Think about income as falling into three categories - earned, investment and passive. These are known as income streams. An income stream pays you money on a regular basis.
Earned income usually comes from a job. It's the hours for dollars concept.
Investment income comes from interest on bank accounts, dividends or profits from stocks and bonds.
Passive income is money earned without the minute-to-minute, hour-to-hour and day-to-day time and effort. It can come from such things as royalties, a network marketing override check or income from rental property.
When considering possible passive income, be weary of promises about doing nothing and still making thousands of dollars. Do your homework!
Let's take a look at three ways (of many) to generate passive income.
Network Marketing -- A business opportunity where you distribute a product or service and recruit a team to duplicate what you're doing. As your team grows, the network marketing company pays you a percentage and bonuses based on your team's revenue.
Example of network marketing companies: Arbonne International, Melaleuca, Nikken, Shaklee and many, many more.
It takes time to build a team and develop passive income. Choose your company wisely; network marketing is not get rich quick. It takes time to build a business but once you've built your business, you'll begin enjoying the rewards of passive income.
Internet Affiliate Marketing Programs -- In a nutshell, it's about using one Internet site to drive traffic to another Internet site. You are rewarded with a commission when your referred customer makes a purchase.
Example of an affiliate program: Amazon.com
It takes a large number of referrals to generate substantial passive income, but if you have the Internet traffic it can truly become passive income.
Creative and Intellectual Property - Royalties are paid to you each time someone reads, listens or uses your authored books, music/songs, software, inventions or patents. It takes work to write, develop and/or invent but the benefit of this work can potentially generate passive income for generations.
Example of creative and intellectual property: In the early 1960's songwriter Paul Anka wrote the theme music for Johnny Carson's Tonight Show. Every time that song played, he was paid a royalty.
It is important to do your research. Find an attorney and other professionals who are trained to protect your creative works. There are many legal issues involved with intellectual property but it's certainly worth the time and effort.
Can you see how multiple streams of income, especially passive income, could produce a financially rewarding future? Financial freedom is having your money work for you.
Passive income allows you to leverage your time and money - you can do what you want to do, not what you have to do to bring in an income or additional income.
Enough Of Everything For Everyone - That's Abundance
Let's start with the mind-set of abundance. What does "abundance" mean to you? I'm talking about abundance in all aspects of your life - personal, professional, spiritual and financial. If you sat down with a piece of paper, what would you write about the abundance you're experiencing today? In fact, why don't you do that and then come back and finish reading this article.
Let's explore how an abundant mind-set begins. The human mind is composed of two levels: consciousness and unconsciousness. Both work together to create and mold our thoughts, actions and personality.
Understanding and appreciating the unique function and characteristic of each "part" of the mind is vital to understanding how and why you're allowing (or not allowing) prosperity, abundance and wealth into your life.
Abundance is simply a concept. And, as a concept it begins in your mind and works its way out into your everyday life. You either believe you deserve to live in abundance, or you don't. Understanding the "workings" of your mind means understanding how you function on both an unconscious and conscious level. When you allow it to, your mind will be a tireless and powerful success and wealth-building ally.
Here's the difference between the conscious and unconscious parts of your mind:
The conscious part of your mind is the awareness you have of the world and your personal role in it.
~ The function of the conscious mind is to analyze and rationally tie everything together.
~ It's the tangible link between thought, reality and the action you decide to take.
~ Your opinions, likes and dislikes, judgments, prejudices and realities are filtered through the analytical conscious mind.
The unconscious part of your mind controls at least ninety percent of mental activity.
~ Your unconscious mind is a never-ending source for thoughts and memories.
~ Reality is stored and preserved in the "all-remembering" unconscious mind.
~ Your negative and positive thoughts, feelings, memories, emotions and reactions, bodily functions, stress, illness and health, rational and irrational thinking, decision-making and creativity are found in the powerful unconscious mind.
You're reading this article with the conscious part of your mind; you're absorbing it with the unconscious part. Choosing to believe, disbelieve, use or discard this article is based upon the beliefs you have stored in your unconscious mind. These day-to-day beliefs are based on your thoughts, memories and experiences from childhood through to this very moment.
