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ISSN:2141- 5994 VOL 2. NO 8 | NOVEMBER, 2014 www.businessiqnetwork.com I BUSIN SS DIGEST THINK. BELIEVE. BECOME The System of Money SPECIAL ANNIVERSARY ISSUE

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BusinessIQ Digest is a business manual for budding and established entrepreneurs seeking to grow their businesses.

Transcript of Digest issue8

Page 1: Digest issue8

ISSN:2141- 5994 VOL 2. NO 8 | NOVEMBER, 2014



The System of Money


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Graphics/Page Planning

Alfred Ade-Ijimakinwa

Valentine Okolo

Theophilus Umoru,

Kayode Kasum, Aborishade

Uchenna Osondu

Augusta Onwusanya

Adsnique Consults Ltd.

Charles O’Tudor,

Chief Olujimi Olusola III

Chris Parkes

Anselem Ohasuru

Plan Your Thought 6

Squandering Your Most Resource 8

Pause and Refresh For Improved

Productivity 9

4 Critical Things Every Leaders

Needs To DO 10

Is A Friend In Need, A Friend Indeed? 11

7 Things A Budget Isn’t 14

Anyone Can Learn How To Make Money

With These Methods 16

10 Things Yo Don’t Want To Tell

Yourself About Money 17

The Seven Keys To Financial Success 21

6 Essential Money Moves For People

With Variable Incomes 23

Business IQ is published by Tri-planetary Solutions

Send your letters to: BusinessIQ Magazine, 16 Bode Thomas Road, Surulere, Lagos, Nigeria.

email: Letters should include the

writer’s full name, address and phone number and may be edited

for clarity and space. For advert placement, call:

2349097563396; 2348023157234.

[email protected]

2014 Tri-planetary Solutions.All right reserved.



Associate Editors



Distribution Manager

Advert Manager

Board of Advisors

Print Production

Benjamin Kwentua, Rachel Hill,

Warwick Merry, Joshua Zerkel,

Nathan Jansch, Mitchell Osak,

Ayad Mirjan, Fabrienne Fredrickson,

Ezinne-Kufre-Ekanem, Ron Kaufman,

Stephine Frank.

Executive Contributors


Victor OsareWebsite

Daisy Saunders

Sue Becker

Benjamin Kwentua

Michel A. Bell

Fred Siegel

Sheryl Nance-Nash

Jachinma Agu

Alfred Ade-Iimakinwa

Mary Beth Storjohann

Eugene Vollucci

Robertson S. Singleton

VOL 2. No 8/2014

Note: November to Remember 4

Capital Gain And Cash Flow 34

Wealth Without Risk-An Oxymoron 26

The System Of Money 28

3 Essential Tips To Growing Your Money 31

How To Increase Your Income 33

Nimi Akinkugbe

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NoteThe November To Remember

Alfred Ade-Ijimakinwa

The global financial crisis started in 2007, but the

domino effect did not hit the economy of my

country, Nigeria, until 2009. This unanticipated

crisis threatened and led to the collapse of large financial

institutions: smaller money houses were closed down or

swallowed by bigger ones through merger. The once that

did not survive the sledgehammer of Central Bank were

totally wiped out and some of their CEOs ended up

behind bars because they were guilty of borrowing huge

loans without collaterals.

The Nigeria stock market, which was the heartbeat and

hope of employees, pensioners and big league business

owners also crashed. Many lost their lifetime

investments overnight, some committed suicide and

some died when they heard the news of the failed

market. Those who survived the claws of death ended up

in some hospitals with expensive sicknesses such as high

blood pressure, cardiac arrest and stroke.

The real estate market did not go unscathed; it was

crippled, resulting in evictions and foreclosures. Many

lost their homes and personal properties due to accrued

debts. It was in the media that top business moguls

auctioned their mansions to offset their uncollateralized

loans to protect their dignified names and escape being

thrown into jail for financial treason.

Blue chip companies were not left out of the entire

mishap. These nationally recognized, well-established

and financially sound companies who knew how to

weather downturns and operate profitably in the face of

adverse economic conditions struggled to stay afloat.

They downsized and lay off thousands of employees

who were fired through mere phone calls, emails and

text messages. Some employees appeared in their

offices only to realize their desks had been cleared for

the dedicated time they allotted to their jobs were no

longer required.

Small enterprise owners, who never had the passion for

what they do, but went into business for mere profit,

were rooted and discarded from the business terrain by the

financial tsunami. And countless of them who had invested

their entire life savings in their businesses did not live

another day to see the aftermath of the entire crisis.

It was during this crisis, which resulting effect was felt far

and wide, across numerous geographic regions and

industrial sectors, that I received an email from Stephen

Fairley, the CEO of The Rain Maker Institute.

The Rain Maker Institute is the largest law firm marketing

company in the United States of America. Stephen said in

his mail “that's great! [You are] launching a magazine in the

midst of recession. I love fearless entrepreneurs”.

Maybe I was fearless or simply do not know the difference

between a threatened and calm economy. But one thing I

was so very sure of—I was set to launch the maiden edition

of BusinessIQ magazine. And I did.

So, in November 2009, the supposed maiden edition of

BusinessIQ magazine was launched with the caption

“Global Crisis: How to make profit and expand your

businesses in times of recession”. This article detailed the

series of recessions from the 1797 panic caused by deflation

when the Bank of England crossed over to the new colony to

the dot.com bubble bust to the attack on the twin towers in

New York on September 11, 2001 to the financial crisis in

2007. And it highlighted how you can capitalize on

recession to expand your business and personal life.

Today, it's been five years since the crisis; the dust, perhaps,

had settled down, but things are no longer the same. For

some, it was an event that made them richer, but for some it

was a nightmare that led to penury. For BusinessIQ, we

weathered the storm and today we celebrate our 5th

Anniversary. This Anniversary issue is dedicated to help

you become financially strong. We hope you will.

Thank you for being part of our ups and downs; our failures

and successes. Like the usual saying “a knight in shining

armor is a man who has never had his metal truly tested”. For

us, our metal had been tested and today, we emerge a true



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By Jachinma Agu

Plan Your Thought

Thought is the mental imagery of what you want to do, have or achieve. They are words in pictorials playing through your mind to keep you abreast of

your desires and expectations. In other words, you are your thought! Did you just read that? Yes, you are your very thought for a man is what or how he thinks in his heart. You cannot be different from your thought!

Your thought is so important because it has the ability to make or mar you. Your thought will either move you forward or set you backward. As you read through this piece, what is running through your mind now? Where is your mind stationed? The positioning of the mind is what makes the difference between the failures and successes.

In other to help man think aright, the Scripture gave us ideas of what we should set our thoughts on. We are advised to meditate on things that are true, lovely, noble, and gracious and things that bring good report. These should form the basis of our thought pattern.

