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The 5 Pillars of Financial Health

The 5 Pillars of Financial Health

Getting on your feet financially isn’t rocket science. It’s simple, but it requires a proactive and persevering mindset. Here are five principles that apply to every person on the planet when it comes to their financial health. I call it the BISEED and you’ll see why.

1. Budget

The first step to taking charge of your finances is understanding where your money is coming from and where it’s going. Once you’ve painted this financial landscape of your situation, you’ll be ready to strategically move forward, get out of debt, and go further. The second step of budgeting, has to do with deciding what’s a priority, how you can spend less on expenses, and then plan and project your short and mid-term financial situation. There’s nothing new here. But then again, most people get budgeting right and then just stop. That’s a financially fatal mistake!

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2. Invest

Your budget may not look great. Money-sucking-black-holes (personal loans!), high mortgages and lots of unexpected expenses makes you wonder, “How in the world am I ever going to get out of this!?” Glad you asked: make your money work for you. This is also how you break free from the mentality that money buys you things. Money’s power isn’t in how much it can buy—and really, it can never buy the most important things of life; love, joy and health—but money’s power rests in it’s ability to be multiplied. That’s what investing is: money multiplying.

How do you invest then? You first invest by giving because that breaks the powerful hold of money on you. And then, wherever you are, whatever the economic situation and whatever your budget—invest in any of the millions of ways you can.

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Now, most people just jump in the water without knowing how to swim. Why traumatize yourself? Before you invest, spend time—days, weeks, even months—learning about investing and exploring opportunities that come your way.

3. Save

But never for the long term! Saving cash in an account will always generate a loss—we’re talking years here. But saving is an excellent strategy, not to build wealth, but to reach specific, short and mid-term goals. Saving is also good to smooth out the rough edges of your monthly and yearly budgeting cycle, as life happens and that means many unexpected expenses arise.

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4. Entrepreneurial Endeavors (EEs)

A huge lie many people swallow is the belief that they’re not cut out to start or run a business. They come up with all sorts of excuses to convince themselves this, but the truth is, it’s all about what you are willing to do and learn. Being an entrepreneur is different from being an investor, because you are doing the work that you love, preferably, to earn money. Many times people jump into EEs because they have no other choice, but why wait till the pressure builds like that? (Speaking of which, I highly recommend the great movie Joy!) And why deny yourself the personal rewards of running a business? There are a virtually infinite number of ways you can start engaging in EEs. Whether you start something on the side or even grow further to the point where you quit your day job, dream big, and enjoy the journey!

5. Debt

Debt is last because if you focus on debt, it’s bound to bring you down, down, down. So before you drown, face your dragons head on. Debt is just a number, it’s not who you are. Speaking of dragons, why are you in debt? Because you spend more than you earn. So, the answer is easy, right? Spend less! Not really. Go out there and invest and make business. You’re most powerful weapon is your mind, so exercise and nurture it to grow financially. That said, the real way to get out of debt is to both increase your income (investing and EE’s or even getting a better job) AND spending less.

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BISEED. Buy Seed. That’s what money is. It’s a seed, and like the seeds you sow, when handled correctly, money will multiply.

Here’s to your bright financial future! Cheers.

Featured photo credit: Dogancan Ozturan via unsplash.com

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Last Updated on January 21, 2020

How to Develop a Millionaire Mindset in 6 Simple Steps

How to Develop a Millionaire Mindset in 6 Simple Steps

We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

How do you go about developing that millionaire mindset? By following these simple steps:

1. Focus On What You Want – And Take It!

So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

Millionaires play to win, not to avoid defeat.

This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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2. Become Goal-Orientated

It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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If you are to become a millionaire, you need to start accumulating money.

Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

3. Don’t Spend Your Money – Invest It

The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

Stop working for your money and make your money work for you.

Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

There’s not just the stock market — there’s also property, and your own education.

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4. Never Stop Learning

The best thing you can invest in is yourself.

Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

Learn everything you can about how economics works, how the stocks markets work, how they trend.

Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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5. Think Big

While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

Aim for the stars, if you fail you’ll still be over the moon.

6. Enjoy the Attention

To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

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Featured photo credit: Austin Distel via unsplash.com

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