How (financial services coach) To Create More Income
No commentsBy Ann Marosy
There are two sides to wealth creation, earning money and spending it. In essence, if we spend less than we earn, we will ultimately, progressively become rich.
However, I also like to reinforce the other side of the wealth equation, income, because most budgets and money management programs focus too heavily on reducing the expenditure, which is often restrictive and sometimes depressing. Very few of us focus on increasing our income in hard times, which is exactly what we should do. Creating more income is also a more positive approach than merely cutting back our spending. Although, in the beginning it is important to identify our extravagances and eliminate expenditures that are wasteful, it is equally important to think of new ways to create more money. This is often easier to do than we realize.
Be novel and think laterally when devising new ways to increase your income. Everyone who I have assisted on the Money Program has eventually increased their income, despite protests to the contrary at first. Some, who were seriously in financial hardship at the time, got part-time work to help in the short-term. Others increased their hours or thought of new ways to increase their clientele. A few were able to turn a favorite hobby or interest into income-producing ventures. Some were more adventurous and left poor-paying employment for better opportunities. The more I asked them to think about it, the more receptive they became. However, the most important aspect is only do what feels right to you and that which you enjoy.
When you start to manage money, your sense of accomplishment and self worth increases. This sense of accomplishment has a snowball effect. The more accomplished you become at managing money, the more open you will become at earning and receiving money. This may take time, so in the beginning you may have to use short-term methods to boost your income, such as part-time work. Do not rush out and change jobs just to increase your income.
When my clients changed jobs for a higher paid one, it was usually a gradual, automatic process that happened naturally when their self-esteem grew and they were ready for it. So, if your first thought is to change jobs - wait. Is it the right time? Are there other short-term ways to increase your income first? Do you have a good employer who is doing the right thing by you? If you increase your output in this job, will it lead to a payrise? Think of all the alternatives first.
Many people naturally try to increase their income using short, quick-fixes. Gambling, lotteries and highly-speculative investing lure the impatient into believing that one big win will solve all of their financial problems. The odds are definitely against them, but even the “lucky” few rarely keep their windfalls for very long. Bankruptcies amongst former lottery winners are all too common. Quick-fixes are just that - a quick fix, not a long-term solution. If you haven’t learned to manage your money before the windfall, what makes you think that you will after the windfall? The usual scenario is to keep repeating the same behaviors that prevented you from successfully managing money in the first place. If your tendency was to overspend before the windfall, then you will most likely keep overspending - but with more to lose.
People who gamble have usually given up on their own ability to make money. It is usually those people who feel that they are stuck in a dead-end job or have lost their faith in their own abilities to produce a good income, who flutter away their hard earned money on lotteries and poker machines. Pensioners, in particular, once their working years are over, are enticed by the hope of that extra windfall because it represents the only extra money they believe they can create. When we lose faith in own ability to earn more income, or produce the income we desire, the more we can fall prey to the addictions of gambling.
Winning large windfalls is often a double edged sword. There is a tendency to either misuse the large sums of money or lose it. Not only have we not learned to manage this sudden wealth, but we have often not earned it. Within all of us, there is sub-conscious voice that ensures that our internal debits and credits are balanced. If we produce goods and services that are valuable to others, this internal part of us knows that we deserve payment and will more readily accept greater rewards into our life.
I often hear people saying, “I don’t feel like I deserve to be wealthy”. Maybe, they don’t. Maybe, they haven’t tapped into their wide reservoirs of talents and skills yet and not used them for adding value to their community or employers. Observe very wealthy celebrity or sport stars. They have far reaching audiences who they inspire or entertain. The celebrities may earn millions a year, but they also reach millions of people. The more people these stars can assist in some way, the more money they receive in return. We need to feel that we have earned our income, before we can appropriately accept it into our lives. There has to be some sort of exchange. People who suddenly win large windfalls often lack this sense of exchange, and sooner or later, lose or give away their money in compensation.
The most consistent path to increasing your income is by the exponential method: a slow, gradual start that increases dramatically over time. This gives us time to learn how to manage the increase. The more adept we become at managing money, the more we will be open to receive.
Each of us has a subconscious ceiling on the amount of money we can receive at any given time. This ceiling has been created by many different factors - parental and social conditioning, past experiences, our own sense of self-worth and the value we have placed on the talents and skills we use in our particular line of work. If we receive more than what we think we are worth, we tend to lose it or give it away. Hence, the reason why so many lottery winners become bankrupt so quickly. In order to increase our income, we must raise the ceiling on our income earning potential.
Past influential people can also affect our sense of self-worth. For example, an overly critical parent or employer can impose their own limiting beliefs and values onto us by constantly demeaning our efforts. In Napoleon Hill’s classic, Think and Grow Rich, he lists the thirty-one major causes of failure. Included in this list, are “unfavorable environmental influences during childhood”, “negative personalities”, “wrong selection of a mate in marriage” and “wrong selection of associates in business”. In all of these factors, he cautions against negative personalities and surrounding yourself with people who destroy your goals and inspirations. As he says, “We emulate those with whom we associate with closely. Pick an employer who is worth emulating”.
Regardless of how detrimental our past conditioning and exposure to negative and limiting beliefs, we can change our own internal programming. To raise our income ceiling, there are several things we can do:
Add value to your work. If we are sloppy and lazy in our work, we decrease our own internal self-image. Wasting time and getting paid for too many, unnecessary “sickies” may be a short-term method of getting us through a boring job, but it also lowers our own internal self-worth. The more we add value to what we do and know that it is serving our employers, clients and the community, the more we raise our own level of self-esteem.