Structure your thought pattern to what you want to achieve and who you want to be. We are expected to create and plan our thought! Don't allow anyhow

thought to settle down in your mind. Think on blessings and not curses, beauty not ugliness, health not sickness. Meditate on wealth not poverty, success not failure, grace not disgrace!

Use the powerful tool of thought and develop your mindset to believing and knowing you can change anything to your favour; yes, you have God`s Word so fashion your thought according to God`s Word.

You create and plan your thought by seeing, reading and hearing the right things. You can cream your dream by enriching your thought with clean and desirable things. When your thought is right, your imaginations will be colourful; you will then dream and not have nightmares!

Even if you find yourself in a filthy environment, you can live in your own world by creating and building a beautiful thought for yourself and around yourself. Learn to live from inside to outside, bring out those magnificent estates within you and live in them. Live on your good thoughts and they will manifest outwardly.

Kind and lovely thought originate from God while evil and revengeful thoughts are initiated by the

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devil. Wrong thoughts pattern your life towards it for we live our thoughts.

We live from inside to outside. Our thoughts create our lifestyle. If you live healthy, it means you think healthy thoughts and if you think unhealthy thoughts, it will reflect in your health and lifestyle too.

Your life today and tomorrow is patterned alongside your thoughts. You are therefore advised to create good and wonderful thoughts today so they will deliver a beautiful tomorrow for you. Your future is dependent on your thought today, therefore think good and lovely thoughts now!

Your thought should be creative and not destructive; it should be full of hope and faith for a more excellent future. How far you go in life and in your career is dependent on how far you can think good thoughts! Choose your thoughts, carve them in your mind and fix your gaze on them always.

The Scriptures advised us to guard, protect and tend our hearts with God`s Word. You are the guardian and custodian of your heart, remember this always! Your future will definitely head to the same direction with your thoughts; this is why planning your thought is so important.

Agreed you may not stop some negative information from finding their way into your mind as a result of what people around you say or do; but you can stop

the unpleasant stuffs from registering and dominating your thought and mindset. Remember thoughts can either keep you on the sideline of life or deliver the best life to you.

Always set your mind to think thoughts of victory even before the battle begins, this way you will experience limitless possibilities. Your thinking is what differentiates you from others, learn to discipline your thought with God`s Word. Direct your mind to think the best thoughts.

As believers of the Gospel, we know we have the mind of Christ, we should therefore think the thoughts that Christ will think and approve of. Wrong thinking will take your life the wrong way, channeling your thoughts to the right direction will cause you to soar in life.

You can use songs, scriptures and godly pictures to chart your thought-course in the right direction. Remember victorious living is for those who plan their thoughts well!.

Agu Jaachynma N.E. is a successful, dynamic, prolific and best-selling author. She is the Author of the best-selling Book: Woman: You've Got ALL IT TAKES. Her book is available on Amazon

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By Daisy Saunders

Squandering Your Most Resource

Daisy Saunders is an inspirational speaker, professional trainer and a u t h o r. Vi s i t h e r w e b s i t e : http://www.daisysaunders.com and to f o l l o w h e r b l o g , http://www.fitfabulousfearless.com.

To squander is to waste. A resource is something that can be used for support or help. Or, something that's ready for use if

and when it's needed.

What is your most valuable resource? Some may argue that money is our most valuable resource. While it is a resource, it's not our most valuable resource. Our most valuable resource is TIME. I differentiate between money and time in the following way. Money can be replaced, time cannot. When you waste your time, you waste your life.

How often have you uttered these words, "I don't or didn't have time"? Consider this. There is no such thing as the lack of time. We all have time to do whatever we really want to do. We all get the same amount of time each week—168 hours. Some people accomplish a great deal in those 168 hours, while others get little done. Some people complain about not having enough time while others simply make the best use of the time they have.

People who accomplish everything they want and need to do have learned the fine art of time management. They understand that time management is really self management; that we can't manage time, we can only manage ourselves.

To avoid squandering your most valuable resource, here are my 5 best self management tips.

1. Begin each day with something you want to accomplish. This assumes that you have a goal. For example, at the beginning of each day, I decide on at least one thing I will accomplish. My one thing is

always related directly or indirectly to one of my goals. One of my major life goals relates to health and wellness. Therefore, each day I engage in at least one activity to support this goal.

2. Set priorities that reflect your values. Decide what is really important; that is, those things you must do or you will suffer serious consequences. Every activity in which you engage is not a must do.

3. Use a "to do" list. This is not a list of those activities you plan to do in life. It's a list of things you plan to do that day. Make sure your list includes at least one activity or task that supports your goal.

4. Say "no". Stop letting "yes" fly out of your mouth at every request made of you. "No" is not a bad word nor does it make you a bad person. Saying "no" is about setting boundaries and priorities.

5. Establish limits and boundaries. Limits and boundaries protect you from other people's actions. They protect your time, space, and energy. And, they set the guidelines for how others are to treat you. Boundaries make it easier for you to say "no".

Time is your most valuable resource, use it wisely.

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By Sue Becker

Pause and Refresh for Improved Productivity

Internationally known organizing and productivity consultant, author, and speaker Sue Becker of From Piles to Smiles® enjoys helping people live better lives by creating customized systems to overcome their overwhelming paperwork, clutter, and schedules. To know more about her, visit: http://www.pilestosmiles.com

Ever have one of those days when you're so busy you barely have time to go to the bathroom or grab a bite to eat? Who am I kidding—we

probably all have! No matter how busy you are, however, taking time to pause provides a much-needed break and reboot for your brain.

Why is that important? When you spend your day in reactive mode, busily responding to everything that comes your way, you miss opportunities to recalibrate and make sure you're focused on what's important. You're so busy taking on tasks and running with them that you may miss the fact that you're running the wrong way or with the wrong task, as something else may be more worthy of your time at the moment. We're so caught up in the "doing" that we don't allow time for pausing and thinking.

How do you know when you need to pause and refresh? When you show up at a meeting unprepared or without supporting materials; when you hop on a phone call without preparing for what you want to discuss; when you forget to capture outcomes from meeting or phone calls and things fall through the cracks; when dinner guests are on their way and you're just getting back from the grocery store; when you've been busy all day but have no idea what you actually were doing - the list goes on and on.

So how can you make pausing and refreshing an ongoing habit? Consider what athletes, musicians and other types of performers do: they take time before the

main event to prepare, not only physically, but mentally as well. For example, hockey players don't just lace up their skates and hop on the ice; they sit, sometimes trance-like and get their games face on - visualizing how they'll take on their opponents. It's just part of their normal game-day routine.

Can you make it part of your routine to spend time reviewing meeting agendas well before the meeting so you can prepare? Can you make it a habit to wait to dial the phone until you've had a chance to review the purpose of your call and rehearse what you want to say? Can you take a few moments at the end of the day to debrief from all the day's activities and capture next actions? Can you plan your dinner party the week before it is scheduled? The answer to all these questions, of course, is yes you can—you just have to make these behaviors a habit. Signs, sticky notes, timers and even an accountability partner are just a few examples of ways you can remind yourself.

