We know that being financial independent is not merely about being rich, but having freedom to afford the lifestyle a person desires without having to work.
If you are like most of people, who put the goal of being financial independence near the top of your long-term-goals list, you'll have a long way to go. There is a lot of financial advice that you can hear about in your daily life. You can seek advice through the personal financial books, or from your financial planner. It seems that every person can offer the most professional advice, but they will confuse people who only want to accept all of them, because everyone has their own opinion on where to put the money, how to spend it, and how to make their money grow.
However, there are some simple truths that can apply to the advice that you can find. Let's see what they are.
1. Spend less than you earn, i.e. use credit card carefully.
This is basic and pretty obvious but a lot of people don't pay enough attention to it. It is the only way that helps you to get out of debt or make advancement on your savings. You can set up a rate that you will put into the saving account instead of spending all the money you get.
It is more likely that people using credit card can buy things they want in advance, but it is also an easiest way for them to load with debts. Learn to use credit card wisely.
2. Use cash rather than cards.
People will think more when they are using physical cash than a plastic card. If you have set a daily budget that you have $20 to spend on entertainment this week, you are more likely to think twice about spending all of them on movie rentals tonight when you have other plans for the weekend.
But if you use a credit card, you are less aware about how much money you are spending. And it seems an $8 and a $20 product doesn't seem like a look unless you see the total amount in the bill. Those small single purchases can add up to a lot.
3. Nobody will care as much about your money as you do, so do take more control of your money.
There are many people in the market who seem more professional than you because they have training, experience or fancy job titles that make you think they are best for you when it comes to your money. But actually nobody will care that much about your money as you do. So if you want to achieve your goal of being financial independent, even though you can seek help from the fund managers, investors or bankers, you should also be active to take control of your money. Knowing where your money is and being able to make informed decisions.
4. Budget.
Make your budget realistic rather than difficult. A budget allows you to see through the who situation and help you to know where your money is going, and where you can reduce your spending to improve your financial situations.
The budget you make should accurately reflect your spending habits and expenses, otherwise it won't be a useful tool at all, from which you cannot get closer to realize your financial goals.
5. Pay yourself first.
It doesn't mean that you should go shopping and buy something, no matter a new computer, phone, or anything like that, not mention things that will overspend the budget. It means put an amount of money into savings. Many personal financial books will contain this clue. They recommend that you should pay yourself first such as putting some money into the saving account or other investing accounts, instead of credit card bill or other bills, except the due day.
The money you put into saving can be a very small amount but that's ok. At least you have started. But I think at the beginning, you can only put a fixed proportion of your income into the saving account. Then when you can, increase the amount you are saving to 10%, 15%, or more of your income.
6. Separate needs from wants.
Actually there are very few things we really need. A person who earns $300,000 a year doesn't necessarily live better life than a person who earns $50,000 a year. That's because the person who earns less has put much more attention to things he needs. He may do the purchases that really work for him, and try his best to improve his quality of life without spending too much money.
So every time when you want to buy something, you can ask yourself some questions like this.
Is it a need or a want?
Can I delay this purchase to see if it's really what I want?
Can I get this cheaper or somewhere else rather than buying a whole new one?
So, if you want to accomplish your financial goals, the first step is that you should get out of debt, which means you may have to reexamine your way of spending and see what you can do to speed up our financial goals.
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Article Source: http://EzineArticles.com/?expert=Sharon_Clara
Tuesday, November 2, 2010
The 3 Most Common Mistakes Every Entrepreneur Makes
Maybe it is because entrepreneurs tend to be optimistic. Maybe it is because entrepreneurs are willing to take risks. Or maybe it is because many entrepreneurs are just plain dumb, but there are some mistakes that almost every entrepreneur will make at one point in their career. These are the three things that you should never say when pitching your company to a potential investor or banker:
No Competition - At one point or another every entrepreneur will say it. "I have no competition." This is typically during the pre-revenue stages of business because once you begin to offer your product or service you will quickly realize that every business has competition. You might be the only one in the world that manufactures your product, but that does not mean you have no competition. Whether you have direct competitors or not you are always competing for dollars with someone or something else. If you have no competition then everyone in the world should buy your product, and if they don't then what is it that is keeping them from purchasing your product? That is your competition. It could be a child's college savings account, a date night with the spouse, or the mortgage payment. These are all competition because they consume dollars that are not available for your product or service.
