I first noticed the issue with cashflow when I first worked with some small businesses. It is clear that most one-man bands and micro businesses are good at what they do – but one thing holds them back.
This is the one thing that causes much pain and angst, the one thing that at first is ignored when looking at the cause of problems within a business.
See, money is a magnifying force in all of our lives. If we have enough coming towards us then life is sweet, we can do all the things we need to do, that we want to do, bills are paid and the future seems rosy.
Without the right level of cashflow (more income than expenditure) there can be no happiness, no time to relax and focus on the future no time freedom to focus on new products or new markets – it’s a struggle just to move forward. Cashflow is the one thing that makes everything different.
For you, your personal cashflow is just as important. Without surplus income you will only last for so long before a really severe storm comes, before the proverbial hits the fan.
Going into your future. overspending means that eventually you run out of money, or increase your debts to the point where the payments become unsustainable.
You have to be more focused than ever on your spending and cashflow, there are more and more things nagging and poking you to spend your hard earned on – and it’s easy to slip from one good idea to the next and to forget about the real picture.
The most recent example of this is Peloton. It is an exercise bike that costs two grand and £39 per month. Sure, I note it’s got some bells and whistles – but really? For an exercise bike?
Wherever you look there is something to attack your cashflow, something to extract your future income from you, nicely robbing you of an independent future. It’s no different with mortgages and loans, the lender is not so much interested in the actual security of the loan and more in your future ability to make payments – all from your future income, it guarantees them future cashflow – cashflow that you will have traded your life for.
Importantly, most of the things you borrow money for go down in value and not up. Go think about that for a couple of minutes.
Put the price of a coffee on your credit card and don’t settle that in full at the end of month, the cost of that single coffee goes through the roof.
Being mindful about your money, controlling how you use your cashflow (what you spend) is the key to having a future that is bright and solvent or…
By excepting that your grey matter, your mind is not rational and does make decisions on the fly to buy stuff that you may not really need or want, but just appear and seem like a good idea the time –means you are being stolen from – robbed of a financially independent future.
Little things, like only going shopping with a list will mean you’ll miss most impulse buys.
Keeping a ‘to buy’ list for all those items you think you need is an easy way of slowing down your spending – instead of buying today put it on a list and see if you still want it in a weeks time. If you do, great.
If you don’t then your cashflow has just improved by the amount you have not spent.
Fucking amazing eh.
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