Financial Planning

What is wealth?  Some define it as having a lot of money, a big house, many big cars, etc.  Robert Kiyosaki define wealth as “The number of days that you can survive forward if you stop work today”.  With this in mind, wealth would means different things to different people.  If we have more cash inflow as compared to cash outflow, we will be considered wealthy.  So in order to be wealthy, we should make sure our cash inflow exceed our cash outflow by being realistic about things.  Giving in to our needs while controlling our wants.  We should also practice delayed gratification.  Delaying our wants until we can have the cash to pay for it.

Some people work very hard, get promoted and compensated by big salary.  As they say, ‘the bigger the salary the bigger the bucket’.  However they forget to control their cash outflow.  They start to buy big house, big cars, buy expensive clothes, live a lifestyle of the rich and famous.  Their cash outflow also goes up.  Spending tomorrow’s money today is the common theme.  Credit cards and personal loan are their best friends.  So some of them ended up being in debts and their money is depleted by their lifestyle.  Worst still if their income is derive from an exchange of their time, a limited resource.  We should take care of our health because we are exchanging our time for money.  If our health is affected, our job will be at stake and our cash inflow would be in question.  This is the reason why 5% of us have started creating multiple sources of income (MSI), mainly using our earned money to make more money.  Not working for money but making money work for us.  We use the money to invest in business, stocks and properties.  If we are not doing this, we are not doing justice to our hard earn money.

Once we are not stressed up on the need for more cash inflow, we will automatically live a happier life.