1% of the Market - The second biggest mistake that almost every entrepreneur will make is believing that capturing 1% of their market is a conservative estimate. Just because 1% sounds like a small number does not mean any joe blow can steal 1% of a market from the competition. Entrepreneurs must have this urge to pretend that they are conservative, when in reality almost every entrepreneur has some bit of optimist in them. Rather than just assuming you can capture 1% market share out of a $100 billion market, you need to build bottom up, data driven projections. Your market potential is defined by your geographic location, your capacity to fulfill sales, and your ability to secure financing to name a few. Take these things into consideration when making claims about your market potential.
Return on Investment - The third biggest mistake that all entrepreneurs make when talking to potential investors is claiming that the investor will make some specific return on their money. For instance, entrepreneurs will come in and say that you can double your money in 2 years with their business model and their projections. Any investor that has been around for any length of time will immediately know that you are ignorant in this subject. As an entrepreneur you don't know what might happen tomorrow let alone 2 years from now. You don't need to convince an investor that they will make any level of return. They understand the game and then know that 9 our of 10 of their investments will fail or only break even, but that 1 single business that hits it big makes all the difference. Spend your time on showing these investors how you are going to hit it big, not how you are a safe investment, because you aren't safe.
These are the 3 mistakes that you must avoid like the plague as an investor seeking angel investment funding or a bank loan.
I am the Founder & CEO of http://www.theexecutiveplan.com, which offers entrepreneurs extensive guides, templates and articles to help create more powerful, effective, and memorable business plan executive summaries.
Article Source: http://EzineArticles.com/?expert=Adam_Hoeksema
No Competition - At one point or another every entrepreneur will say it. "I have no competition." This is typically during the pre-revenue stages of business because once you begin to offer your product or service you will quickly realize that every business has competition. You might be the only one in the world that manufactures your product, but that does not mean you have no competition. Whether you have direct competitors or not you are always competing for dollars with someone or something else. If you have no competition then everyone in the world should buy your product, and if they don't then what is it that is keeping them from purchasing your product? That is your competition. It could be a child's college savings account, a date night with the spouse, or the mortgage payment. These are all competition because they consume dollars that are not available for your product or service.
1% of the Market - The second biggest mistake that almost every entrepreneur will make is believing that capturing 1% of their market is a conservative estimate. Just because 1% sounds like a small number does not mean any joe blow can steal 1% of a market from the competition. Entrepreneurs must have this urge to pretend that they are conservative, when in reality almost every entrepreneur has some bit of optimist in them. Rather than just assuming you can capture 1% market share out of a $100 billion market, you need to build bottom up, data driven projections. Your market potential is defined by your geographic location, your capacity to fulfill sales, and your ability to secure financing to name a few. Take these things into consideration when making claims about your market potential.
Return on Investment - The third biggest mistake that all entrepreneurs make when talking to potential investors is claiming that the investor will make some specific return on their money. For instance, entrepreneurs will come in and say that you can double your money in 2 years with their business model and their projections. Any investor that has been around for any length of time will immediately know that you are ignorant in this subject. As an entrepreneur you don't know what might happen tomorrow let alone 2 years from now. You don't need to convince an investor that they will make any level of return. They understand the game and then know that 9 our of 10 of their investments will fail or only break even, but that 1 single business that hits it big makes all the difference. Spend your time on showing these investors how you are going to hit it big, not how you are a safe investment, because you aren't safe.
These are the 3 mistakes that you must avoid like the plague as an investor seeking angel investment funding or a bank loan.
I am the Founder & CEO of http://www.theexecutiveplan.com, which offers entrepreneurs extensive guides, templates and articles to help create more powerful, effective, and memorable business plan executive summaries.
Article Source: http://EzineArticles.com/?expert=Adam_Hoeksema
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