Focus on Actual Cash Flow
A lot of people like to use rules of thumb with their finances. Don’t fall for that. You are not average. No one is.
If the goal is to do everything you want in life and die with at least a dollar in your bank account, there is a simple equation to know whether you are on the right track.
It’s what you have plus what you make minus what you spend.
That’s it. That’s all that matters. It’s a simple equation that takes a lot of work to get through.
You Must Know:
- What you make
- What you spend
- What you have
For most people, it’s the spending that gets in the way. We simply don’t want to be aware of what our lifestyle costs. But you can see how that doesn’t fit with the desire to maintain or increase your lifestyle going forward.
To be fully in control of your finances, you have to be on top of all three of these. Also, by focusing on the reality of your actual cash flow instead of rules of thumb or comparisons to your neighbor, you will be dealing with the facts that will help drive you to success.