Say you're in Kansas and you want to see
the Pacific Ocean. You pack your bags, gas
up the car, and grab your morning cup of
coffee at the drive-thru. Moments later
you're on the interstate, breezing along with
the day's first rays of sunshine in your eyes.
Sunshine in your eyes? Wait a minute—
that's not right! A quick glance at the map
confirms your suspicions. You re heading
east, toward the sunrise. To get to the
Pacific you will need to turn around. And
the sooner you do it, the better.
That's how it is with our finances. We may
have a goal on the horizon, but if we're not
headed in the right direction, we'll never get
there. And if we don't change our course,
we're apt to wind up someplace where we
never wanted to go.
Changing your financial direction is a four-
step process: You need to spend less than
you earn, avoid debt, build liquidity, and set
long-term goals . To omit even one of these
steps is to miss the mark—you might make
it to Las Vegas, so to speak, but you'll
never get through California to see the
ocean.
Spend less than you earn
Most of the people who rely on our firm for
financial and investment counsel genuinely
want to handle their resources wisely.
Many of them, however, make the very
same mistake most Americans make—and
it's the biggest obstacle there is to financial
freedom. It's a consumptive lifestyle. By
consumptive, I mean a lifestyle in which we
spend more than we can afford to—or more
than we should, given our goals and
priorities. It's not what you choose to
spend your money on, it's how much you
spend.
Why is overspending such a significant
problem? Simply put, it's because we have
limited resources to use on unlimited
alternatives, and living within our income
means that tough choices must be made.
We think in terms of what we could do or
buy with 100 percent of our income—but
after taxes, giving, debt repayment, and
savings are taken out, we really have only
about 45 to 60 percent left to..... http://feelgoodstuffs..com/2014/07/changing-your-financial-direction.html?m=1