Financial Education Course #3
One fundamental concept to financial success is simple: increase income and decrease expenses. Although this concept is very simple, most people do not apply it. Throughout your life, your focus should be on increasing your personal income and decreasing your personal expenses.
Most people have misplaced goals when it comes to finances. One misplaced goal is to get the nicest house possible. Another misplaced goal may be to finally save enough money to buy a dream car. The problem is this: most people focus on what they want instead of the best way to get it. This focus – on achieving your financial goal without focusing on the method for achieving it – is doomed to failure.
Increasing income is kind of a “no-brainer.” We all know the benefits of increased income. However, have you ever really studied diligently how you could run a business or increase your knowledge towards the goal of increasing income? Knowledge is power. Acquiring assets and financial knowledge almost always increases your income. For instance, when was the last time you went to a seminar about marketing or website building? How much time do you spend learning about how to acquire and manage assets? If you constantly “build” yourself up with personal abilities and knowledge, your income will increase. However, an important warning is necessary here. If you do not first apply the principle of decreasing expenses, all of your increased income will be worth absolutely nothing. The tendency of most people is to immediately find ways to spend increased income. A nicer house, better cars, indulging in hobbies and other personal habits – these things have a natural way of immediately exhausting additional income. First make a commitment to decreasing expenses. Make them as low as possible! Then, make a commitment to only use your increased income for new assets and other investments. If you do this, a better overall financial life will naturally follow.
Math Never Lies. We have all found ourselves in the dynamic of wanting nicer things in life. Houses, cars, vacations – we want it all and we want it now. Sometimes the “right- now” desire to live life overcomes our math skills. In order to truly have an easier financial life, we need to always be focusing on increasing our income and decreasing our expenses. The math of this truth never lies.
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