Improve the quality of your day—pause, breathe, and regroup often. It might take more effort to think rather than to react, but in the long run its result will improve your productivity and the quality of your life.

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As a leader, you're responsible for your team. You need to help your team run efficiently, and you need to make decisions that are best

for your team. Most leaders have their own way of leading. Average leaders lead by force, but great leaders lead by example, and through inspiration. So if you dream of being a great leader, one that will increase the productivity of your team and maintain a happy work environment, the following are four essential things you must do.

1. Have a great attitude: Your team is not going to want to follow a leader that is always in a bad mood. Instead, you need to be happy when around your team and have a positive attitude. Let your team know when they do a good job, and constantly use words of encouragement to help them continue to improve. If you are positive and always have a great attitude, you'll encourage your team to do the same.

2. Be realistic: It's very important that a great leader is realistic with their goals. You need to remember that sometimes, there's just no possible way that something is going to get done in a short time frame, so don't set goals your team can't achieve. If you're constantly setting your team up for failure, and then constantly getting mad at their lack of success, you're not going to create a healthy working environment, and you're not being a team leader. It's very important that you truly think about the goals at hand and make them attainable for your team.

3. Delegate fairly: As a leader, it's your responsibility to delegate responsibilities to your team. In order to be a great leader, it's important that you delegate fairly. If you're constantly giving the easy assignments to certain individuals, you're going to create tension in the workplace. Make sure that you truly think about each team member's strengths, and then delegate the necessary responsibilities to who is best suited for that job. Doing this not only makes your team happy, but it also helps to improve productivity, which is the ultimate end goal. When you delegate responsibilities, it's also important that you give some of that work to yourself. Nobody likes a leader who dishes out tasks and doesn't do any part of the project to help the team. If you truly want to be a great leader, you won't be afraid to get your hands dirty and tackle some of that

responsibility on your own.

4. Stand up for your team: A great leader has no fear, and it's very important that you stand up for your team whenever necessary. For example, if a client is asking for something that's impossible, you have to stand up to the client and let them know. Tell the client that this project cannot be completed in that specific time frame, at least, not if they want quality work.

Your clients will be happy to receive a quality project that took longer than to receive garbage on time. Plus, your team will be happy that they're not rushing through projects. When you stand up for what your team needs, you're being an accountable, and this is important. You need to make sure that the lines of communication are open between you and your team, and if your team is having issues with client demands, you need to step in and take care of it. LEAD YOUR LIFE!!!

Benjamin Kwentua is a Business Consultant, Speaker and the Founder of Purpose Track. He is also the bestselling author of LEAD YOUR LIFE, a must read book for anyone who intend to live a significant life. He can be reach on: +234 802 312 0576 or [email protected]

By Benjamin Kwentua

4 Critical Things Every Leader Needs To Do

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Shakespeare's Polonius offers the sage advice to his son Laertes in Hamlet "Neither a borrower nor a lender be, for loan oft loses both itself and

friend." Consider this scenario: A friend calls you and needs to see you urgently. It can't be discussed on the telephone; she must visit you personally. You oblige and she explains that she has run into serious financial difficulty and requires a sum of N50, 000 immediately to assist with her rent. She is expecting some money that she is being owed and promises to pay you back within two months.

You are touched by the sorry tale and oblige. She blesses you and visits your home early the next morning to collect the cash. Then, you don't hear from her for several months. You call and she doesn't answer her phone, or respond to text messages and she totally disregards your e-mails.

After many months, you see your "friend." When you ask her why she hadn't returned your calls, she says, "Oh you know the network has been so bad, I kept trying your number and then I lost my phone and all my numbers." We all know that such excuses hold no water; your friend is just avoiding you like the plague because you lent her money! She has bought a new

By Nimi Akinkugbe

Is A Friend In Need, A Friend in Deed? car, whilst yours is long overdue for a change. Gone on holiday to Dubai, and had the party everyone is talking about. Another year passes and you've seen her several times at social occasions and the debt has never again been mentioned. Sound familiar?

No matter how much you lend to friends or relatives, whether it is N500 or N500, 000 it is reasonable to expect to be repaid. You lend the money because you trust the person to keep their word. Money "palaver" breaks up or at the minimum can strain relationships. Sometimes, trying to collect it can breed awkwardness, resentment, guilt, and anger. It isn't that lending money is the problem per se; it is that money changes the nature of personal relationships. However, a loan to a friend does not always have to result in the loss of both the friendship and the money if a few issues are considered.

It is nice to be able to help out a friend or loved one faced with a health crisis or other medical emergency, death of a family member, a job layoff, divorce, a new business venture or to assist with their rent or children's school fees. You should know what the money is needed for.

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If it is a sudden illness or calamity or other serious need, then you should probably consider. After all, that's what friends are for. Think twice before supporting an indulgence.

Think carefully before lending money. Can you afford to lend it in the first place? Do you realize you are likely to get back only the principal with no interest? If your friend run into difficulty and couldn't pay you back, will this put you in financial difficulty? Unexpected events occur that could mean that you need money in a hurry. Can your own emergency fund accommodate your unexpected need as well as your friend's crisis?

Is it a loan or an investment? If your friend is starting a new business, is this money an investment in the business and buying you shares in the business or do you expect to get your money back in full? Are you comfortable with the risk and is there formal documentation in place?

How much should you lend? You must decide what you consider to be a substantial sum. Remember most experienced borrowers approach several people at the same time and can end up raising a tidy sum. Don't play Father Christmas. You don't have to put up the entire amount; a percentage would help.

Don't be too casual about lending money. Even though it can be embarrassing, it's always best to agree a repayment plan in advance. Smaller amounts can be lent without any documentation but for larger amounts, a promissory should include details such as the name of the lender and borrower, the loan amount, date, interest rate if applicable, schedule of repayment and both signatures. For substantial amounts, you may want to consider legal advice.

Once you agree to loan the money, try not to make your

friend feel obliged to you as this can put a strain on the relationship. It is no longer up to you how it is spent. Don't change the way you treat the recipient, don't expect special favors from them or change your personal expectations of them. Be discreet; the last thing your friend wants is for you to publicize the fact that you lent them money.

Should you charge interest on a loan to a friend? It depends on the amount of the loan. If the loan is for a significant sum, you may wish to charge interest at least equal to the applicable Federal Government Treasury Bill rate, which will vary according to the length of the loan. You are not trying to exploit a friend but this can serve as a guide.

It is only decent for an initial request to come with a repayment proposal. If a borrower doesn't mention how they intend to pay you back, that should raise a red flag. What's their track record like? Are they constantly borrowing? Don't get caught out by a notorious borrower.

