When you are single, have a great job and a little aloof from Earth, one tends to spend and place money where it does not grow or in places where it (money) evaporates. The urge to spend on toys that are economically "useless", fashion trends that make you cringe and other items that rich people tend to have. A difficult mindset to break or change is the habit of irresponsibility towards finances. That is your typical Pinoy yuppie.
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Showing posts with label Personal Finances. Show all posts
Showing posts with label Personal Finances. Show all posts
Another aspect of Time Utilization and Money as it relates to business success is that of how one spends leisure time. Financial education is a must for bustling entrepreneurs and can be likened to riding a bike.
Let us say for example you are interested to learn how to ride a bike. First step naturally would be to read about literature on how to ride a bike. After getting the basics down, you try to get on a real bike to test the theory behind it. After a few applications and a few bumps here and there you decide to ask help from a cousin of yours who knows how to expertly ride a bike and with a few practice sessions, you become better at it. The same is true in business-- Reading about the literature, finding a mentor and applying the principles are crucial to the learning process, but if one spends most of his/her time in entertainment instead of gathering and learning business concepts and trying them out, the odds against success increases.
Financial education needs a separate time allotment and chances are, if you are employed and starting a business on the side then it would be wise to use spare time efficiently by learning all you can about business. This can be a difficult choice to make especially in a world that is full of entertainment options. There is a theory that if you decide to take on difficult options NOW, the process tends to become easier whereas, having an easy life now would most certainly yield a difficult one LATER on. Or in other words, that which is easy becomes difficult LATER ON and that which is difficult becomes easy LATER ON. It's your choice.
Another aspect of Time in relation to Money is the choosing of worthwhile advisers. When we mention about financial education, it would be wise to choose authors that are credible and have real life business or investing experience. It would be futile to grab every book that talks about business. Not everyone who writes about business knows what is actually going on in real life scenarios. It would save you much more time if you could go to sources that can give good, actual and worthwhile advice and find mentors who are actually succeeding in the field of business. It would be a great waste of time if you follow advice from people or authors that do not have real life experience because in essence, you become a guinea pig of sorts. Click Here to Read More...
Let us say for example you are interested to learn how to ride a bike. First step naturally would be to read about literature on how to ride a bike. After getting the basics down, you try to get on a real bike to test the theory behind it. After a few applications and a few bumps here and there you decide to ask help from a cousin of yours who knows how to expertly ride a bike and with a few practice sessions, you become better at it. The same is true in business-- Reading about the literature, finding a mentor and applying the principles are crucial to the learning process, but if one spends most of his/her time in entertainment instead of gathering and learning business concepts and trying them out, the odds against success increases.
Financial education needs a separate time allotment and chances are, if you are employed and starting a business on the side then it would be wise to use spare time efficiently by learning all you can about business. This can be a difficult choice to make especially in a world that is full of entertainment options. There is a theory that if you decide to take on difficult options NOW, the process tends to become easier whereas, having an easy life now would most certainly yield a difficult one LATER on. Or in other words, that which is easy becomes difficult LATER ON and that which is difficult becomes easy LATER ON. It's your choice.
Another aspect of Time in relation to Money is the choosing of worthwhile advisers. When we mention about financial education, it would be wise to choose authors that are credible and have real life business or investing experience. It would be futile to grab every book that talks about business. Not everyone who writes about business knows what is actually going on in real life scenarios. It would save you much more time if you could go to sources that can give good, actual and worthwhile advice and find mentors who are actually succeeding in the field of business. It would be a great waste of time if you follow advice from people or authors that do not have real life experience because in essence, you become a guinea pig of sorts. Click Here to Read More...
This is going to be a little tough on the bones. When they say that building a business is 90% Emotions and 10% Technicalities, they were not kidding. Being in a business is a very emotional thing because of the MONEY involved. There are various ways that the money in a business can make or break the business and the business person:
1st- Without the skill of reading or making financial statements, one would not know the difference between SALES, GROSS PROFIT, NET PROFIT and so forth. I know a lot of people who take money to spend for their personal lives from SALES (if you think that is a good idea then I would suggest you get educated with financial statements.)
2nd- Mixing personal money and business money, almost all of budding entreps are guilty of this at the beginning but somehow we kind of evolve into 2 separate entities. Mixing personal money and business money will drive you nuts and chances are, you wife will scowl at you all the time. (guaranteed!)
3rd- Not knowing the ratios of a business and knowing the demographics of expenses in a business will leave you in the dark and lead to bad decisions. Ratios that need to be found out include but are not limited to: Income to Expense Ratios, Profit Margins, Return of Investment, Net Margins etc..
4th- Just because sales is good, business is good. This can become a very naive statement to make. Others would justify splurging and spending on liabilities just because they are selling very well, although there might be some truth to that, it is only a small piece of the grand financial statement. The bottom line is what counts and how consistent a business can give such a bottom line.
Truth be told, a business will often reflect the ability of the owner to manage his or her own finances. Small victories lead to much larger victories. Private victories lead to public victories. Yes, you have it right, one needs to manage his own personal finances before he can manage the finances of a business.
One of our readers, Jay Castillo has a very good article about this in his blog. Click here to read.
When I started out as a sole proprietor, I practiced paying myself first. Since I was single and had little liabilities, i managed to save 50-60% of my income to invest in my business and also to further my technical skills. All that hard work really paid off. If you have not started this habit, you can acquire information about managing personal finances from a lot of sources.
Be awesome! Click Here to Read More...
1st- Without the skill of reading or making financial statements, one would not know the difference between SALES, GROSS PROFIT, NET PROFIT and so forth. I know a lot of people who take money to spend for their personal lives from SALES (if you think that is a good idea then I would suggest you get educated with financial statements.)
2nd- Mixing personal money and business money, almost all of budding entreps are guilty of this at the beginning but somehow we kind of evolve into 2 separate entities. Mixing personal money and business money will drive you nuts and chances are, you wife will scowl at you all the time. (guaranteed!)
3rd- Not knowing the ratios of a business and knowing the demographics of expenses in a business will leave you in the dark and lead to bad decisions. Ratios that need to be found out include but are not limited to: Income to Expense Ratios, Profit Margins, Return of Investment, Net Margins etc..
4th- Just because sales is good, business is good. This can become a very naive statement to make. Others would justify splurging and spending on liabilities just because they are selling very well, although there might be some truth to that, it is only a small piece of the grand financial statement. The bottom line is what counts and how consistent a business can give such a bottom line.
Truth be told, a business will often reflect the ability of the owner to manage his or her own finances. Small victories lead to much larger victories. Private victories lead to public victories. Yes, you have it right, one needs to manage his own personal finances before he can manage the finances of a business.
One of our readers, Jay Castillo has a very good article about this in his blog. Click here to read.
When I started out as a sole proprietor, I practiced paying myself first. Since I was single and had little liabilities, i managed to save 50-60% of my income to invest in my business and also to further my technical skills. All that hard work really paid off. If you have not started this habit, you can acquire information about managing personal finances from a lot of sources.
Be awesome! Click Here to Read More...
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