Let me give you an example:
Are you afraid you'll run out of money? If you are, then somewhere on the unconscious level your belief system is based on lack. This is called "poverty consciousness."
Why is poverty consciousness so negative and financially limiting? Focusing on lack diverts your energy away from the positive aspects of prosperity. Focus on lack long enough and eventually your belief system about money, prosperity and abundance becomes filled negativity.
What can you do? Strive to focus your energy on the positives. Begin by analyzing your beliefs about the value you're placing on your time, energy and money making abilities.
Let's explore how an abundant mind-set begins. The human mind is composed of two levels: consciousness and unconsciousness. Both work together to create and mold our thoughts, actions and personality.
Understanding and appreciating the unique function and characteristic of each "part" of the mind is vital to understanding how and why you're allowing (or not allowing) prosperity, abundance and wealth into your life.
Abundance is simply a concept. And, as a concept it begins in your mind and works its way out into your everyday life. You either believe you deserve to live in abundance, or you don't. Understanding the "workings" of your mind means understanding how you function on both an unconscious and conscious level. When you allow it to, your mind will be a tireless and powerful success and wealth-building ally.
Here's the difference between the conscious and unconscious parts of your mind:
The conscious part of your mind is the awareness you have of the world and your personal role in it.
~ The function of the conscious mind is to analyze and rationally tie everything together.
~ It's the tangible link between thought, reality and the action you decide to take.
~ Your opinions, likes and dislikes, judgments, prejudices and realities are filtered through the analytical conscious mind.
The unconscious part of your mind controls at least ninety percent of mental activity.
~ Your unconscious mind is a never-ending source for thoughts and memories.
~ Reality is stored and preserved in the "all-remembering" unconscious mind.
~ Your negative and positive thoughts, feelings, memories, emotions and reactions, bodily functions, stress, illness and health, rational and irrational thinking, decision-making and creativity are found in the powerful unconscious mind.
You're reading this article with the conscious part of your mind; you're absorbing it with the unconscious part. Choosing to believe, disbelieve, use or discard this article is based upon the beliefs you have stored in your unconscious mind. These day-to-day beliefs are based on your thoughts, memories and experiences from childhood through to this very moment.
Let me give you an example:
Are you afraid you'll run out of money? If you are, then somewhere on the unconscious level your belief system is based on lack. This is called "poverty consciousness."
Why is poverty consciousness so negative and financially limiting? Focusing on lack diverts your energy away from the positive aspects of prosperity. Focus on lack long enough and eventually your belief system about money, prosperity and abundance becomes filled negativity.
What can you do? Strive to focus your energy on the positives. Begin by analyzing your beliefs about the value you're placing on your time, energy and money making abilities.
Wealth Inside Out
Wealthy to me is the ability to live comfortably and know my family will always be taken care of, no matter what. It's the ability to give financially to those causes I feel make our world a better place. And, it's the ability to be financially independent.
On average, many women are uncomfortable discussing money and even more uncomfortable managing money. How often do you hear women say words like rich or wealthy when describing their finances or goals?
Money and self-esteem go hand-in-hand. You can have a million dollars but if you don't feel you're worth a million dollars, you're still not financially independent.
Let me ask you a question and please take a few minutes with pen and paper to answer. Even allow yourself to feel the emotions of your answer:
If you had three million dollars in the bank right now, how would your life be different?
Look carefully at what you wrote. Are there more positives in your answer or negatives? Does wealth feel like a joyous emotion or a burden? In your mind's eye, can you picture yourself with three million dollars or did it seem like a fantasy?
Let's look at one of the emotional aspects women often deal with when striving for financial independence - guilt.
Simply put, women often feel guilty for having and enjoying money. Why? Because there are people, whether we know them or not, who don't have money. Could there be old programs in the mind saying, "Don't be selfish, share with your sister."
Do you know that studies have found that on average, we'll unconsciously allow ourselves to earn only within ten to twenty per cent of what our friends and family earn? Why do you think that is? You're right. It's guilt. It's the fear that we will not be accepted if we have more money than the other important people in our lives.
Guilt and self-esteem go hand-in-hand. The more secure you are within yourself, the more you'll allow yourself to earn and enjoy wealth.