Fully utilize our own special skills and abilities. We all have special talents and traits that are valuable to others. If you are not using these talents in your current job - you are in the wrong line of work. Do those activities that utilize your special talents everyday, even as a hobby. Then you can gradually build them into a job, business or career. Invest in some extra training, if necessary, to improve your skills to qualify for greater income-producing opportunities.
Add purpose to our work. One of my favorite sayings is, “To be successful, add purpose to what you do. The higher the purpose, the greater the success you will achieve”. Even a menial job will gain more sparkle, when you find a higher purpose to the work. Whether we realize it or not, people are basically driven by purpose. Without purpose we shrivel up and contract our lives, our feelings and our aspirations. With purpose, everything becomes meaningful and more exciting.
Spend less time with people who intimidate you or constantly demean your abilities. If you cannot avoid them, ensure that you don’t accept their beliefs and criticisms as the truth. Remind yourself that negative people are often only projecting their own fears and thoughts about themselves onto others. It is not your belief - it is theirs.
Change your own internal income ceiling. The best and surest way to do this is to reprogram it. That is why affirmations and visualization exercises are so effective. We have a subconscious picture or belief about what we can or cannot have, and sometimes we just get used to having only what we have had in the past. We need to stretch our beliefs. Write out new goals and tape them to your bathroom mirror or refrigerator where you can see them everyday. Read inspirational books on goal setting and achievement. Practice creative visualization.
I believe that in all of us, regardless of age or physical health, we have special talents and skills that are valuable to others. At age 81, film star Kirk Douglas suffered a debilitating stroke that rendered him powerless and speechless. After many months of intensive therapy, Mr Douglas regained his speech and later wrote a book called, My Stroke of Luck, describing the positive opportunities he gained from his illness. No physical situation is detrimental to us, if we use it as an opportunity for growth, learning and expansion.
Ann Marosy is an accountant, consultant, and former university lecturer. She was formally a Financial Controller of a Fortune 500 Company, and Finalist of SA Executive Woman of the Year.
Ann is the author of ‘The Money Program’ book series, which includes managing the stages of wealth creation, formulas for budgeting, debt-free program and investment strategies. Visit: The Home of The Money Program
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How To Consolidate Your Debt
By Paul Hata
Some homeowners opt to re-finance to consolidate their existing debts. With this type of option, the homeowner can consolidate higher interest debts such as credit card debts under a lower interest home loan.
The interest rates associated with home loans are traditionally lower than the rates associated with credit cards by a considerable amount. Deciding whether or not to re-finance for the purpose of debt consolidation can be a rather tricky issue.
There are a number of complex factors which enter into the equation including the amount of existing debt, the difference in interest rates as well as the difference in loan terms and the current financial situation of the homeowner.
This article will attempt to make this issue less complex by providing a function definition for debt consolidation and providing answer to two key questions homeowners should ask themselves before re-financing.
These questions include whether the homeowner will pay more in the long run by consolidating their debt and will the homeowners financial situation improve if they re-finance.
What is Debt Consolidation?
The term debt consolidation can be somewhat confusing because the term itself is somewhat deceptive. When a homeowner re-finances his home for the purpose of debt consolidation, he is not actually consolidating the debt in the true sense of the word.
By definition to consolidate means to unite or to combine into one system. However, this is not what actually happens when debts are consolidated. The existing debts are actually repaid by the debt consolidation loan. Although the total amount of debt remains constant the individual debts are repaid by the new loan.
Prior to the debt consolidation the homeowner may have been repaying a monthly debt to one or more credit card companies, an auto lender, a student loan lender or any number of other lenders but now the homeowner is repaying one debt to the mortgage lender who provided the debt consolidation loan.
This new loan will be subject to the applicable loan terms including interest rates and repayment period. Any terms associated with the individual loans are no longer valid as each of these loans has been repaid in full.
Are You Paying More in the Long Run?
When considering debt consolidation it is important to determine whether lower monthly payments or an overall increase in savings is being sought. This is an important consideration because while debt consolidation can lead to lower monthly payments when a lower interest mortgage is obtained to repay higher interest debts there is not always an overall cost savings.
This is because interest rate alone does not determine the amount which will be paid in interest. The amount of debt and the loan term, or length of the loan, figure prominently into the equation as well.
As an example consider a debt with a relatively short loan term of five years and an interest only slightly higher than the rate associated with the debt consolidation loan. In this case, if the term of the debt consolidation loan, is 30 years the repayment of the original loan would be stretched out over the course of 30 years at an interest rate which is only slightly lower than the original rate.
In this case it is clear the homeowner might end up paying more in the long run. However, the monthly payments will probably be drastically reduced. This type of decision forces the homeowner to decide whether an overall savings or lower monthly payments is more important.
Does Re-Financing Improve Your Financial Situation?
Homeowners who are considering re-financing for the purpose of debt consolidation should carefully consider whether or not their financial situation will be improved by re-financing.
This is important because some homeowners may opt to re-finance because it increases their monthly cash flow even if it does not result in an overall cost savings.
There are many mortgage calculators available on the Internet which can be used for purposes such as determining whether or not monthly cash flow will increase. Using these calculators and consulting with industry experts will help the homeowner to make a well informed decision.
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Wednesday, August 27th, 2008 at 10:10 am and is filed under finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
