A QUESTION TO CONSIDER:
Many are feeling the pinch financially. The cost of living keeps climbing and many are battling to keep up.
Against this backdrop, I want to share A SIMPLE RECIPE THAT CAN HELP YOU BUILD TOWARDS FINANCIAL FREEDOM
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PRACTICAL WEALTH BUILDING PRINCIPLE:
Surveys around the world show that many are often left with “more month than money”. This leads to a strained cash flow, higher debt levels, and elevated stress levels. Unfortunately, this also stops people from dreaming, as a lack of cashflow prevents one from being able to build up savings and investments, which are essential to attain any form of financial freedom.
God does not want you to live this way.
BUILD GOOD HABITS
In order to turn your financial situation around you need to exchange bad habits for new good habits.
A habit is something that if practiced, and if regularly repeated, becomes a routine, or an automatic way of life.
Think about driving a car. When you first start driving a car, it can be a bit overwhelming and confusing. But, when you practice driving, it becomes easier. After a few years of driving, you just do it, with very little thought.
A habit usually takes time to form, but once formed, it becomes a way of life.
The same is true with financial habits. Starting a new financial habit can be difficult, but if you stick to it and make it part of your routine, it just becomes a way of life.
Many just blindly follow the same monthly routine with no thought to the way they conduct their financial affairs. But there is some good news for you…
You can break the bad habit cycle and form good financial habits!
1.) KEEP GOOD FINANCIAL RECORDS
Proverbs 27:23-24 … “Be sure you know the condition of your flocks, give careful attention to your herds; for riches do not endure forever, and a crown is not secure for all generations.”
In Bible times your wealth was often made up of your flocks and herds. If you knew the value of your flocks and herds you would know the value of your assets. As Rick Warren said, “Today, instead of knowing the state of your “flocks”, you need to know the value of your “stocks” – your assets and investments.”
If your “flocks or stocks” are looking pitiful, you can do something about it. This scripture is basically saying that you need to know what is up with your finances. You need to be aware of your current state of affairs. You need to understand your finances.
2.) KNOW YOUR NUMBERS
In order to build towards financial freedom, you need to know your numbers …
- WHAT DO YOU OWN? (ASSETS)
- WHAT DO YOU OWE? (LIABILITIES)
- WHAT DO YOU EARN? (INCOME)
- WHAT DO YOU SPEND YOUR MONEY ON ? (EXPENSES)
Your financial numbers will let you know the condition of your financial affairs. It will point out where your problem areas lie, and will also give you a clear picture of your wealth portfolio.
If you keep a good record of “what you own” (Assets) and “what you owe” (Liabilities), and if you manage your money well by tracking “what you earn” (Income) and “where it goes” (Expenses) you will put yourself on the road to financial freedom.
Do you know what is going on with your money?
3.) KNOW THE VALUE OF YOUR WEALTH PORTFOLIO
- WHAT DO YOU OWN? (ASSETS)
- – WHAT DO YOU OWE? (LIABILITIES)
- = WEALTH PORTFOLIO
Your Wealth Portfolio will show you what your net worth is. In order to build towards financial freedom, you need to build up your wealth portfolio. To do this you simply need to GROW YOUR ASSETS and SHINK YOUR DEBTS.
4.) KNOW WHAT YOUR CASH FLOW LOOKS LIKE
- WHAT DO YOU EARN? (INCOME)
- – WHAT DO YOU SPEND YOUR MONEY ON? (EXPENSES)
- = YOUR CASH FLOW
There are only two ways to have a positive cash flow. Either you need to earn more or spend less.
If you have a negative cash flow, you will not be able to build wealth. If your cash flow is tight or negative you need to seriously …
- review your budget,
- plug spending leaks,
- cut all unnecessary expenses.
Debt repayments often erode cash flow. If your debts are a problem, do your best to settle your liabilities as this will improve your cash flow. You can even consider downgrading your lifestyle expenses for a season, in order to reduce your costs and to turn your financial affairs around.
If you can spend less than you earn, you will generate positive cash flow. This will take the pressure off and will allow you to build towards financial freedom.
And, if you shrink your liabilities, by not taking on new debt and actually paying your debt off, you will improve your cash flow and be able to put more into your investments thereby growing your asset base.
And, if you build up your assets by spending less than you earn, and rather investing more of your income, you will build your Wealth Portfolio.
5.) THE SIMPLE RECIPE TO HELP YOU BUILD TOWARDS FINANCIAL FREEDOM
The recipe is simple.
- YOUR ASSETS – WHAT DO YOU OWN?
- YOUR LIABILITIES – WHAT DO YOU OWE?
