Managing your Personal Finances Wisely

Moneywise24 Personal Finance



Where Did The 100 Euros Go? 5

Posted on August 17, 2010 by admin

I found myself in a typical situation yesterday, one that I have been trying to avoid since 2009. I was going over my checking account balance, and discovered a missing 100 Euro amount. Something wasn’t right, I felt like someone had stolen it.

I took a good look at my finances, and found an incredible amount of 100 Euro booked to the category ‘to go products’; I use this category for all unnecessary food and beverage items, which are bought quickly when I am going from A to B. Back in 2009, I just bought an item when I felt like it. I might have bought a coffee to go, even knowing that I’d be home in 2 minutes. I still do it every now and then, but usually only in the morning on my way to work, knowing that I’ll be traveling for an hour or so. But now, 100 Euros extra! An yes, having taken a quick glimpse in my ‘to go products’ category, I find the criminal: Starbucks.

I have to admit one thing though: Starbucks has launched a great and unique concept. They actually manage to sell qualitative, but overly-priced food and beverages. I am not sure about pricing in the States, but at Starbucks a muffin costs nearly as much as a sandwich at the bakery store. And I know a muffin will only compensate for that hungry feeling for 30 minutes or so. Still, their concept is so good, that it keeps drawing me inside when I pass. Yes, the frappuchinos are great, and so is the white coffee mocca, although I don’t want to know how many calories are in there.

As a rule of thumb, I always eat something when I go to the supermarket; it prevents me from buying all that food that I don’t need, and I can’t eat it all before it goes bad anyway. Now, I have to eat and drink before I leave the house, because Starbucks is waiting for me around the corner.

My action for change: every time I think about buying something at Starbucks, resist the urge and put 3.50 Euros to the side. When it reaches 100 Euros, invest the money.

Once I think about it… even if I’d spare myself 3 coffees at Starbucks each week, that would be 546 Euros per year that I could invest. At an annual rate of 8%, that is 66,801 Euros in 30 years, or by the time I retire.

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Mind Your Own Business!! 0

Posted on August 12, 2010 by admin

I finished reading CASHFLOW Quadrant, by Robert T. Kiyosaki yesterday and I feel a bit obliged to write about it. On the one hand, because the book is partially filled with incomplete information, being too vague, and for some part promoting illegal practice (e.g trading stocks based on insider information), on the other hand because the book still does make some good points… and it’s a great motivational book by the way. I know, I know, when I read my first book of Robert Kiyosaki, I was quite positive about him, until I did some further research on the topic.

The Cashflow Quadrant basically describes four different quadrants, which characterize how people earn their money. Without wanting to go into too much detail, the left side of the quadrant represents employees and self-employed people, which count for around 80% of the world population and possess about 5% of the wealth on this planet. The right side of the quadrant represents the 20% of the population possessing 95% of all wealth: business owners and investors.

This means, that people on the left side of the quadrant are putting time and effort into a businesses, which are owned by people on the right side of the quadrant, and they get a small fee for doing so. Therefore, the one and only way to reach true financial freedom is to switch from being employed, to owning a business or becoming an investor.

The CASHFLOW Quadrant is not only a great motivational book, but it highlights a way of thinking, which most people are not familiar with; it tries to pull people away from their inner reality, which is usually to work hard and make a career at a large and noteworthy company, and to give them a taste of what life would be like if they would mind their own business, in stead of someone else’s business.

Robert Kiyosaki does give some real life examples, such as investing in real estate and then having someone renting it to pay back mortgage. Additionally, his advice is more based on psychology and ‘attitude matters’, than on the science of doing business.

Still, one phrase which caught my attention was ‘Mind Your Own Business‘. Relating this to what I read in the CASHFLOW Quadrant, and relating this also the all the negative criticism, I give it two meanings:

  • Reaching true financial freedom and exceeding the living standards of the average working population (this last phrase is important to me, as some people might find an average employee’s salary as satisfying) means building my own business and investment activities; it means that the time of work I put in my activities is detached from my earnings, and it means that I should be minding my own business, instead of someone else’s business.
  • Having greater confidence in my abilities, especially in my abilities to learn by doing. It is very easy to gain more and more, and even more information from various books, mentoring sessions, or coaching seminars… but many so-called gurus’ main business is just being a guru. Knowing this, I find greater potential in myself to select information I can truly learn from, from recognized authors in their field, and to take small steps towards building wealth and learn from that.

Mr. Kiyosaki seems to be under the attack of many criticists, obviously not without reason, claiming that Robert Kiyosaki is a motivational speaker rather than a refined business man, and fully incapable of providing financial advice. If you want to read more about criticism on Robert T. Kiyosaki and his work, you can visit John T. Reeds site, or the article ‘Rich Men, Poor Advice’ on the Wall Street Journal.

Rich Men, Poor Advice

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Learning How To Prosper 2

Posted on February 03, 2010 by admin

wltAuthor: David Beairsto

Becoming Healthy, Wealthy and Wise

Change is essential for anyone wanting to make a difference in this world. Knowing how to prosper, like knowing any process, starts by embracing change as a way of lfie.

Moving from one fixed point to a desired conclusion requires action. Action by definition is the opposite of being fixed or permanent. While our current state and our desired conclusion may be inactive reference points, the process of moving from the beginning to the end is fraught with activity.

You Can’t Win Unless You Finish The Race

Failing never prevents anyone from obtaining their goal. The only reason we don’t win the prize is if we stop trying. Failure is the trophy of endurance to the one who prospers. Failure is also the prize for the one who quits.

