Many of the skills required to build and manage an investment portfolio are extensions of skills that are learned through sound personal money management.  For example, balancing a check book requires an analysis of the transactions and a comparison of a bank produced statement.  Evaluating corporate financial statements involves an analysis of the transactions and comparisons to other statements, industry standards or to different types of statements.  Yes, evaluating corporate financial statements is much more involved, but both require similar skills.  Learn to see the big picture.  If you can handle the small stuff, your financial growth will evolve naturally.

How? Start documenting financial transactions on paper, and then progress to an electronic money program.  Start with simple tracking, then balancing, cross checking and analyzing.  If you compare the process to learning math in school, you learn multiplication and division long hand before graduating to a calculator.  And, you learn the calculator before moving on to a spreadsheet.  It’s the same process.  Start with your personal financial statements, then move towards corporate financial statements for investment purposes, then for your own business or private company investing as your skill level and comfort with the process increases.

Developing a budget does not mean adding up the total income you have to work with each month, then allocating funds within that level.  The definition is: “planned expenditures and a program for financing them.”  Figure out what you want to spend each month in order to live the life you desire while maintaining your true priorities, then look for ways to fund this budget.

Why? You might not know how you’ll earn the income that you’d like for your ideal budget when you first make it, but you’ll also never find out if you don’t start asking.  Your option is to continue to scrimp and deny yourself the lifestyle you’d like to live and end up looking back on your life with regret.  You might also find that when you make your ideal budget that it isn’t really as far off as you had imagined before you put it on paper in black and white.

To be able to balance today’s financial and life priorities and needs with solid plans for the future will sometimes require some creativity and combination planning.  For example, can you put money aside as savings in other ways besides a savings account?

How? Perhaps combining investments with insurance, or mortgages, or business development, or leveraging existing assets is a possibility.  If you’re not sure how to do that, then find someone who can help you explore those ideas.  And remember, if you go to one mortgage broker or insurance agent and they say “it can’t be done” does that have to mean that it really “can’t be done?” or can you keep asking?  Obviously it’s your choice – different financial advisors have different resources and different backgrounds that give them different options to work with.  This is why we help you see possibilities and find creative solutions.

If a situation seems impossible, ask yourself if anyone has ever done anything similar before?  If so, find someone or someplace to help you find out how they did it.  Often people will say they are too old, too young, too broke, too tired, or too busy to do something they really want or need to do.  Look harder, if you think you can you will, if you think you can’t, you won’t.  Maybe there are other ways of accomplishing the task at hand besides the ones you have already tried or heard of.  If it’s that important, keep asking until you find the answers you need.

Why? Quite simply, even if a task or situation has never been done before to the best of your knowledge, does that mean you abandon the idea?  That’s your choice, but history has proven over and over again that human ingenuity and perseverance are key components to creating anything new.  If you want something different, find successful people to associate with.  They don’t necessarily have to have done exactly what you’ve done before, but they will have had experiences of setting goals, and reaching them, which is invaluable support if you are intending to make changes to your financial situation.  Creating new associations is like making new friends: you don’t have to lose the old friends, you just have to be willing to go places, and do things where you are likely to at least hear the conversations of people who are already experiencing the sort of lifestyle you desire.

The right, wealthy, abundant attitude required to make financial change, or to move forward towards your financial goals, means taking stock of all that you have today.  An inventory of non-financial assets and resources is a critical tool to growth as well as to enjoying the wealth you currently have.

What are non-financial assets and resources?  These are things such as your experiences, your education, your knowledge, your friends, others you know, your current position, the place you live and the place you work.  Perhaps you have a collection of books like I do.  These are not worth much if I was to sell them, but the value in the content of the books is definitely a non-financial asset for me.

Never say “can’t” especially in the context of, “can’t afford it.”  Instead say, “How can I…?”  It’s never about the money.  It’s about what money can or cannot do for you.  Understand why money is an issue in your life either positively or negatively and what is really important beyond the dollars and cents.

Why? It’s amazing to me how many times and ways we stop ourselves before we even start.  I spoke with someone the other day who was looking for work in her field.  She started off saying she couldn’t live where she was living because the jobs did not give her enough income.  We talked and replaced her “couldn’t afford it reality” with “how could she earn the dollars she needed working in her field so she could live where she wanted.”