If you cannot afford to part with any money at this time or feel uncomfortable about it, just say no. Sometimes borrowers can make you feel so guilty that you succumb to the pressure. It's far easier to say no from the start than to have to hound your friend for the money.

Give instead. Borrowing and lending money are business transactions and should generally be treated as such. If this all sounds too formal for you, then its best to just steer clear of lending. Give instead. If you consider the loan to be a gift, if it gets paid back, then it's a pleasant surprise, if it doesn't, you weren't expecting it back anyway.

If you are always on the borrowing end, do remember that ultimately it is your credit behavior and credibility that will make it possible for you to approach friends and relations to support you in your business venture or other need. Don't abuse the privilege.

Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. To contact nimi, email info@moneymatterswithnimi.com. Website: www.moneymatterswithnimi.com


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Address:Abuja: Plot 43b, Lobito Crescent, Wuse II, AbujaPortHarcourt: 356 Evo Road, GRA Phase 2, PortharcourtPhone: 09 870 3866: 0805 152 0919 Website: www.yutees.com

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7 Things A Budget Isn’t By Michel A. Bell


Preparing and working with a budget terrifies many people. They believe popular budget myths and misconceptions. They think the

budget will control them; however, when they realize a budget simply is their best estimates of resources needed to do future goals and plans, their misapprehensions tend to fade.

These seven things a budget isn't cause people to shy away from doing a budget resulting in dire consequences:

1. A budget isn't about figures, but goals and plans

2. A budget isn't about ideal percentages, but specific situations

3. A budget isn't a strait jacket, but a freeing tool

4. A budget isn't needed only when in debt, but always

5. A budget isn't going to change your finances, but will help lifestyle choices

6. A budget isn't a pass to spend, but a road map of likely effects of decisions

A budget isn't a strait jacket, but a freeing tool: You don't have to meet your budget! When events don't turn out as expected, adjust your behavior to new conditions, and modify the budget appropriately. If you plan to go to college or buy a car in the budget period (next year) and events change so you can't do either, remove funds in the budget for these times. Naturally, you adjust but remain within available resources taking on no extra debt.

A budget doesn't control your spending but shows how you plan to spend in a future period to achieve specific goals and plans. When goals and plans change, adjust your behavior and modify the budget accordingly.

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Michel A. Bell is an author, speaker, adjunct professor of business administration at Briercrest College and seminary, and founder and president of Managing God's Money. to providing free Christian financial advice and biblical stewardship guidance. For information on living a debt free lifestyle, visit http://managinggodsmoney.com

When I was young

I thought that money was

the most important thing in life;

now that I am old I know that it is

-Oscar Wilde

A budget isn't about yesterday, but tomorrow: Often folks tell me they don't need to budget because they know their spending patterns. Surely, knowing what you did is helpful, but that's the past. One reason to budget is to learn opportunities and challenges that might exist in the future so you can develop strategies and plans to deal with them. Another view of the budget is as a tool communicating your future plans.

A budget isn't about math or figures, but goals and plans: A budget is not about spreadsheets, software, modules; these are mere aids to help you record and analyze effects of your decisions. You decide where, when, why, and how to spend to achieve specific goals; not the budget. And you decide not to spend; not the budget.

If your goal is to return to university, before the future period you would look at resources, trade offs, and decisions needed to achieve that goal. Most of all, you would examine the opportunity cost of decisions—things you can't do because of decisions reflected in the budget.

A budget isn't about percentages or profiles, but specific situations: In Canada and the USA the average household of about 2.5 people spends around 50% of income on food, clothing shelter and transportation. Individual household spending vary according to income, but overall that's the pattern; however, those numbers are irrelevant to your budget. Don't aim for them; your circumstances are unique, focus on your goals, plans, and affordability.

A budget isn't needed only when you are in debt, but always: A further budget perspective is as a GPS-a road map that reflects behaviour needed to take you from where you are to where you plan to be. When you travel to an unfamiliar location without a GPS or equivalent you will get lost. So too, you will be lost

without a budget. In or out of debt, wealthy or poor, good stewardship includes working with a budget.

A budget isn't going to change your finances, but will help lifestyle choices: A budget isn't going to change your financial condition, but it will help you see in advance effects of lifestyle choices. It isn't going to make you rich, get you out of debt, or make you save, but it will help reduce stress and assist your understanding of the effects of lifestyle choices. Surely, when you do a budget and follow it diligently, you will understand the budget is merely your tool to help you choose wisely.

A budget isn't a free pass to spend, but a road map of likely effects of decisions: Governments and bureaucrats, creative wasteful spenders, view budgets as opportunities to spend on pet projects. When their fiscal year end approaches, their primary goal is to spend unspent budgets even if it means spending wastefully. Sadly, some private sector corporations do the same because they do not wish to lose their budgets. If you budget to buy a suit or a dress and you don't buy them, remove the full allocation from the budget. Similarly, when you achieve your goal, remove the full budget allocation explains.

It's crucial you understand and dispel these seven things a budget isn't and focus on what it is: A road map; a GPS; an estimate of resources needed in a specific future period to do targeted goals and plans.

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Anyone Can Learn How To Make Money With These Methods By Robertson S. Singleton

Making money doesn't have to be difficult. Those who hate their normal nine to five jobs have other options to earn money.

These different methods can give people of all age financial freedom. Gone are the days of worrying about bills and drowning in debt. Instead, people have the chance to change their lives and earn a significant income the way they please.

People can write a blog, trade in an international market, or buy and sell precious metals. With the proper resources and knowledge, anyone can learn how to make money in their own time.

Since the advent of the internet, people have been making fortunes writing blogs. All it takes is a bit of passion, dedication, and a lot of hard work to make money with blog.

There are numerous blog hosting sources out there that give writers the tools to create a stable website. Many of them are free, allowing writers to create a blog with no cost to them. After finding a niche that will attract attention, writers will need to promote their blog.

Income relies solely on web traffic. Ads and affiliate programs will pay writers for the number of visitors they have. Successful blogs can earn a

significant income that will continually grow. Additionally, blogs can generate income for many years to come, even if the writer has stopped contributing.

The foreign exchange market, or FOREX, is another great option to make money. Forex is an international market for the trading of currencies. While the last sentence alone may be enough to give many people a headache, it's a very lucrative market that provides a sizable income. In any given day, up to 4 trillion dollars go through the market. Traders are located all over the world, proving that it's a market that's very much alive and thriving. It's very complex and strategic in nature, needing extreme dedication and research. There are a lot of resources to help beginners. A forex tutorial and a great platform is all it takes to begin the trading process.

Purchasing precious metals can help to diversify a portfolio and protect assets in the case of economic turmoil. However, it's also a great investment that can turn a profit in only a few years. Those who buy gold and silver are investing in a product that doesn't degrade in value. Gold is especially resistant to inflation. As the price of currency drops, gold's value will actually go up. People can easily buy gold from a number of different traders. Traders will often hold onto the gold to ensure its safety. When selling, owners will surely earn a profit.

