Setting financial goals
Everyone who is a financial success is a good financial planner. So what does it take to be a good financial planner? You have to know your current situation by creating a list of assets and liabilities. Then create a financial vision for yourself about how much you want to earn in term of net wealth. Then you need to compile a list of “how to” achieve your financial target.
Creating a balance sheet
Your list of assets consists of everything that you own – this includes your house, apartment, mutual funds, stocks,
Your liabilities are what you owe including your mortgage, car loan, student loans, other personal loans, overdraft, credit card debt etc If you find that your debt is greater than your assets you need to work quickly to bring things under control possibly by consolidating debt, getting credit counselling, speaking to an accountant, discipline your self in terms of controlling expenses.
If your debt is considerably high chances are your credit score might be suffering – so you need to get it under control by creating a cash budget and scheduling all payments to be made on time and paying the correct amount – i.e. capital plus interest. But if you find that you wont be able to make the payments on time you need to consolidate debt and reschedule debt into something that you can manage comfortably with your level of income. To do this you may need to get the services of a accountant or credit counsellor.
If your present interest rate is too high in terms of credit card debt – then it may be time for you to take a secondary mortgage on your house and pay off your debt – but don’t make this an excuse to take on even more debt but making yourself debt free and transforming your lifestyle into something viable is the key objective.
One of the easiest ways to getting out of debt quickly is to sell your real estate and possibly switching to smaller house or a rented house or apartment may be the best way to go. The idea here is to make you completely debt free and start with a clear slate.
You may not need to take such drastic action if you have assets that can realise a high value such as family heirlooms, antiques, collectibles, gold coins or other liquid assets such as a life insurance fund, savings finds. You can liquidate and use these funds to pay off your debt.
Creating an income statement
Next you need to know how much your earning per month and also per year and decide how you can increase the value of your receipts. Getting your money upfront rather than over a period of time is great and better since you can use this money to pay off your debt. On the flip side getting to postpone your payments is also good since it gives you some breathing space to budget your expense. But remember that in postponing your payments your credit score should not be affected.
Creating a budget
The income statements for future period – is called a budget you need to prepare a budget to ensure that your income is greater than expenses and if not so you need to plan ahead to either cut expenses or increase your income or as a last resort plan for a loan from a bank.
What sort of financial goal should you set for yourself? Should it be an absolute figure such as USD50Mn or something more reasonable such as USD1.25Mn in the next 5 years. It all depends on your own psyche but I personally would set a very high goal since this will stretch your imagination out of your comfort zone and this is what we need to get out out of the comfort zone. Create something new and untested a completely new method of earning money quickly.
Review your cash flow
If you find after preparing your budget that you are not achieving financial goals set for yourself – then you need to change your income generation strategy. Such as getting more done through better time management, creating new products and services, upgrading your skill level, becoming a freelancer, starting out as a consultant, creating multiple income streams, such as audio books, ebooks, email lists, using social media, internet marketing, changing your investment strategy to something more aggressive to generate more profit.
Also take a look at our get rich slowly strategies.
And also use our get rich quick strategies to achieve those very big financial goals.
Start Now! you need to start planning for the future wealthy you by starting the process outlined above and take control of your future.