Instead of looking at wealth and money in terms of guilt, how about looking in terms of how we can be of service to others. Can you think of wealthy women role models who are making a difference with their money? How about Oprah Winfrey? Do you think Oprah feels guilty about being a billionaire?
If you had three million dollars in the bank, how would your life be different?
How could life be more comfortable?
How would you feel knowing you'd never have to worry about money?
Which causes could you support?
Isn't it time we concentrate on the positives of our power, especially our financial power? Wealth truly begins on the inside, inside your heart and mind.
On average, many women are uncomfortable discussing money and even more uncomfortable managing money. How often do you hear women say words like rich or wealthy when describing their finances or goals?
Money and self-esteem go hand-in-hand. You can have a million dollars but if you don't feel you're worth a million dollars, you're still not financially independent.
Let me ask you a question and please take a few minutes with pen and paper to answer. Even allow yourself to feel the emotions of your answer:
If you had three million dollars in the bank right now, how would your life be different?
Look carefully at what you wrote. Are there more positives in your answer or negatives? Does wealth feel like a joyous emotion or a burden? In your mind's eye, can you picture yourself with three million dollars or did it seem like a fantasy?
Let's look at one of the emotional aspects women often deal with when striving for financial independence - guilt.
Simply put, women often feel guilty for having and enjoying money. Why? Because there are people, whether we know them or not, who don't have money. Could there be old programs in the mind saying, "Don't be selfish, share with your sister."
Do you know that studies have found that on average, we'll unconsciously allow ourselves to earn only within ten to twenty per cent of what our friends and family earn? Why do you think that is? You're right. It's guilt. It's the fear that we will not be accepted if we have more money than the other important people in our lives.
Guilt and self-esteem go hand-in-hand. The more secure you are within yourself, the more you'll allow yourself to earn and enjoy wealth.
Instead of looking at wealth and money in terms of guilt, how about looking in terms of how we can be of service to others. Can you think of wealthy women role models who are making a difference with their money? How about Oprah Winfrey? Do you think Oprah feels guilty about being a billionaire?
If you had three million dollars in the bank, how would your life be different?
How could life be more comfortable?
How would you feel knowing you'd never have to worry about money?
Which causes could you support?
Isn't it time we concentrate on the positives of our power, especially our financial power? Wealth truly begins on the inside, inside your heart and mind.
Nevada Unclaimed Money Now Totals Over 200 Million
As of September, NV's state treasurer, Kate Marshall confirmed that the state of Nevada is currently holding over $200 million in Nevada unclaimed money that belongs to the 700,000 citizens. And despite recent efforts, after much criticism in 2006, the Nevada unclaimed property program continues to take in more money than it returns.
According the Marshall, the state has increased its unclaimed money returns to 350-700 claims per week. That's nothing to sneeze at, and Nevada's state treasurer is to be commended, but when you consider that at that rate it would take 20-40 years before they'd ever return all claims currently listed, it's nothing to get too excited about, especially when you consider how much more additional money would come in over those 20-40 years!!!
The bottom line is that people can't rely on the Nevada to reunite them with their funds. The citizens have to take action themselves, if they ever want to be sure they're searching thoroughly and exploring all possible sources of NV unclaimed property. The state has no doubt stepped up their efforts, but there's a long way to go, and I think we can all agree that we the people are far more efficient than any government agency will ever be.
The following are the most common types of unclaimed property in Nevada: Stocks, Checking/Savings Accounts, Death Benefits, Vendor Checks, Over-Payments, Certificates of Deposits, Paid-in-full Life Insurance, Uncashed Checks, Unpaid Wages, Money Orders, Credit Balances, Refunds, Dividends, Commissions, Insurance Payments, Gift Certificates, Customer Deposits. If you or anyone you know have ever had any of these, you owe it to yourself to learn the proper way to search for missing money.
Each of the different types of unclaimed cash sources listed above has it's own unique dormancy period. This is the amount of time that must pass before the abandoned money is considered "unclaimed" and turned over to the state. Depending on the type of fund, the dormancy period can be anywhere from 1 to 15 years. This is important to know, because traditional online searches won't show a record unless the dormancy period has passed, and the state has taken control of your money.