Persistence takes failure into account. Like difficulties and obstacles they are expected in the pursuit of success. Persistence holds fast to the plan designed to carry us toward the goal. Persistence is also insistent, that no other goal be substituted for the original. Failure and quitting are not goals to the persistent person.

Not Who I Am But Who I Intend To Be

We learn how to prosper in business by first learning to prosper in personal development. If we aren’t willing to grow and change personally on a consistent basis, it isn’t likely we’ll discover these character traits elsewhere.

The prosperity mindset begins with thoughts intended to change the person. By conditioning our minds to think differently, we in turn act differently. Our behavioral patterns lead us toward a prosperous conclusion as a result of thinking differently.

An honest assessment of our current condition is as necessary as knowing who we intend to become. Without a fixed reference point, we can’t map out an exact route. When we encounter obstacles that change our direction, we need a reference point in order to focus on the goal again.

Don’t Be Afraid To Stop And Ask For Directions

When this practice is applied to our business we already understand the pattern. Regular assessment allows for adjustment in our plan.

We don’t like to get turned around or lost in pursuit of our goal. Whether in personal development or business, retracing our steps is a waste of time.

By first learning to be open and transparent about ourselves, we become willing to allow others to bring fresh insight to our plans. When it is positive in nature, external input can give insight that we might otherwise miss again and again.

As the process becomes more involved, we generate an increasing number of specific plans. Each one has a unique starting point and goal. They all lead us toward our main objective, like adding lanes to a highway increases the speed and flow of traffic.

Stronger Foundations Support Larger Structures

If for instance, I learn to wake up at 6am to focus on reading, but fail to improve my self discipline, I may not use that time consistently. They work together.

I used to coach young children in soccer. They loved to run, but learning ball control disciplines was far more difficult for them. They either ran past the ball, or kicked it too far out in front of them. Only a few were able to do both successfully. Everyone else chased them around the field.

As we learn how to prosper, we begin to detect weakness. With the proper mindset we view weakness as a learning opportunity. We prosper directly by learning to transform weakness into strength; inability into capability.

Like road signs telling us where we are, weakness identifies our current location and helps us decide which way to go. In the same way failure identifies a dead end process as a lesson of value.

On the race toward success we condition ourselves to welcome weakness, failure and difficulty as profitable resources. When we think of them as such, we are able to use them to build a solid foundation.

It Isn’t A Matter Of Luck Or Chance

We can only prosper in proportion to what we’re willing to give in exchange. If I’m willing to read self improvement books from different authors on a consistent basis, I can expect a greater level of personal growth; provided that the knowledge I gain is organized into a plan for self improvement.

If I desire to become a millionaire while working for a set salary I should consider the time it would take to accomplish that goal. My will may keep me from relinquishing the desire to pursue this goal, but time might run out before I get there.

By taking some of my income to invest in the stock market, I increase my potential to become a millionaire. If I choose to exchange my free time for the purpose of learning how to invest my money, that time investment improves my chances.

An even better plan is starting a business. The entrepreneur understands the importance of limitless potential. Beyond the ability to write your own paycheck, is the ability to write an even larger one every day. Prosperity ultimately becomes the process.

One of the greatest assets to learning how to prosper is that we can share both the plans we followed and our experience with others. Living in prosperity is the objective behind the learning process. People who live prosperous lives are an encouragement to anyone who wants to succeed.

Article Source: http://www.articlesbase.com/wealth-building-articles/learning-how-to-prosper-1789070.html

About the Author

David Beairsto, author and owner of http://NetworkFisher.com truly believes that if you give a man a fish you feed him for a day, but if you teach a man to fish you feed him for a lifetime. Knowing how to succeed in business online or offline is a matter of becoming a master marketer and learning how to prosper. Successful businesses are continually defined by their ability to effectively market their product or service. Visit our website at http://DavidBeairsto.com to follow us in our effort to transform ordinary people into successful entrepreneurs, one by one.

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The Difference between Needs and Wants 1

Posted on November 15, 2009 by admin

We all want a big estate, a powerful car, stylish clothes from the finest brands, and so on. While many of these things certainly can be realised, having a grip on your finances is all about identifying your own and personal ‘needs’ and ‘wants’, and acting accordingly.

Let us look at what a ‘need’ is in the first place. Basically, a ‘need’ is anything which makes it possible for you to live in a safe environment and to reproduce, at least that’s how I look at it. This includes food, water, shelter, love and sex (including also social contacts). Be honest to yourself: do you really need anything else to survive? However, these basic needs may cause you to live fairly uncomfortable in the modern world. For this reason, I want to take it one step further for the purpose of this article and re-define what a ‘need’ is:

A ‘need’ is anything which makes it possible for a human being and his/her family to life a comfortable and exciting life.

Following this definition, what a person needs differs per individual. No two individuals are completely the same, and their needs may lie far apart.

Have you ever heard one of your friends say ‘but I needed this new pair of shoes’, knowing that the pair will end up in the closet together with 52 other pairs? Probably yes, and this is the essence why many people end up in a situation of debt, sometimes so severe that there is no way out of it but to file for personal bankruptcy (if you are such a person, please seek professional help from an independent advisor; the information on this website will not be sufficient to eliminate your debt).

Knowing the difference between needs and wants, it is essential to ask this question each time. If you are not used to it, it is very easy to let yourself go in the process. If you have a credit card readily available, it does not make things easier. The essence is that each purchase should contribute to the quality of your life significantly; it should enhance and enrich your life. If this is not the case, you may do yourself a big favour and leave the item where it is.

Reminding myself of my own definitions of ‘needs’ and ‘wants’ have significantly helped me to keep my own finances in control.

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