Earning money has never been easier. There are numerous ways to earn a living without having to spend hours upon hours in an office. With proper education and the right amount of determination, anyone can free themselves from their financial burdens. Ordinary people can earn an income beyond their wildest dreams.

Robert S. Singleton is an author and webmaster. Robert has been writing content and working in the online industry for over ten years.


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10 Things You Don’t WantTo Tell Yourself About Money By Sheryl Nance-Nash

When it comes to money, mindset really matters. What you tell yourself over and over again becomes what you do over

and over again. Well done, if you're giving yourself the right speech. If not, now you know what's standing between you and wealth.

"The masses love the lottery because deep down, they believe it is their only chance to get rich," says Steve Siebold, author of How Rich People Think. "The fact is; they're probably right. Not because they aren't capable, but because they don't have faith in their own abilities, and their beliefs about money limit their financial success."

Simply put, says Siebold, "Beliefs dictate behavior and behavior dictates results." Translation: Stinking thinking gets in the way of financial success.

Here are 10 thoughts that will get you in long-term

financial trouble.

1. What if I die tomorrow? And I could have spent my money instead of saving it? "This will prevent you from ever really saving for the future," says certified financial planner Karen Lee of Karen Lee and Associates. "Your chances of dying prematurely are minuscule [compared] to the probability of living to old age." Don't give yourself a poor excuse not to save. "Replace that thought with, if I do without this one purchase today, I won't have to worry about money tomorrow, or when I get older," says Lee.

2. I can always figure out how to pay for it later. This deadly idea encourages you to spend money that you don't have. "Ask yourself, if I don't have the money to pay for this today, why do I think I will have it down the road?" asks Lee. Instead, wait until you've saved up the money for

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purchases. Practice delayed gratification. "You will actually enjoy the purchase more if you make yourself wait, as you build up anticipation along the way," she adds.

3. It's a good investment. "That's what millions of Americans told themselves in the mid-2000s about houses that were beyond their reach and look how that turned out," notes Lee. Overreaching financially sometimes can work out, but usually, it's a recipe for disaster. "Tell yourself that when you are financially sound, you can have the house of your dreams, the Mac Daddy theater system, the renovated kitchen," she adds.

4. I can do it, just watch me. Confidence is a good thing. Overconfidence that you can control your spending can be the beginning of your downfall. "We think we can control our behavior this time," says Ted McLyman, a consultant with the Institute for Financial Education. "We accept the teaser credit card application because we think we won't use it. We buy 'six-months-same-as-cash because we know we'll have everything paid off in time." "We want to believe that a bad spending choice in the past won't happen again. It can and it may," says McLyman.

5. It will never happen to me. That's true, of course until it does. "This kind of thinking has people overspending and under-insuring themselves, as it creates a false sense of security," says Lee. "They think. 'I've been at this job for over 20 years, they'll never let me go, I'm too valuable.' Or, 'If I become disabled, I could still do my job.' “Maybe the worst-case scenario won't happen to you, but just in case, plan for the possibility, she warns. "The peace of mind that comes from knowing you can handle a setback in life is priceless."6. I don't need a budget, I know where my money goes. Sure you do. But even so, there's nothing like getting your ongoing expenses down on paper or a spreadsheet and looking at the big numerical picture, says Chad Olivier, author of What Medical School Did Not Teach You About Financial Planning. Knowing where you are is the first step to getting where you want to go.

7. It's my retirement money. That's the point; it's your retirement money. It's for later, not for a European vacation or a flashy new car. "Retirement dollars should always stay in retirement accounts," says Olivier. The way to increase wealth is to consistently save over time in a diversified portfolio. When you take money out,

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you take many of the years of saving you won't be able to get back, and you will be penalized 10% by the IRS if you are younger than 59½.

8. I really deserve this. No doubt you work hard, but don't get it twisted. "What's deadly, is tying purchasing to rewarding yourself, whether it's for doing well on a diet, or actually for not spending," says Lee. The problem here is that, it's a vicious circle of spending. Ask yourself the tough question: Why is this "stuff" so important? "Why do you feel you have to have the newest, greatest of everything?" asks Dennis Marvin, a certified financial planner with Marvin Wealth Management. "Search your soul to determine why you're spending money to try to make yourself feel better." Instead, recommends Lee, find other ways to reward yourself. How about taking off from work a bit early, fixing a special dinner for you and a friend or taking time out for a talk with an old friend.

9. I can't afford to save. Truth is, you can't afford not to save. "If we're honest with ourselves, we have money. We simply don't like to make the hard choices about spending," says


10. I must have it. "The must-have attitude makes you hyper-focus on one thing, while losing perspective of everything that's around it," points out Gabriela Cora, author of Leading Under Pressure. "You convince yourself that you must have something and all your actions revolve around ways in which you can purchase those shoes, that car, or that house." Instant gratification might feel good, but just wait for the horrible financial hangover.

The good news is, change your thoughts and you change your results says Siebold. "Empowering beliefs about money lead to effective daily action that serves as the foundation for financial success."

Sheryl Nance-Nash is a freelance writer specializing in personal finance, small business and general business. Her work has appeared in The New York Times, Money, DailyFinance.com, More.com, Newsday, Crain's New York Business, thefastertimes.com, and many others.

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Page 21: Digest issue8

The Seven Keys To Financial Success By Fred Siegel

If you were offered a choice of a million dollars to spend in your business today or a book that taught you how to earn an extra million, which would you

choose? While the first option probably sounds tempting, by accepting the money you will likely take it for granted. You may end up wasting it on things you could probably do without, like new expensive office furniture or luxury company cars. The most successful business people know that every dollar you spend today is worth ten dollars in the future when invested properly. Therefore, the book that teaches you how to earn the money for yourself is a more worthwhile choice.

Knowledge has the power to earn you money. Obviously you and your business will be better off with the knowledge than with a quickly squandered million. Your respect and understanding for money will improve

by earning the million dollars on your own. Plus, saving and investing now will reap greater rewards in the future.

To gain a better understanding of smart money management and investing to help secure the future of your business, consider the following seven keys to financial success:

Key #1: Save Ten Percent of Your Income: This Key is the foundation of all your financial dealings. Aside from the value invested in savings, putting ten percent does three other things for you. First it makes you more confident. You won't have to worry about little money emergencies, and pride will grow from your control. Secondly, having money allows you to take advantage of new business opportunities as they arise. Plus, your


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Fred Siegel is the author of the best-selling book, Investing for Cowards. He is the President of The Siegel Group, Inc., a registered investment advisory f i r m w i t h $ 1 . 2 b i l l i o n u n d e r management. Fred is the host of the financial advice radio show, "Talking Money." Contact Fred at 504-566-3900.

confidence will tend to attract more opportunities. Thirdly, by saving ten percent you create a cushion. This gives your business security immediately, and it provides some security in case of uncertainties in the future.

