Friday, February 22, 2008

Are watching what you are spending on?

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The last time I attended Abang Abu's Map Lesson, he mentions this...One of the secrets of being rich is knowing what you are spending on. Write down every single thing that you spend on and everything that receive.

According to Robert Kiyosaki's theories that compares the poor to the middle income person to the rich person it shows that a rich person need not have a high salary but to know how you are using the money and what you are spending on..From the many cases of playing SMART MONEY and CASHFLOW games, I began to realize this...that even the lowest paying person could be rich. It is even easier for a low income person to be richer than a high profession job..

The reason is simple! When you have a lower salary job, it means that you can keep your expenses low and the Passive Income is easier to cover the expense in the long run. Compared to a high profession job, the expenses are much more thus the need to have more assets to make up for the Passive income.

Well you may not understand what I'm talking about all above...This post is meant to explain to you why you need to watch your expenses and understand whether you are spending on things that make money or are you spending on things that just aren't needed.

So here's a simple system which you can follow:

Salary: $1500

Put to savings (40%) - $600
Balance: $900


Food - $300
Transport -$150
Charity (10%) - $150
Parents (10%) - $150
Entertainment / Clothes - $100
Total Expense: $850

You have a balance of $50..So what do you do with this money?
My suggestion is invest in it.

Usually I would use it to buy books or softwares for my internet business.

Well the process requires a lot of effort in updating and writing your expenses down. Please do this. It will really make a difference when you write all these down else it will be difficult for you to make realistic goals...Furthermore when you start writing down, you will realise what you are spending too much on...

Give it a go and see the difference!!

My Life Mission: I enable others to discover purpose in their lives and empower them to pursue their dreams and live life to the fullest with God's blessing.

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Are watching what you are spending on?