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SERIES: Fundamental Rules Of Money Management VI

In this series, I have been sharing some thoughts on some fundamental rules of money management that are time-tested and known to be true.   If applied, these rules can help you take your finances to the next level.

Rule #6 Your business idea has a much better chance of succeeding when there is a strategic plan and a financial plan.

As a financial counselor, I routinely meet with small business owners who started their own businesses.   Some of them have been wildly successful.   Others have not had the success that they had expected and desired.   There are always a few exceptions, but it has become very apparent to me that individuals who take the time and effort to prepare a strategic business plan AND a “Seed Fund” for their idea have a better chance at succeeding.

A strategic plan includes developing critical milestones that must be achieved and establishing detailed action steps necessary to achieve them.   It should also include financial targets that must be achieved for the business to be considered a successful effort.

Having some money available to start the business with is essential as well.   I have seen too many good business ideas fail before they could mature simply because the business was too highly leveraged with debt.

And of course, one should always remember Warren Buffets number one rule of money management – “Don’t lose money.”

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SERIES: Fundamental Rules Of Money Management V

In this series, I have been sharing some thoughts on some fundamental rules of money management that are time-tested and known to be true.   If applied, these rules can help you take your finances to the next level.

Rule #5 If it sounds too good to be true, it is most likely a scam.

Call me cynical, but most “too good to be true” and “get rich quick” ideas are great ways to throw money away.   It would be better to just set fire to your money.   I remember a day several years ago when this “great deal” presented itself to me.   “All you need is $1,000,” I was told.   Once I would turn in my $1,000 (it was required in cash – hello? – can you smell the scam cooking?), I would secure a slot.   Once eight other people gave $1,000 under my slot, I would receive $8,000.   Little did I know that I was being introduced to a pure form of a Ponzi scheme.

It seemed like everyone was jumping in.   I know several of my co-workers did.   It was a “hurry, hurry, hurry” mentality.   “If you don’t jump in NOW,” I was told, “you will lose the opportunity.”   This was back when I was busy writing the “I Was Broke” part of I Was Broke. Now I’m Not. so I did not even have $1,000 if I wanted to participate.

You already know what happened.   The folks running the scheme took all of the money and vanished from town – never to be heard from again.

Here is what I have discovered – when you are B-R-O-K-E, you are way more susceptible to get-rich-quick schemes and scams.

Be calm.   Be patient.   Use the real power of compound interest to fund your hopes, plans and dreams.

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SERIES: Fundamental Rules Of Money Management IV

Welcome to a new series on the wildly popular JosephSangl.com! In this series, I will be sharing what I believe are Fundamental Rules Of Money Management. I look forward to reading your thoughts on this topic!

Rule #4 You must have margin.

I have lived with no money in the savings account.   When I was in that situation, I was very aware that it was not the best situation.   It was clear that $0 in savings left little room for financial emergencies to occur, but I was unaware of the full implications of zero saving until I finally had a healthy savings account.

A healthy savings account provids margin.   It allows you to think beyond today and tomorrow.   Margin allows you to consider a business decision, career path, or even moving without seizing up due to making this statement to yourself, “That will cost money.   Money that I do not have.”   Financial margin allows you to absorb unexpected financial events (like refrigerator, hot water heater, or car failure) – without incurring new debt.

Margin also allows you to take advantage of unexpected financial bargains.

To me, financial margin equals to less stress, peace, a calm wife, and freedom.

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SERIES: Fundamental Rules Of Money Management III

Welcome to a new series on the wildly popular JosephSangl.com! In this series, I will be sharing what I believe are Fundamental Rules Of Money Management. I look forward to reading your thoughts on this topic!

Rule #3 Nothing will happen until you do something.

I used to work a J.O.B.   I was energetic enough because I am a naturally hyper person, but I was working a J.O.B.

Instead of waking up in the morning and saying, “Good morning, Lord!   I can’t believe I get to do this!!!”, I would wake up and say, “Good Lord.   It’s morning.   Where’s the coffee?”   I wanted to do work that made a difference.   I think most people fall into that category.   There is nothing more miserable than working a J.O.B. that makes absolutely no difference in anyone’s life.

I have met a lot of people who feel stuck in their job.   They hate it.   To say that they “despise” their job would not be overstating it.   They want to do something else, but they feel trapped.

I have been there.   I decided to do something about it.   I began to offer free financial counseling for members of our community.   Trusting people allowed me into their homes to help them prepare a written spending plan or to develop a strategy to become debt-free.   Those people allowed this crusade to become a reality.   But it would not have happened had I not made the first move.

This rule applies to all areas of life.   Want to go out on a date with that girl?   Better do something – ask her!   Want the next promotion?   Let the boss know that you are interested – and prepare like crazy so that you are ready for it!

Want to win with your finances?   DO SOMETHING about it.

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SERIES: Fundamental Rules Of Money Management II

Welcome to a new series on the wildly popular JosephSangl.com!   In this series, I will be sharing what I believe are Fundamental Rules Of Money Management.     I look forward to reading your thoughts on this topic!

Rule #2 Sow Some Seed

It appears that this series is taking on a farm angle …   It is the most basic and fundamental fact of farming.   If you want to harvest something, you better plant something.   I can assure you that if you do not plant corn kernels in the spring, you will not be able to harvest 150 – 200 bushels/acre of corn kernals in the fall.

How does this relate to finances?   I see some key similarities:

  • Being stingy with seed leads to a poor crop If you want to have no money, don’t save any money.   Don’t invest any money.   I can promise you that you will always have no money (a poor crop).
  • Some seeds will be eaten or rot You can coat the seed with pesticide and other deterrants, but some of the seeds will still be eaten.   Still others will rot.   Others will not germinate.
  • If enough is planted, an abundant harvest will happen If enough seed is planted, it sets in motion the path toward an abundant harvest.   There is nothing like running the combine through the fields and emptying the hopper into the grain trucks – the result of all of your efforts in the spring.
  • One seed usually produces hundreds or thousands of additional seeds! The seeds that produce will yield an incredible harvest.

Are you sowing some seed so that you can reap a harvest?   Let’s make it practical.   Are you investing in your 401(k)?   Are you saving money for your dreams?   Are you directing money into investments like real estate, small businesses, stocks, bonds, and other proven ways to maximize the growth of your money?   Sow some seed.

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SERIES: Fundamental Rules Of Money Management I

Welcome to a new series on the wildly popular JosephSangl.com!   In this series, I will be sharing what I believe are Fundamental Rules Of Money Management.     I look forward to reading your thoughts on this topic!

Rule #1 Make hay while the sun shines.

I was raised on a farm in Indiana, and one thing we learned was that we needed to make hay while the sun was shining.   We knew that a time of famine was coming (winter) when there would be no fresh food to feed the livestock.   This made it imperative that we cut the grass, dry it in the sun, bale it, and store it WHILE IT WAS AVAILABLE.

How does this relate to finances?   I see some key similarities:

  • There will almost always be a time of famine The job lay-off, an unexpected pay-cut, an unanticipated healthcare issue, or increased expenses can lead to financial famine – especially if one has not saved for such a famine.
  • When you cut hay, more will grow to replace it If the grass is not cut, it will mature and die off.   It will also prevent additional growth.   If you cut the hay, it stimulates new growth.   The same is true for finances.   If you save some, it will lead to new financial growth!
  • When you have plenty of hay saved up, it leads to confidence When you have an emergency fund of money saved up, it can help you take a few risks and not jeopardize your entire financial situation.   You can absorb some costly expenses.

When you are in a period where you are making excellent money and life is good, it is time to save and store up for the future.   Make hay while the sun shines.

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