Key #2: Learn Before You Earn: If you have no knowledge of money and investing, you will likely fear both. To gain a basic understanding, go to the library and read some books on investing and money management. These texts will give you plenty to go on. Many classes, tapes, and people exist that can help you as well, so seek them out.

Key #3: Be a Positive Thinker: Anyone can find problems with any course of action. But negative thinking is not constructive for you or the type of successful people you want to be around. The doer focuses on the upside of situations, and if you never take action, you'll never gain success—or the experience needed for success. Many times, the worst that can happen if you don't succeed is a minor setback that you can learn from.

Obviously this doesn't mean you can plunge ahead blindly. You should prepare yourself first by obtaining the best advice possible. And you should anticipate the problems. But then you must commit yourself to gain the benefits. Too many people let their negative thoughts scare them away from areas they can succeed in. They never get started.

Key #4: Invest in Areas You are Passionate About: Nothing supports success like passion. If you love what you do, your passion will carry you past the rough spots. Very few of us can make success of something we don't care about. For example, if someone offered to pay your tuition to medical school, would you be willing to put forth all the effort required to succeed at it? Likewise, panhandlers can make over forty dollars an hour, which is far higher than average. But if you are not passionate about it, then you probably won't want to do it.

In reality, you could do hundreds of things to make money in your business. But success will be even more rewarding when you are passionate about what you are doing. So invest your time and money in something you really care about.

Key #5: If It Seems Too Good to be True, It Probably Is: Sometimes people invest wildly because they are unrealistic, and other times scam artists and crooks are just after their money. Realize that you will usually lose money if you invest in long shots, or if you expect to receive very high returns. For example, playing commodities markets is a high risk

endeavor. Unlike the stock market, in commodities someone loses every time someone wins. And if you invest in this “game,” you will be playing against the producers and users of the commodities who have more information than you will ever have. Day-trading is another gamble. So no matter how safe an investment opportunity or business venture sounds, if it seems too good to be true then you are probably better off turning it down.

Key #6: To Make Progress, You Have to Get Started: Many people have good ideas or intentions, but few take action. Don't be afraid to commit yourself. Even if your start means just reading in the library, you must take action to get results. Action makes things happen for you. The more action you take, the more you will learn to take smarter actions next time. You will often learn more from your own mistakes than from your successes. This is how you gain experience.

Key #7: Build Your Own Habits: Once you've found actions that work, turn them into habits. By creating a habit, routine actions become easier and you are freed up for more creative activities. Habits also make it easier for you to continue to take action even when you don't feel like it or if you hit some other barrier.


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6 Essential Money Moves For People with Variable IncomesBy Mary Beth Storjohann


One of the thrills of being an

entrepreneur—one that also goes along

with jobs that pay commissions and

bonuses—is the feeling that the sky is the limit on

your potential earnings. But sometimes, it can feel

like the income sky is falling. Although the

flexibility and lifestyle balance can be great day-to-

day benefits, it's easy to get disoriented by the

highs, lows and general unpredictability of what

one's income will look like month-to-month. Which

is why, if your income is volatile for any

reason—whether you're an entrepreneur, in sales or

just don't have a steady paycheck—you, more than

the average worker, need to streamline your

finances and set yourself up for success. Here's


1. Know your cash flow. Having a variable

income makes it even more important to have a

detailed and clear understanding of what's coming

in, where it's coming from, what's going out,

where it's going to. Use an online tracker such as

Mint.com and ensure you're tracking debit, credit

and cash expenses.

2. Categorize. Maintaining a detailed budget will

help you to categorize and prioritize for those lean

months when you may not have room for the

"wants" in your life. Ultimately, you want to

ensure you can cover the expenses that are

imperative, and with proper planning you should

be able to. Categorize your spending to identify

select areas that you may be able to cut back on if

needed. Typically items such as dining out,

entertainment, travel, personal shopping, and other

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day-to-day "wants" can be trimmed if necessary.3. Be flexible. The roller coaster ride that is your income could translate into a variable lifestyle as well, with your having funds to splurge on extras one month and then needing to cut back to the bare necessities the next. Be flexible and prioritize your spending to ensure you're paying yourself first before jumping into allocating extras towards fun or discretionary expenses. Ensure your budget includes savings for personal goals, retirement and emergency cushions and then work in any other extras.

4. Add an extra layer of protection. Everyone needs an emergency fund of three to six months of expenses set aside. But those on a varying income should consider starting with a household expense fund to prevent the drastic swings in lifestyle that can come with the income. During some more lucrative months, set aside three to six months of household expenses to supplement you during the slow months. This will allow you to turn your savings into a paycheck of sorts to funnel in funds needed.

5. Plan for your future. If you're employed, maximize use of your employer benefit programs and retirement plans. Ensure you're not leaving any money on the table and at a minimum contribute enough to take advantage of any company provided matches. If you're self-employed, look into the many retirement plan options for entrepreneurs such as the SEP Individual Retirement Account, a Solo 401(k) or a Simple IRA.

6. Automate. Although your income can vary, calculate a conservative average and use this number to set a monthly savings goal. Schedule bi-weekly or monthly dates to review your spending and income and track where there's room for improvement.

Mary Beth Storjohann, CFP® is the Founder of Workable Wealth, specializing in financial planning for Gen Y. She works as a writer, speaker and financial coach with individuals and couples in their 20s and 30s across the country to help them to make smart, educated decisions with their money.

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Wealth Without Risk-An Oxymoron By Eugene Vollucci


Discover Life's Three Chronological Periods

Our investment philosophy is based on an individual's chronological time line, which consists of three periods: (1) asset accumulation, (2) wealth building, and (3) asset conservation.

The financial journey through life's time line starts at different levels, depending on whether you were born with a plastic or a silver spoon in your mouth. As you travel through your time line, your investment options change. Knowing where you are and what options are available will help you make the right choices.

A Winning Financial Plan up to Age 35

The first chronological period of your life-mid-twenties to mid-thirties-should be devoted to accumulating assets and acquiring basic necessities. When you're just starting

out, your assets are usually limited and the major portion of your income goes for the basic needs—food, clothing, and shelter.

This is the time to save, save, save! Amass as many investment dollars as possible. Your approach to investing during this period should be through tax-deferred plans at work or Individual Retirement Accounts (IRAs). Your degree of risk should be moderate. Investments included in this category are top rated corporate bonds, blue chip stocks, and growth-oriented no-load mutual funds.

Every effort should be made to purchase a home now. The advantages, from tax savings and equity buildup, historically outweigh the short-term benefits of lower monthly rent payments.

Be careful when sheltering yourself and your family from liability.

Only pay for protection when you're purchasing

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life insurance. Purchase whole life insurance if it will yield a higher rate of return than other investments. After reading the chapter on asset protection, you might seriously consider reducing your liability coverage.