Beyond the fact that the dormancy period has to pass before there will be any sort of online record of your money, there's also the matter of how often Nevada updates their unclaimed money listing. Records are not updated daily, so you can be confident in your search if you look and don't find anything one day, and the state just happens to not add your record until the next day, week, month, or year. This is why rule #1 of searching for missing money is to search frequently.
Additionally not all money belonging to Nevada citizens is in the state of Nevada. Some people may have lived in other states before moving to Nevada, while others may have had dealings with out of state entities, even if they didn't know it. For example, many companies have locations in a number of different states, but they are headquartered in just one state. The same goes for insurance carriers. Even if a company has locations in 20 states, including Nevada, if the company they use for employee insurance benefits is located in some other state, Nevada would never have a record of that money.
In addition to the issues raised above, there are countless problems that people often run in to when searching for unclaimed money in Nevada, which make it all the more important you get expert assistance in tracking down your money.
According the Marshall, the state has increased its unclaimed money returns to 350-700 claims per week. That's nothing to sneeze at, and Nevada's state treasurer is to be commended, but when you consider that at that rate it would take 20-40 years before they'd ever return all claims currently listed, it's nothing to get too excited about, especially when you consider how much more additional money would come in over those 20-40 years!!!
The bottom line is that people can't rely on the Nevada to reunite them with their funds. The citizens have to take action themselves, if they ever want to be sure they're searching thoroughly and exploring all possible sources of NV unclaimed property. The state has no doubt stepped up their efforts, but there's a long way to go, and I think we can all agree that we the people are far more efficient than any government agency will ever be.
The following are the most common types of unclaimed property in Nevada: Stocks, Checking/Savings Accounts, Death Benefits, Vendor Checks, Over-Payments, Certificates of Deposits, Paid-in-full Life Insurance, Uncashed Checks, Unpaid Wages, Money Orders, Credit Balances, Refunds, Dividends, Commissions, Insurance Payments, Gift Certificates, Customer Deposits. If you or anyone you know have ever had any of these, you owe it to yourself to learn the proper way to search for missing money.
Each of the different types of unclaimed cash sources listed above has it's own unique dormancy period. This is the amount of time that must pass before the abandoned money is considered "unclaimed" and turned over to the state. Depending on the type of fund, the dormancy period can be anywhere from 1 to 15 years. This is important to know, because traditional online searches won't show a record unless the dormancy period has passed, and the state has taken control of your money.
Beyond the fact that the dormancy period has to pass before there will be any sort of online record of your money, there's also the matter of how often Nevada updates their unclaimed money listing. Records are not updated daily, so you can be confident in your search if you look and don't find anything one day, and the state just happens to not add your record until the next day, week, month, or year. This is why rule #1 of searching for missing money is to search frequently.
Additionally not all money belonging to Nevada citizens is in the state of Nevada. Some people may have lived in other states before moving to Nevada, while others may have had dealings with out of state entities, even if they didn't know it. For example, many companies have locations in a number of different states, but they are headquartered in just one state. The same goes for insurance carriers. Even if a company has locations in 20 states, including Nevada, if the company they use for employee insurance benefits is located in some other state, Nevada would never have a record of that money.
In addition to the issues raised above, there are countless problems that people often run in to when searching for unclaimed money in Nevada, which make it all the more important you get expert assistance in tracking down your money.
9 Secrets To A New Financial You In 2008!
It also doesn't matter that the housing market is still in a slump and gas prices are crazy. Starting today, your focus needs to be on how to make more money and how to manage what you have coming in. Stop reading or listening to all the negative economic news; it does absolutely nothing for your spirit, or your bank account, and will keep you far away from becoming a millionaire.
Before I get into the 9 secrets, I want you to first take a self- assessment test. Ask yourself the following questions:
* Do I have the true DESIRE to become wealthy?
* Am I willing to do whatever it TAKES -legally-to become wealthy?
* Is it more important for me to have a flat screen television with all the latest technology or would I rather be wealthy? ·
* Is it more important for me to spend $5,000 on a vacation or would I rather be wealthy?
