Read Online Stop Wasting Your Life & Do Something by Simon Smith - Free Book Online
Authors: Simon Smith
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totals. 1 – Income total. 2 – Expenses total. Now work out the balance. Deduct your total Expenses from your total Income. This should be a positive number (for example £500). If it’s a negative number, you’re in real trouble.
Now in your assets grid, make a list of everything you have that is an asset. An asset can only be something that you own that either makes you money, or can be sold quickly for money. Your own home should not go into this grid, as you cannot sell your home as you’d be homeless.
Now total them up.
Now do exactly the same thing with your liabilities. A liability is anything that can be paid off. A mortgage can be paid off so should go in there. Rent cannot be paid off, so shouldn’t go in there. Car loans, bank loans, credit cards, payday loans. All of these should go into this grid.
Now total these up.
Now deduct your liabilities from your assets as you did earlier. This is your total net worth (we’re only speaking economically here). Your worth as a human being is unlimited, but you need to know where you’re at financially.
This is your starting point.
Now you need a strategy to turn these numbers into your favour. There are two things to look at. Cash flow, and net worth.
Cash flow is how your money flows in and out each month. This needs to be positive if you are to get ahead.
Net Worth is what you are actually worth from a financial point of view.
Get your cash flow up first, and then build your net worth. This is the game that you need to play for the rest of your life.
Building Your Cash Flow
There are two ways to increase your cash flow (making your income higher than your expenses).
One is to increase your income, and the other is to decrease your expenses. My advice is to do both at the same time.
There are many ways to increase your income. Without going into too much detail, as there are many books about starting a home-based business, I’m going to give you some suggestions. The idea of this section is just to wake your mind up to the possibilities
One – Go for a promotion in your job. If this means you need some more skills, then go and get them. If it means you need to move out of your comfort zone, then do it. If it means you need to build some new relationships, then go for it!
Two – Build an online business. This could be selling something. It could be building an online blog. It could mean an eBay business. It could be creating a website that pays you through advertising.
Three – Sell some of your unwanted stuff on eBay or Gumtree. Give yourself a goal of selling £100 worth a month for example. I’m sure you’ve got stuff you don’t need any more. Somebody out there will buy it from you. You could also set yourself a goal of buying and selling from car boot sales on eBay, with a profit of £100 per month just to get you started.
Four – Reduce your debts. If you can pay off some of your debts (or better still all of them), then will have a massive impact on your expenses, and thus your cash flow. If you’re currently paying £600 a month on loan/car/credit card repayments, doing this will make you £600 a month better off. This is just simple maths.
Five – Invent something and license it to a company. If you can create a solution to an everyday problem, someone will pay you for that idea. If you license it to them, they will pay you a royalty. This could be a monthly royalty, a quarterly royalty, or an annual one. Either way, it will help your cash flow.
Sell information. What do you know a lot about? I bet you have some knowledge or skills that other people would pay to get their hands on. Create an ebook/CD/MP3/Podcast/DVD on it, and sell it. Advertise it in industry specific magazines or websites. With the quality of free software available today, anyone can create a product from scratch.
The only limit to the ideas is your imagination. I currently
Now in your assets grid, make a list of everything you have that is an asset. An asset can only be something that you own that either makes you money, or can be sold quickly for money. Your own home should not go into this grid, as you cannot sell your home as you’d be homeless.
Now total them up.
Now do exactly the same thing with your liabilities. A liability is anything that can be paid off. A mortgage can be paid off so should go in there. Rent cannot be paid off, so shouldn’t go in there. Car loans, bank loans, credit cards, payday loans. All of these should go into this grid.
Now total these up.
Now deduct your liabilities from your assets as you did earlier. This is your total net worth (we’re only speaking economically here). Your worth as a human being is unlimited, but you need to know where you’re at financially.
This is your starting point.
Now you need a strategy to turn these numbers into your favour. There are two things to look at. Cash flow, and net worth.
Cash flow is how your money flows in and out each month. This needs to be positive if you are to get ahead.
Net Worth is what you are actually worth from a financial point of view.
Get your cash flow up first, and then build your net worth. This is the game that you need to play for the rest of your life.
Building Your Cash Flow
There are two ways to increase your cash flow (making your income higher than your expenses).
One is to increase your income, and the other is to decrease your expenses. My advice is to do both at the same time.
There are many ways to increase your income. Without going into too much detail, as there are many books about starting a home-based business, I’m going to give you some suggestions. The idea of this section is just to wake your mind up to the possibilities
One – Go for a promotion in your job. If this means you need some more skills, then go and get them. If it means you need to move out of your comfort zone, then do it. If it means you need to build some new relationships, then go for it!
Two – Build an online business. This could be selling something. It could be building an online blog. It could mean an eBay business. It could be creating a website that pays you through advertising.
Three – Sell some of your unwanted stuff on eBay or Gumtree. Give yourself a goal of selling £100 worth a month for example. I’m sure you’ve got stuff you don’t need any more. Somebody out there will buy it from you. You could also set yourself a goal of buying and selling from car boot sales on eBay, with a profit of £100 per month just to get you started.
Four – Reduce your debts. If you can pay off some of your debts (or better still all of them), then will have a massive impact on your expenses, and thus your cash flow. If you’re currently paying £600 a month on loan/car/credit card repayments, doing this will make you £600 a month better off. This is just simple maths.
Five – Invent something and license it to a company. If you can create a solution to an everyday problem, someone will pay you for that idea. If you license it to them, they will pay you a royalty. This could be a monthly royalty, a quarterly royalty, or an annual one. Either way, it will help your cash flow.
Sell information. What do you know a lot about? I bet you have some knowledge or skills that other people would pay to get their hands on. Create an ebook/CD/MP3/Podcast/DVD on it, and sell it. Advertise it in industry specific magazines or websites. With the quality of free software available today, anyone can create a product from scratch.
The only limit to the ideas is your imagination. I currently
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