Remember, your main financial goal during this time is tax-deferred accumulation of capital. Don't take risks with your investments. Save as much as you can so that when you enter the next phase of the time line you'll be ready to move forward.

Investing between the Ages of 35 and 50

After earnings have increased, assets have been accumulated, and basic necessities are under control, it's time to move on. Ready or not, you must face the challenges during this aggressive investment period of your life, when you are between your mid-thirties and early fifties.

The Best Financial Plan for You

Your best financial plan is to create the maximum wealth during this aggressive investment period of your life. Build financial security yourself: don't rely on others to do it for you. Many people who relied on major banks and insurance companies for financial security ended up short when these

institutions failed. The social security system will not do much better.

You should be careful not to over diversify your assets or adopt a "hold-back" attitude. You must concentrate your assets into one or two aggressive investments rather than spreading them out. Diversification often leads to ineffectiveness.

What if you fail during this period? What is your down side? If you consider your ability to bounce back because of your age, the political clout of your generation, taxes, and inflation, the real risk is minimized. Make your aggressive investments now. As you get older, your ability to rebound declines. If you do not try at this stage in your in-vestment time line, you probably will never do it, and more importantly, you will never know whether you could have done it

Eugene Vollucci is one of the foremost authorities on real estate taxation and apartment investing and has authored four books in these fields. He is the Director of the Center for Real Estate Studies, a real estate research organization. To learn more about the Center for Real Estate Studies, p l e a s e v i s i t o u r w e b s i t e a t http://www.calstatecompanies.com

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The System of Money

Like I always say, very soon the middle class will vanish and you will either be rich or poor. And that is why you need to take control of your

personal life, finance, business and investment. Taking control of these areas of your life requires that you have the knowledge of money.

The first thing you need to understand about money is; what is money? As defined by Economists; money is anything that is accepted as a medium of exchange in a commodity market.

During the agrarian age, farm produce, fish and animals were accepted as medium of exchange. In the industrial age, gold, copper and steel, artistically carved into coins were accepted as a medium of exchange. When they were becoming too heavy to be carried around in bulk, banks notes were introduced. But in this information age, those who are still seeing money as coins and banknotes are probably left behind in the industrial age.

In this age, it is important that you understand the system of money because money flows through its own very system.

Everything around is a network of system. The sun knows when to rise and set. The moon knows when to light up the sky. The rain knows its season. And so does

the snow. These elements obey the network of system in the universe as designed by the creator—God.

The human body is a network of system. You do not need to press a button to jumpstart your nose, eyes, ears or mouth. There is no special button designed on your body to help you regulate your body temperature or your heartbeat. Your body is a network of respiratory, circulatory, nervous and what have you systems. And they drive the entire machine.

Your car is a network of system. When you turn the key in the ignition, it will send a message to the battery. The battery will send its own message to the engine and whatever happens in-between puts the car into motion.

Everything around you is a network of system and so is money. When you don't understand the system of money, you will be working hard to make ends meet. The system that multiplies money was designed and categorized into four platforms. The platform you choose to operate from will determine how successful you will become financially.

The first platform is the employees' platform. On this platform, you are just a tiny part of the entire

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system that generates money for the owner of the organization where you work. For example: if you are a manager in an organization, you and your entire team were employed to generate money for the owner[s] of the business and at the end of the month; you will receive your wages called salary. Operating on employees' platform, your employer controls the money you earn as well as your time. So your chances of becoming financially successful or rich to be precise are limited because your employer sets the amount of your earnings and controls your time.

Self employed platform. On this platform, you are just an advance employee who has total control of his time, decision and money making channel. Here you are the entire system of your own enterprise. If you are on vacation, your business is on vacation. If you are sick, your business is sick too. Whatever happens to you, affects your business too. How you manage your time, skills and experience will guarantee your income, but it is limited to how hard you can work to quickly turn over your working capital. Business owners platform is the third platform and the primary platform where the rich makes more money than they need or want. On this platform, you can be part of the system or be holidaying in the Caribbean while your entire employees are working tirelessly to make more money for you. Although it is not easy to build your business to this point, but if you

eventually do, then you will enjoy the unlimited chances of making more money than you need or want as long as your structured system is strong enough to do so.

Lastly, we have the investors' platform. This platform is not for the crowd, it is for the super rich. So if you eventually make it to this platform, then you are financially free. On this platform you don't need to work for one day except you enjoy working. Your money will be doing all the hard work for you. Although it is a very risky platform, but the money available at the corridor of this platform can make you richer than a third world country. For example: sometime, ago I visit the Bank of Industry and I was told about the Dangote Scheme for Entrepreneurs. The Scheme grants loans to entrepreneurs, with small interest rate, to acquire machinery for their small and medium scale businesses. It is a beautiful thing for Dangote to have such a Scheme that helps businesses grow, but it is a smart way of making his money work for him. Now that you understand the system of money, I believe you have also come to the awareness of the platform you are presently operating from and why you are struggling financially.

(From BusinessIQ Archive)

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3 Essential Tips To Growing Your MoneyThe desire of everyone is to become financially

free; to be able to afford all the good things of life. Apart from the air that we breathe, this quest

perhaps makes money one of the most important parts of our daily activities. Money solves majority of your daily problems, which include fueling your car, buying a healthy lunch, paying your water bill and much more. It is extremely difficult to separate money from human existence and comfort. But how you make, spend, save, invest your money will determine whether you will, someday, become financial free or not. And that is why it is important for you to expose yourself to the 3 essential tips needed to grow your money. These tips are as constant as Newton's third law of motion regardless of the fact that you are an employee, self employed, business owner or investor. Tip Number 1: Financial knowledge: knowledge in this context simply means to acquire the required information and skills about money through education and experience. Financial knowledge can also be the theoretical and practical understanding of the subject of money. It is simply to understand how money works in the world; how you can make, manage, save, spend and

invest it. The possession of this specialized knowledge and good understanding of money will help you make excellent decisions pertaining to certain financial areas of your life. This financial knowledge should not be short of understanding the difference between asset and liability, cash flow and capital gains, good debts and bad debts and making your own personal financial decisions. I must be honest to tell you that this required knowledge of money is not part of an MBA class or any university curriculum. I have seen countless of professors who are struggling financially. This knowledge is also not available to those who work in financial houses. Hundreds of thousands of bankers are living in bad debts and struggling financially too. But this knowledge you must seek from those who are financial successful because these people see money and how it works from a different point of view. Also this knowledge can be available to you in financial literacy books, seminars, conferences and workshops. I am not from the school of thought that you should read financial books equal to the number of your age or attend at least two seminars in a month; but I will advice that you identify those whose financial knowledge can be trusted and are living proof of

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what they talk about. Read their books and attend their seminars if ever they are giving any talk. Tip Number 2: Financial planning: once you have a good understanding of money and how it works, it is important that you have your own financial plan. The difference between the rich and the average is that the rich don't follow the crowd. They set the trends by making their own financial decisions because they have the knowledge of how money works. Once you have acquired the required knowledge of how money works, you will need to draw out your financial plan of how you intend to travel from where you are to where you want to be. Without a plan, it is extremely difficult to be financially comfortable. It is a decision you must make. Every single day, according to studies, an average human makes about 612 decisions. This equals to 4,284 decisions in a week and 222,768 in a year. Decisions will structure your life. You are where you are today because of the right decisions you have made and you are locked down in your present state because of the decisions you are yet to make or take. So decision making are perhaps the most important part of your life and that is why you need to consciously take most of them so you can see the desired result that you want to see in your life. When it comes to growing your money, your decisions are not going to be instantaneous and

unconscious; they must be conscious decisions. You must deliberately choose to take the necessary decisions that will point you in the direction of growing your money and that is why you must have a plan that you need to follow to achieve your financial goals.