There's no secret to becoming wealthy. It's simply a matter of the day-to-day choices you make that determine whether you will become a millionaire. Eventually, you can have the flat screen television and spend $5,000 on a vacation. But, if you have to use your credit cards to get these things, then it means you can't have them right now. Your focus needs to be on investing in assets that create enough cash flow to allow you to buy the luxuries for cash, not on credit. That's what millionaires do.
So, here are the tried-and-true 9 Secrets To A New Financial You In 2008:
1. Make a committed decision to become wealthy. So many people talk about wanting to make more money or get out of debt, yet, they aren't committed enough to make it happen. And it's not a priority. You got to WANT this! Your spouse can't want it for you, nor can you parents. It's all up to YOU. So make the decision right now that you are going to learn how to invest and make your money work for you.
2. Develop a written financial blueprint. Nothing happens without a plan. The written financial blueprint will serve as your roadmap and force you to do something. It's amazing to me how we'll spend more time planning our vacations, yet won't take the time to plan our money. This year, sit down and write out exactly how much you need to earn, and how you are going to invest. Write down everything you want to financially happen in the different stages of your life-retirement, new baby, kids off to college, etc...
3. Put saving money on automatic pilot. Stop torturing yourself by trying to use your willpower to save money every month. Just have 10 percent of your net monthly income automatically taken out of your check and into a savings account every pay period. If your company won't do this, set it up with your local bank or online banker, such as ING Direct, which happens to pay out one of the highest yields on a savings account. And they don't require a minimum to open the account. www.ingdirect.com
4. Think twice before you spend money. Managing your cash flow every month is key. There is no need for you to be a walking billboard for designer clothes, shoes, sunglasses, or jewelry. The celebrities are not your role models; so don't try to emulate them. Do you really need a Beyonce gold cell phone? I don't think so.
5. Lay off the credit. If you can eat it or wear it, don't put it on your credit card. Let's go a step further, don't put anything on your credit cards that you can't pay off in two or three months. If you have a ton of debt right now, focus your energy on paying if off as quickly as possible. Remember, the interest you are paying, could be going toward a piece of investment real estate, that gives you an extra $500-$1,000 in income every month.
6. Make money with your money. It takes money to make money, but you don't need thousands of dollars to get started. Open an account with a mutual fund company that has no-load funds or a discount brokerage firm such as www.sharebuilder .com and start with $50 or $100 and consistently invest that amount every month. Build a diverse portfolio of stocks, mutual funds, bonds and real estate.
7. Earn passive income in your own business. Entrepreneurs are four times more likely to be millionaires than those who are employees. And you don't need to be a CEO of a fortune 500 company. It can be a part-time Internet business, or a catering business. Find something you are passionate about, do some homework and see if it can be a profitable business.
8. Contribute to your employer retirement plan. I read that only 25 percent of employees are contributing to their 401(k), 403 b), or tax deferred retirement accounts. BIG MISTAKE. If you haven't noticed, most companies are doing away with pension plans, so your retirement falls on you. And please don't depend on Social Security. It will not be enough. Put the maximum into your employer plan, especially if they have a matching program. That's Free money!
9. Last, and actually most important; Get mentored by millionaires. You need a coach, an advisor to walk and guide you through this. You can't do it alone. You need to form a good working relationship with someone that has done it and can show you how to do it. There is no need for you to reinvent the wheel, you can learn the mistakes and the strategies that they used to become millionaires and follow them, so that you too can become a millionaire. These are the role models you want to emulate.
Before I get into the 9 secrets, I want you to first take a self- assessment test. Ask yourself the following questions:
* Do I have the true DESIRE to become wealthy?
* Am I willing to do whatever it TAKES -legally-to become wealthy?
* Is it more important for me to have a flat screen television with all the latest technology or would I rather be wealthy? ·
* Is it more important for me to spend $5,000 on a vacation or would I rather be wealthy?
There's no secret to becoming wealthy. It's simply a matter of the day-to-day choices you make that determine whether you will become a millionaire. Eventually, you can have the flat screen television and spend $5,000 on a vacation. But, if you have to use your credit cards to get these things, then it means you can't have them right now. Your focus needs to be on investing in assets that create enough cash flow to allow you to buy the luxuries for cash, not on credit. That's what millionaires do.