- YOUR INCOME – WHAT DO YOU EARN?
- YOUR EXPENSES – WHAT DO YOU SPEND YOUR MONEY ON ?
- If you can cut down your liabilities, you will have less debt.
- This will help to reduce your monthly expenses, as you will not have to pay the extra debt instalments.
- If your expenses reduce, your cash flow will improve.
- If your cash flow improves, you will have more money available to invest.
- If you invest more, you will build your assets.
- If you build your assets you will build towards financial freedom.
In a nutshell, the recipe to help you build towards financial freedom is simply to: TURN YOUR INCOME INTO ASSETS.
- Over time, if you continue to turn your income into assets, you will build your WEALTH PORTFOLIO.
- This will generate more income. Your assets will grow and will also bring in extra income in the form of rental income, interest and dividends.
- As you TURN YOUR INCOME INTO ASSETS, you will BUILD YOUR WEALTH PORTFOLIO. This will set you on the journey towards FINANCIAL FREEDOM.
KEEP IT SIMPLE
Why not keep good financial records…
- Do your best to limit your liabilities and grow your assets.
- Live within your means by spending less than you earn.
- Make sure that you save before you spend.
By following this recipe, you will build up your assets and investments over time, and your cash flow will improve. Your investment portfolio over the long term will generate growth, which over time should start producing sufficient passive income to fund your future living expenses. This recipe will help you build a Wealth Portfolio.
It all starts with managing your money well.
You need to know what is going on with your money.
Keep good records. Track your finances. Budget. Be disciplined. Live within your means.
Make a conscious effort to save before you spend. Build good financial habits. Build up your assets by turning your income into assets. This simple recipe will set you on the path towards financial freedom.
One last thing …
Put God first: God is interested in you and He cares. Put your hope in Him and follow His lead. Remember that God wants to walk the journey with you.
Proverbs 3:9-10 … “Honor the Lord with your wealth, with the first fruits of all your crops; then your barns will be filled to overflowing, and your vats will brim over with new wine.”
According to Jon Dulin in his article “Incredibly Fun Facts About Money I Bet You Didn’t Know”, he writes that “Germans used money as wallpaper”. After World War I, hyperinflation wreaked havoc on the German currency, causing it to lose almost all of its value. As a result, people would give money to kids to play with, and many people used it as wallpaper.”
Let us pray that this does not happen again.
POWER QUOTE OF THE WEEK:
“Don’t save what is left after spending; spend what is left after saving.” – Warren Buffett
If you are in a habit of paying your bills each month, only to discover that there is nothing left to invest, reverse your money tactics. INVEST FIRST and then spend what is left over. This strategy will lead to a fruitful financial future.
WHAT DOES GOD HAVE TO SAY:
Proverbs 13:11 says “…he who gathers money little by little makes it grow.”
Consider cutting back on your expenses, and start investing a little more.
But don’t forget that it is more important to invest in your relationship with God, than to just focus on money.
“Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.” (1 Timothy 6:17)
The bottom line is this … put your hope in God, not in money! He is our provider and wants the best for His children.
Stay connected to God. He wants you to be fruitful.
Jesus said … “I am the vine; you are the branches. If you remain in me and I in you, you will bear much fruit; apart from me you can do nothing. (John 15:5)
Where do you stand with God today? Do you know Jesus as your Savior? He made a way for you to share eternity with Him. And, He doesn’t want you to face the journey of life alone. He wants to do life with you, through the tough times and the good times.
God saw that man was separated from Him, so He sent His Son, Jesus, to pay the price for you and me on the cross, so that we can come into a relationship with Him. You can start a walk with God, not because of what you do, but because of what Jesus did. This relationship ensures that you and I do not need to face life alone, and this relationship continues into eternity.
If you do not know Jesus as your Savior, why not invite Him to be your Lord and Savior? Give Him your life, along with your burdens, along with your dreams and desires. He has a great plan for your life. And he wants to do life with you.
If you want to start or restart your walk with God, click here to pray a simple prayer we have set up for you.
Father, thank you that I do not have to face my financial affairs alone. Help me to put You first in all I do. Please give me the wisdom to make the right financial choices that will honor You. Lord, show me what expenses to cut. Help me to invest a little more. And above all, may I grow closer to You. Please bless me, so that I can be a blessing to others. I ask this in Jesus name. Amen.
You can set yourself up for a brighter financial future, by cutting back on your expenses and by investing a little more. And you can set yourself up for a blessed eternity by giving your all to God.
You can set yourself up for financial freedom by turning your income into assets.
So cut back on your expenses and invest a little more.
And remember, hold onto God.
He wants to do life with you!
God bless you.
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