Victorious Life Management
Successful financial management is a lifelong process that requires the careful consideration of a number of factors and the development of a strategic plan that covers all of your financial bases. Below you will find keys to financial success that will help you keep and control your money and secure your financial future. KEY I: Wealth Wisdom- Learn to make wise financial decisions. Money is important and you need money. You need enough money! The Bible says, in Ecclesiastes 10:19, that money answereth all things. This does not mean that money will solve all of your problems. It does mean that money influences everything and without money life is much more difficult. In fact, Ecclesiastes 7:12 names two defenses: wisdom and money. Without these two things, you will be defenseless and far more subject to victimization than people with the knowledge and means to protect themselves. Use competent financial advisors and under their tutelage, set aside time each month to study the proper handling of money and how to build wealth.
KEY II: Wealth Retention - Don't spend every dime you get. Retain some of the money you make. After paying 10% of your gross income to the Lord (the tithe) you should save 20% of your money. This principle was practiced by Joseph who set aside 20% of the crops in Egypt in an act of prudence that allowed the nation of Egypt to survive when the famine came. (Genesis 41: 34-36). If you are unable to save 20% at this time, save a smaller percentage. Whatever the percentage, be consistent.
KEY III: Wealth Acquisition - Most wealthy people amassed money by concentrating on gathering a specific type of income. There are 3 types of income: earned income, portfolio income and passive income. Earned income is the money you make at your job where you get paid every two weeks. Earned income stops when you stop working. Portfolio income is the money you make from investments such as stocks and bonds. Passive income is money made continuously from an item or investment such as rent from tenants living in real estate you own or royalties from a successful book you have written. The key to amassing money is to channel as much of your earned income as possible into portfolio and passive income ventures that will bring you money continuously. If you spend all of your earned income on clothes, shoes and other depreciating items that will not bring you money you will not be able to build wealth. Accumulate assets such as rental property that put money into your pocket. Do not accumulate liabilities that look like assets but take money out of your pocket (luxury cars, fine clothes, expensive shoes, etc.)
KEY IV: Wealth Protection- Protect your money and assets by purchasing adequate insurance. Proverbs 22:3 says the prudent man foresees the difficulty and plans for it while the simple man goes ahead without planning and suffers the consequences. If you go without insurance, you may face grave consequences. One lengthy hospital stay could wipe out all of your money if you have no health and disability insurance. One bad car accident for which you are at fault could cause you to be sued and lose your assets if you do not have auto insurance. One hurricane or other disaster such as a fire could cause you to lose your home and not be able to rebuild it if you don't have adequate homeowner's insurance. Your death or the death of your spouse could adversely affect the economic well being of your children if you are without adequate life insurance and you have minor children who still have educational and personal needs. Make sure you have adequate insurance to protect the money and assets you have accumulated.
KEY V: Wealth Accumulation - Invest your money to accumulate wealth. Investments are based upon research and intelligent projections. What is the rationale for the investments you currently have? Ask yourself these questions before you invest: Do I have a plan? What is my time frame? How much can I afford to use? How much time am I willing to use understanding the company or investment I am considering? Whey is somebody selling this stock?
KEY VI: Wealth Preservation. It has been said that the difference between an old man and an elderly gentleman is money! The ability to live out your days in comfort and dignity is heavily dependant upon your ability to preserve your money for retirement! This is why you need to know how much money you need to retire in dignity. Divide your monthly income by 0.008 and you will see how much money you need to retire!!! For instance, if your gross monthly income is $5000.00 and you would like to live at a $5000.00 per month standard of living when you retire, you need a retirement nestegg of at least $625,000.oo From your calculation, do you have enough money set aside so that you can support yourself using the same monthly amount you used in your calculation?
KEY VII: Wealth Distribution - You need a will or wealth distribution plan. This is a prudent means of making sure you minimize estate taxes, cut court costs and attorneys fees and transfer your assets to the people you choose. You worked hard for the things you own. Therefore you should make sure they go to the people you want to have them. Otherwise, the IRS, attorneys and others may end up with your money. Hire a competent lawyer to do a well thought out estate plan in accords with your desires.
As you evaluate your finances, be sure you consider the seven areas mentioned above so that all of your financial bases are covered. In summary, learn to make wise financial decisions. Save money for emergencies and for your future. As you save money, wisely channel this savings into portfolio and passive income investments using competent financial and legal advisors. Invest based upon research and intelligent projections. Make sure the amount you are saving is enough to allow you to retire in dignity. Use insurance to protect against the loss of money and assets you have accumulated. Leave a legacy for your family and loved ones by giving them your money and assets through proper estate planning.