on now that you do not absolutely need and get rid of it.
It may be difficult at first to implement these principles, especially when it comes to making those sacrifices up front. Remember though, that the number one purpose of money is not to spend it, but to create wealth. Start putting these principles into practice now. Make sacrifices today for a better tomorrow. Remember, it's not about how much money you make, it's about knowing what to do with it.

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