So, here are the tried-and-true 9 Secrets To A New Financial You In 2008:
1. Make a committed decision to become wealthy. So many people talk about wanting to make more money or get out of debt, yet, they aren't committed enough to make it happen. And it's not a priority. You got to WANT this! Your spouse can't want it for you, nor can you parents. It's all up to YOU. So make the decision right now that you are going to learn how to invest and make your money work for you.
2. Develop a written financial blueprint. Nothing happens without a plan. The written financial blueprint will serve as your roadmap and force you to do something. It's amazing to me how we'll spend more time planning our vacations, yet won't take the time to plan our money. This year, sit down and write out exactly how much you need to earn, and how you are going to invest. Write down everything you want to financially happen in the different stages of your life-retirement, new baby, kids off to college, etc...
3. Put saving money on automatic pilot. Stop torturing yourself by trying to use your willpower to save money every month. Just have 10 percent of your net monthly income automatically taken out of your check and into a savings account every pay period. If your company won't do this, set it up with your local bank or online banker, such as ING Direct, which happens to pay out one of the highest yields on a savings account. And they don't require a minimum to open the account. www.ingdirect.com
4. Think twice before you spend money. Managing your cash flow every month is key. There is no need for you to be a walking billboard for designer clothes, shoes, sunglasses, or jewelry. The celebrities are not your role models; so don't try to emulate them. Do you really need a Beyonce gold cell phone? I don't think so.
5. Lay off the credit. If you can eat it or wear it, don't put it on your credit card. Let's go a step further, don't put anything on your credit cards that you can't pay off in two or three months. If you have a ton of debt right now, focus your energy on paying if off as quickly as possible. Remember, the interest you are paying, could be going toward a piece of investment real estate, that gives you an extra $500-$1,000 in income every month.
6. Make money with your money. It takes money to make money, but you don't need thousands of dollars to get started. Open an account with a mutual fund company that has no-load funds or a discount brokerage firm such as www.sharebuilder .com and start with $50 or $100 and consistently invest that amount every month. Build a diverse portfolio of stocks, mutual funds, bonds and real estate.
7. Earn passive income in your own business. Entrepreneurs are four times more likely to be millionaires than those who are employees. And you don't need to be a CEO of a fortune 500 company. It can be a part-time Internet business, or a catering business. Find something you are passionate about, do some homework and see if it can be a profitable business.
8. Contribute to your employer retirement plan. I read that only 25 percent of employees are contributing to their 401(k), 403 b), or tax deferred retirement accounts. BIG MISTAKE. If you haven't noticed, most companies are doing away with pension plans, so your retirement falls on you. And please don't depend on Social Security. It will not be enough. Put the maximum into your employer plan, especially if they have a matching program. That's Free money!
9. Last, and actually most important; Get mentored by millionaires. You need a coach, an advisor to walk and guide you through this. You can't do it alone. You need to form a good working relationship with someone that has done it and can show you how to do it. There is no need for you to reinvent the wheel, you can learn the mistakes and the strategies that they used to become millionaires and follow them, so that you too can become a millionaire. These are the role models you want to emulate.
Six Steps To Financial Freedom
Being a member of the International Marketing Group (IMG), I am so blessed to have learned the concepts of financial management at this early stage of my life. I may still be starting out, but at least I've got the fundamentals of financial management correct now.
I've always believed that God wants me to be responsible for my time, treasures and my talents. I have worked hard to manage my time and talents but it is my treasures that I have no idea of managing.
My best friend in high school introduced me to IMG just this year 2007 and I am glad I became a part of the company. My blog schedule for today is on financial management so I want to share with you IMG's 6 steps to Financial Freedom and how it has applied to me:
1.) Increase cash flow
a.) Earn Additional income
b.) Manage expenses
- I have strived to follow the first step by earning both active and passive income through IMG's system. I have also managed to teach part time and at the same time explore the possibilities of earning income online. With regards to the expenses, it is important that I list down all my expenses and work within a budget. That is what I had been doing now for months.
