Be The Maestro To The 2 Parts of Your Money

Some people are maestros at cash flow. Some are maestros at building wealth (net worth). The optimal are people who have mastered both. Let’s break down what each of these are:

Cash Flow: The direction of their cash. How much is coming in (i.e. take-home pay). How much is going out (bills and ‘fun stuff’).

Wealth: Their appreciating assets. Their home and their investments minus their mortgage and other debts. Wealth doesn’t mean a certain dollar amount. It simply means the appreciating assets they have accrued that are in excess of their debts, starting with that first unspent dollar.

One without the other doesn’t gain any traction, and, if anything, can end in financial disaster. Bankruptcy or living month to month are 2 examples of this.

OK, so where does a person start? By spending less than they earn. Likely not a surprise to anyone reading this. This can only be accomplished by mastering cash flow. However, mastering cash flow eludes many people. To them it’s a mystery. They look at their spending, but are baffled by how it ‘works’. They are baffled by ‘where it all goes’. They see the trees, but they don’t see the forest. It all looks random and disjointed to them.

So, where to start if cash flow hasn’t been mastered? By every single day writing down every single thing they spend money on. Yes. Every. Single. Thing. Every. Day. There is no shortcut to this. Leaving it up to a budgeting app that is looked at only once in a while does not get a person connected to their money. It only keeps money a mystery. This can be something that takes a while to help a person get connected to their money. Some people who struggle with cash flow will need to do it for the rest of their lives. However long it takes to get them to connect the dots so they become the maestro of their cash flow, and not before then.

But that’s just the start, because then a person also needs to master building wealth. Again, wealth is simply having $1 that is not being spent. It means accruing assets, starting with that first $1. Once that $1 is not spent, they need to learn to make it grow. Because keeping everything in cash is it’s own risk (because of inflation). Sometimes people who have mastered cash flow are overwhelmed or intimidated by building wealth. ‘Investing’ seems like a mystery to them. They are unable to distinguish between gambling and investing, so they don’t put their cash to work. They keep it in savings accounts or ‘stable’ funds. But just like how cash flow needs to be mastered, putting cash to work also needs to be mastered. Otherwise, they are climbing a sand dune: 1 step after another, but sliding back down after each step. So, where to start if wealth building hasn’t been mastered? By reading (shameless plug) the 4 cornerstones of financial literacy.

To some people, becoming a maestro to both comes easy. It’s intuitive to them. But to many more people it is hard work. For them it is learning a new skill. It is having a different relationship to money. And while there aren’t any shortcuts to either, becoming a maestro to both has been done by many, many people of different backgrounds and varying education levels. It doesn’t take ‘smarts’. It takes patience with oneself, it takes discipline, and it takes keeping the eyes on the bigger prize: Financial Freedom.

Are you ready to take the next step? Schedule a Discovery Meeting to get started.