Look for ways to do something, rather than ways not to do something.  For example, rather than looking for ways to decrease spending, first look for ways to earn the money.  This is more inspiring and will often result in the reduction of spending.  Thinking positively, and having a “bigger” goal, produces a bigger purpose which will likely end up in a shift in spending anyway.
How? Rather than looking at the situation and saying “can’t because,” or “if only,” or “… but…” keep asking, “Who? What? When? Where? How?”  Keep asking and asking.  As soon as you say “can’t,” you stop looking for answers.

If you have a lump sum of money that you will be using to supplement your lifestyle, be aware going into that arrangement and plan for the withdrawals.  For example, have a set amount of money transferred to a spending account each month, rather than simply accessing the savings money whenever necessary.  When you withdraw funds from a savings account for whatever purpose, even money you have diligently saved for something specific, you can have the uncomfortable feeling of watching your money diminish, which can too easily create feelings of scarcity, fear, and/or lack.  The solution is to plan for the withdrawal and to focus on the plan or the reward, not the savings value.

How? If you are funding your lifestyle from a lump sum of money such as in retirement or a temporary leave of absence from work, you still need to know your monthly expense requirements and manage monthly cash flow like you do with regular income.  This means a percentage of the money that you have transferred from your pool of savings is allocated to saving and giving.  This way you maintain some structure and the reduction of capital is part of an overall plan.

We would like to take this opportunity to wish you a very Merry Christmas and Happy New Year!! We would also like to send you off inspired and excited about the weeks and year ahead.

While you are enjoying yourself with friends and family over the next couple weeks, there a few powerful things you can do to build your financial foundation:
•   Acknowledge all the good you currently have in your life from the simplest of pleasures such as your ability to communicate freely to the more complex like your expertise, professional relationships and opportunities.
•   Be aware of what inspires you: beautiful things, entertaining, being entertained, giving gifts, receiving gifts, planning activities, quiet and peaceful reflection, none of these things, or all of these things.
•   Consider where you are today and where you would like to be this time next month, next year, and 10 years from now.
•   Document your feelings, your frustrations, inspirations, ideas and the finances associated with these things. If you are inspired to give many gifts to people you know as well as to volunteer your time for others in need, then: how much money will it take for you to be able to freely buy the gifts you want for those you love? And, how much time will it take to do the things you want to do next year? And, if that means time off work, what is the cost to do that.
•   Everything you do this season, do it thoughtfully and begin to connect your feelings, activities, current reality and your dreams to the dollars and cents required to maintain and create your life the way you want to live it. When you know how much money it will take to live the way you want to live, then you have the basis of creating and following a plan.

Financial statements. Does the thought of them create a blank stare or create intrigue to find out more about what they’re saying? Financial statements, like written statements, articles, stories and books tell a story. They have a plot and a theme and can lead the reader on a journey to uncover hidden treasures, drama, mystery, danger and happy endings. Unfortunately, reading and interpreting financial statements requires an element of financial literacy that most people have not learned. Early on, we have learned to read words beginning with books like Dick and Jane and Spot. And, from there, we have learned to read romance, drama, technical papers, non-fiction, news and many other written words that helps us through our day. With our literacy, we can also create the written word to communicate love, research, action plans, goals and anything else to help us communicate effectively. Reading and writing with numbers is what financial statements are. They are tools to help us learn, communicate and plan our lives in the same way as the written word does.

Where do you begin to understand financial statements? You start by understanding the importance they play in day-to-day life. They are not something to be avoided or to be delegated to someone else. You don’t start off expecting to read, understand and analyze technical Fortune 500 companies, publicly traded financial statements. You start at home with what you know, in the same way you started to read with Dick and Jane and Spot. There are two main types of statements, sort of like vowels and consonants. You can start by understanding the difference between an income statement and a balance sheet. From there, you will begin to see how income, expenses, assets and liabilities are organized to tell stories – much in the same way that letters are organized to form words, which form verbs, nouns, adjectives, etc. that eventually become sentences, paragraphs and whole stories.