This is Part 1 of a 2 part series called “It’s Your Business!”
Part 1 – It’s Your Business
If your personal finances were a business on a stock exchange, would people invest in you? Consider what people look for when they want to invest in companies. They want to see revenue, profit, low debt (in many instances), intelligent reinvestment, and good management. Do you have those things?
The truth is, the average U.S. Citizen doesn’t have those things. Statistically speaking, if you own a credit card, then you have upwards of $15,000.00 of debt on it. If you don’t, then you’re in the minority. Let’s have a question and explanation session, you should be able to answer these questions:
Question: Do you have revenue?
Explanation: Sad to say, there are a lot of people out of work right now, and they are still running up debt.
Question: Do you make a profit?
Explanation: Does your revenue minus your expenses leave any money left over at the end of the month?
Question: Do you reinvest your profit wisely?
Explanation: If you have profit left over, do you invest it wisely? Do you pay off high interest debt or put it into an account earning .50% APY? Do you understand why it might be better to put your profit into a high percentage debt rather than a low percentage savings account?
If you said no to any of those questions, then there are probably people out there that wouldn’t touch your business with a 20 foot pole. If you said no to all of those questions, then you could be on the same financial course as Enron, Yikes! The good news is you can change this, and you don’t have to go the way of Enron.
Get A New Business Model
If you wanted to attract investors to your business (remember, we’re metaphorically talking about your finances still), then you need to get a more attractive business model under you. You need to get your finances together and invest wisely. You need to start from the ground and build your way back up. You need to get ready to reinvent yourself!
What should be looked at and reassessed?
All of these things must be looked at and scrutinized. A great way to start is by cutting back your spending so you can increase your available cash. Then, begin tracking your costs to start getting an idea of where your money is going. Once you understand that, then we highly suggest you follow our 10 steps to improving your finances.
What Can I Expect With “Reinventing Myself”?
We are going to be honest and admit that it will probably be one of the hardest things you’ve had to do. You will no longer be able to buy what you want, when you want it. Instead, you will need to save for things. Additionally, you are going to be forced to form new habits, such as following a budget. Many of these things will require a lot of time, but if you stick with it, things will absolutely get easier.
In this part we’ve discussed what will need to be done, and what you can expect when you begin this journey. In part 2 on Wednesday, we will discuss the actual steps and method more in-depth. We’ve linked many resources throughout this article and highly recommend that you read them and understand them well.
