A new year. A new chapter in our lives!
Many people set goals for themselves at the start of each year and in many cases “money” is included.
Everyone uses money. We all want it, work for it and think about it. If you don’t know what money is, you are not like most humans.
Everyone has a different meaning of money. Whatever your opinion of money is, reality is that it’s a necessity. Without money, you can’t buy food and shelter… which are two basic human needs for survivorship (as a minimum).
A common trend I see in my day to day work, is that most people don’t have a “money” strategy. Think about it, if money is such an important commodity in our lives, why is it that most people don’t have a strategy for making money, spending money, investing money, and growing their money to enjoy more of what life has to offer?
What is a money strategy?
To develop an effective money strategy, you first need to understand the meaning of “strategy”. The (simple) meaning of strategy is “…a plan of action designed to achieve a long-term or overall aim”.
Taking action without a plan is like going on a road trip with no road map on how to get there. There’s a good chance you’ll get lost!
Therefore a money strategy should include a plan of actions designed to help you better understand:
How much money you want?
How much money you want to make?
How you plan to make it?
How you plan to hold onto it?
How do you plan not to waste it?
How do you plan to grow it?
There is no right or wrong money strategy. The above points are merely to provoke your thinking and help you formulate a money strategy.
Ideas to get you started
Here is a list of ideas which may help. I’m sure there are many more (and many different ones too). This is what comes to my mind right now…
What’s your number? i.e. how much money do you need invested in assets to spin off cash (passive income) without you having to work?
What assets are you most comfortable with to invest in? Is it residential property? Shares? Managed funds?
What knowledge are you missing to help you invest and create more wealth? How are you going to bridge your knowledge gap?
What is your current debt position? And how much of it is good debt versus bad debt?
What timeframe have you set yourself to pay off your home loan? To pay off your other debts? And how are you going to do it?
How much equity do you currently have? Is your equity put to good use or is it just sitting around as lazy equity?
Are you sure that you have the best home loan deal(s)? When was your mortgage(s) last reviewed?
How much money can you save right now by refinancing and putting the savings towards your future?
Are you paying a membership which you no longer use? (e.g. gym)
When was the last time you reviewed your insurance premiums? Or do you just pay the renewals when they come in the post?
Are you paying the least for your household utilities (e.g. gas, electricity)? Or are there better deals out there?
Do you know where your money is going? Do you know what your highest expenses are? Do you track your expenditure?
Do you have a savings plan so that you can start investing more money and grow your wealth faster?
As you’ve heard me say before, if you aim at nothing you’ll hit it every time!!!
The meaning of insanity is to do the same things over and over again but expect a different outcome.
Start planning your financial future today. Put pen to paper and formulate your money strategy. I promise you, once you know what you want it will happen!
Hope you have a great 2016 and feel free to contact us if this is something you want to tackle but need a helping hand.