Tip Number 3: Financial discipline: Discipline simply means to train someone or oneself to obey some certain rules or code of behavior. It is a systematic instruction designed to train someone or yourself. It could be a course of actions leading to a greater goal than an immediate satisfaction. We can conclude that a discipline person is someone who has set a greater goal for himself or herself, and such is willing to deny himself or herself immediate comfort in other to achieve the set goal. So it is when you have to grow your money, you must discipline yourself to adhere to the financial plan that you had created to take you from where you are to where you want to be. This might require that you deny yourself of some comfort and self gratification. Financial discipline requires that you work with a plan that helps you spend wisely, but save, invest and multiply your money. Once you can disciple yourself to do this, in no time you will grow your money.

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Money is an important part of the human existence and it cannot be separated from our daily activities. You need money for virtually

everything. This explains why employees and self employed wake up early and perhaps close late. They are interested in finding the best possible way to increase their daily or monthly earnings or income. But for you to increase your income, you need to have a clear understanding of the two types of income and which you must intensively focus your energy on. The two types of income are earned income and passive income.

Earned income is the money you earn from trading your time, talents, experiences and skills to accomplish a particular task for the betterment or growth of an organization. What an employee receives at the end of every month, although tagged salary or stipend, is called earned income. What a self employed make from selling his or her products or services, although called profit, is earned income. So it is for business owners who are making their earned income in large volume. Therefore, we can conclude that earned income is the money you get from trading your time and skills to accomplish a giving task in a particular organization.

Earned income, for an employee, is fixed and subject to increase base on the decision of the management of the organization where such an employee is trading his or her time and skills. However, such an employee can increase his or her earnings if such decides to trade his or her skills and time in another organization that is willing to pay better. For a self employed, earned income is subject to the number of products or services rendered to the customers. Such can increase his or her income if the numbers of patronizing customers increase. However, in

increasing your earned income, it will require that you

increase your skills, polish your talents and commit

more time to performing your task day in, day out.

The second type of income is called passive income.

Passive income is the income you receive on a regular

basis, which requires little effort to maintain it. Some

school of thought call this type of income “residual

income” and because of these words “passive and

residual,” quite a number of people do not pay

attention to this type of income. But the untold truth

that the rich wants to keep a secret is that they make

bulk of their earnings from passive income. If ever

you want to be financial free, you must create passive

income for yourself. Once you can tactically make

your passive income surpass your monthly expenses,

then you will become financial free. This is the major

type of income that the rich are interested in. And you

should too.

Passive income is the money you receive as royalties

from your intellectual property, which includes

writing a bestselling book, having a timeless music

album, producing a classic film and other inventions

that people can capitalize on. For example, the book

“Things Fall Apart” was written precisely fifty-four

years ago, but late Chinua Achebe was receiving

royalties from every copy sold anywhere in the world

and today his wards or managers of his estates are still

receiving royalties not only from Things Fall Apart,

but also from all his creative works. Passive income

also includes the earnings derived from rental

properties (real estate). For example, a landlord who

owns a rental property that he built some forty years

ago will be receiving annual rent from his tenants.

This passive income arguably also includes portfolio

income, which is known as dividends. One can also

receive passive income from a limited partnership in

which you do not play an active role in the day to day

running of the organization. Passive income can also

come from network marketing if you are at the top of

the pyramid.

The conclusion of the matter is; beside your earned

income that you are working tirelessly to earn, sit

down and creatively create for yourself passive

income, making sure you keep growing it until it

surpasses your monthly expenses. Then you will

become financially free.

How To Increase Your Income

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Capital Gain And Cash FlowIf you are a business owner or an employee who is

working hard to become financially free in the nearest

future; you have to create passive income for yourself.

When creating passive income for yourself either through

franchising, paper assets, real estate, MLM marketing or

intellectual property, you should focus your attention on

both capital gain and cash flow.

What is capital gain? It is a profit from the sale of property

or an investment. It is the difference between what you paid

for an investment and what is received when you sold that

same investment. It is the profit that you get from selling off

a capital asset such as stock, bond and real estate. The

amount you get from selling it must exceed the actual

amount you purchased it. Capital gain can be classified into

long or short terms depending on how long you hold the

investment before you sell it. If you hold it for more than a

year, your capital gain is long term; if less than a year, then

it is short term.

For example, if you buy a piece of land for as low as three

hundred thousand naira in a remote area, an area void of

industrialization or commercialization. If after seven years,

the piece of land increased in commercial value or

appreciates in value and you decided to sell it for a million

naira, you have gained a profit of seven hundred thousand

naira from selling your piece of land. This is definitely over

two hundred percent profit. This is a typical example of a

long term capital gain. If you decided to sell it within nine

months, it is referred to as short term capital gain. However,

like there are two sides to a coin, the other side of capital

gain is called capital loss.

Capital loss is making a loss from the sale of property or

investment due to bad financial decision or circumstances.

It is simply selling off a capital asset for a price lower than

how much it was purchased. For example, the last global

financial crisis that started in 2007, led some investors and

business owners to take some bad decisions which

eventually resulted in capital loss. Situation like this

requires that you possess the number one virtue of every

successful investor—patience. Also, it requires that your

source of income is not solely dependent on capital gains,

but also cash flow.

What is cash flow? It is the movement of money in and out

of a business, project or financial product. This is usually

measured within a specific period of time. Cash flow can

be referred to as the movement of cash in and out of a firm

in the form of payments to suppliers and collections from

customers. It usually arises from three sources, which

include operations, investing and financing.

So, when it comes to becoming financially free or rich in

the future, your focus should be on both cash flow and

capital gain. But you must know how to use both to your

advantage. Cash flow must be your major source of income

while capital gain must be utilize when you foresee that an

investment might go sour in the nearest future. To know

when an investment will go sour or turn out to be bad and

that the only option is to sell it off requires that you have

investment skills, which is one of the three skills that every

successful and rich person must possess.

(From BusinessIQ Archive)


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