2.) Manage debt
a.) Consolidate Debt
b.) Strive to eliminate debt
- I've managed debt by resorting to lower interest rates. I have availed of balance transfer features. The regular interest charged by credit card companies is 3.5 % per month. But if you avail of balance transfer features by "transferring" your debt to other credit cards then you can avail of 0.99 % interest per month. I have discussed this extensively in my post entitled "Getting out of the credit card debt mess."
3.) Create emergency fund
a.) Save at least six months income
b.) Prepare for emergency expenses
- This is something I have not done yet, but will be planning to do in the months or years to come. Once debt is eliminated I can now start to save at least 6 months income. This is just to ensure that you are liquid enough in case there are some things that must be bought with in cash. This could also be used for emergency expenses.
4.) Ensure proper protection
a.) Protect against loss of income
b.) Protect Family assets
- I have achieved this through availing of insurance. Insurance policies protect loss of income by compensating the person insured and his loved ones if ever the person insured losses the capacity to produce active income because of death or accident. Protecting family assets is also achieved by availing of non-life insurance such as fire insurance etc.
5.) Build long-term asset accumulation
a.) Outpace inflation
b.) Reduce taxation
- This is normally what is known as the "investment" stage. If you are "investing" in something that is less than the inflation rate then you loose in the long run. Always make sure that you are investing above the inflation rate. For some who still does not understand what inflation rate means and how it could affect you I will probably discuss it in a future post. Most experts suggest that if you are in the Philippines you should invest in something that is above 7 % (Even if now the inflation rate is below 2 % +) Currently you cannot put your money in the bank an expect a return of above 7 % since interest for savings is way below 2 % and interest for time deposit accounts is from 3 to 5 %
Clearly, the only way to achieve this is through the stock market, mutual funds investments and other types of investments giving you a return of more than 7 % per annum.
With regards to taxes, remember that the government taxes income, not wealth.
6.) Preserve your estate
a.) Help Reduce estate taxes
b.) Build a family legacy
This is something that I plan to do probably 20 years from now. There are a lot of ways to achieve this. I would probably tackle this in another post since this is a somewhat complicated topic. ]
This is the overview of IMG's financial strategy which I have strived to religiously follow. The steps must be followed sequentially. It is advisable that you should go through them one step at a time. However since I have learned about this just lately, I have managed to invest without first eliminating my debt. I should have eliminated my debt first and investe later. But I believe that it still worked out for my advantage since the year 2005 to 2010 is considered by many experts as "a window of investment opportunities" considering that the stock market is at it's highest and the fundamentals of the Philippine economy are in place. I will discuss more on financial strategies on my future posts.
I've always believed that God wants me to be responsible for my time, treasures and my talents. I have worked hard to manage my time and talents but it is my treasures that I have no idea of managing.
My best friend in high school introduced me to IMG just this year 2007 and I am glad I became a part of the company. My blog schedule for today is on financial management so I want to share with you IMG's 6 steps to Financial Freedom and how it has applied to me:
1.) Increase cash flow
a.) Earn Additional income
b.) Manage expenses
- I have strived to follow the first step by earning both active and passive income through IMG's system. I have also managed to teach part time and at the same time explore the possibilities of earning income online. With regards to the expenses, it is important that I list down all my expenses and work within a budget. That is what I had been doing now for months.
2.) Manage debt
a.) Consolidate Debt
b.) Strive to eliminate debt
- I've managed debt by resorting to lower interest rates. I have availed of balance transfer features. The regular interest charged by credit card companies is 3.5 % per month. But if you avail of balance transfer features by "transferring" your debt to other credit cards then you can avail of 0.99 % interest per month. I have discussed this extensively in my post entitled "Getting out of the credit card debt mess."
3.) Create emergency fund
a.) Save at least six months income
b.) Prepare for emergency expenses
- This is something I have not done yet, but will be planning to do in the months or years to come. Once debt is eliminated I can now start to save at least 6 months income. This is just to ensure that you are liquid enough in case there are some things that must be bought with in cash. This could also be used for emergency expenses.
4.) Ensure proper protection
a.) Protect against loss of income
b.) Protect Family assets
- I have achieved this through availing of insurance. Insurance policies protect loss of income by compensating the person insured and his loved ones if ever the person insured losses the capacity to produce active income because of death or accident. Protecting family assets is also achieved by availing of non-life insurance such as fire insurance etc.
