7 Guiding Principles for Financial Prosperity - Part IIContinued from part I of this article... 4. Make a very clear distinction between what is an expense and what is an investment. It can be much easier to chalk everything up to an expense or cost, but it is not wise. A good rule to follow is a cost is money that is lost and an investment is something that you should desire. This rule should bring you much more money. The only questions you should ask about an investment are whether or not you can afford it right now, how much money will you get back, and how fast you will get your money. Then you can make the decision if all of those are acceptable. If you find that anything is not acceptable then by all means don’t take the investment. 5. Keep your expenses low. This may sound like a no brainer, but the truth is many business owners don’t keep as tight control on their expenses as they should. They should be as low as you can possibly get them. Don’t let the amount of money you have accumulated influence this rule. It does not matter how much money you have. Expenses are something to avoid not accumulate. 6. Stay away from loans. Never borrow if you don’t know that you can pay it back. Don’t buy anything based on future money that you haven’t earned yet or haven’t been paid yet. - One good example of this is if I see that money is on its way into my account and I must use that money now, I can borrow it. But if I believe I will sell a thousand books next week, I cannot borrow. It is the same advice you have heard your whole life, don’t spend more than you have. If you have not earned the money yet, then you don’t actually have it yet. 7. You must earn more than you spend. If this is not the case then you will have to find a way to spend less money. You must always be in the black. Figure out your expenses first and let that determine how much money you will need to earn. It is always good to have an earning goal in mind at the beginning of your venture. If you believe that you should trade in your car every six months because you need to drive something new then you will likely find that you don’t have any car in a relatively short period of time. People who do this are never going to be satisfied with anything they acquire in their life. They will always want the latest and greatest. It is the road to financial ruin. It isn’t necessary for me to spend a great deal of time giving long-winded advice on the benefit of saving your money. Just try even one of these principles and when you are going to do something with you money take the time to think it over. It doesn’t matter if you are talking about thousands or millions or even a few dollars. Just think it over and you will find that the pennies will add up to the dollars.
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