5.) Build long-term asset accumulation
a.) Outpace inflation
b.) Reduce taxation
- This is normally what is known as the "investment" stage. If you are "investing" in something that is less than the inflation rate then you loose in the long run. Always make sure that you are investing above the inflation rate. For some who still does not understand what inflation rate means and how it could affect you I will probably discuss it in a future post. Most experts suggest that if you are in the Philippines you should invest in something that is above 7 % (Even if now the inflation rate is below 2 % +) Currently you cannot put your money in the bank an expect a return of above 7 % since interest for savings is way below 2 % and interest for time deposit accounts is from 3 to 5 %
Clearly, the only way to achieve this is through the stock market, mutual funds investments and other types of investments giving you a return of more than 7 % per annum.
With regards to taxes, remember that the government taxes income, not wealth.
6.) Preserve your estate
a.) Help Reduce estate taxes
b.) Build a family legacy
This is something that I plan to do probably 20 years from now. There are a lot of ways to achieve this. I would probably tackle this in another post since this is a somewhat complicated topic. ]
This is the overview of IMG's financial strategy which I have strived to religiously follow. The steps must be followed sequentially. It is advisable that you should go through them one step at a time. However since I have learned about this just lately, I have managed to invest without first eliminating my debt. I should have eliminated my debt first and investe later. But I believe that it still worked out for my advantage since the year 2005 to 2010 is considered by many experts as "a window of investment opportunities" considering that the stock market is at it's highest and the fundamentals of the Philippine economy are in place. I will discuss more on financial strategies on my future posts.
Monetary Pressures Can 'Strain' A Relationship
More consumers are preparing themselves for the strain their finances will see over the Christmas period, according to new figures.
In research conducted by Engage Mutual, 88 per cent of the Britons who share their finances with a partner state that they are willing to make monetary sacrifices to keep up a certain standard of living for their significant other. The study revealed that about one out of five are ready to work extra hours in order to provide their loved ones with the things that they want. Meanwhile, just under a third (30 per cent) are looking to cut back on buying luxuries for themselves, with the taking out of a loan another possible way in which to help them to give what their partner wants.
The survey also indicated that seven per cent of those in a relationship would be willing to borrow money, whether this be through a cheap personal loan, credit card or other means, to support their partners' wishes. Meanwhile, some 21 per cent state that they are prepared to withdraw funds out of a savings account.
In addition, findings from the firm revealed that men are most likely to make financial sacrifices. More than a third (35 per cent) of males are ready to go without buying new clothes and other luxuries, in comparison to 25 per cent of women. Meanwhile, four per cent of females would consider ending a relationship, if they felt that they were under pressure to stop buying things for themselves in order to provide for their partner.
Karl Elliott, 3GB spokesperson for Engage Mutual, said: "It is encouraging that rather than taking on further debt, people are prepared to work longer hours and cut back on spending in order to treat their partner. Increased financial pressure could put strain on some relationships. However, as this research shows, preparedness amongst couples to support each other financially shows that the population are prepared to go without themselves in order to provide for their loved ones."
The research also unveiled that 41 per cent of people from the north-east of England are willing to forgo clothes and luxuries in order to save more money to help keep their other half content. Those in the midlands are most likely to give up a night out on the town to cut back on spending, as such people account for 28 per cent of those from the region. Consumers living in Yorkshire, however, are the least prepared to do this, with only 12 per cent prepared to stay in to save cash.
Engage Mutual also pointed to research carried out by the Telegraph and uSwitch indicating that disposable income has reached its lowest point in a decade. And with the festive season just a few weeks away those who find that they are struggling to save money to help provide for their loved ones may find that a loan could be an answer to financial problems.
However, should consumers consider getting a loan, they may be advised to be upfront with their significant other. A recent study carried out by Cater Allen Private Bank earlier this week indicated that 30 per cent of consumers are keeping a financial secret from their partner, ranging from having a personal loan to a clandestine savings account. Managing director Richard Dunn reported that such secrecy indicates consumers are unwilling to talk about money, despite the fact that such discussions with loved ones can often act as the first step in people getting back on their fiscal feet.
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