The first lesson relates to how you manage your own finances. This lesson is the basis of all the other actions. Bringing in extra money alone is no cure for financial difficulties. It is really just a sticking plaster. You have to deal with the root cause. For example for Joan the root course is lack of proper education, she left a high school when she was 16, she is 23 now and still doesn’t have a high school diploma. It limits her earning potential tremendously. Luckily for Joan there are opportunities do correct this mistake, she can take a GED test and then she will receive a GED certificate. This certificate is the equivalent of high school diploma. This is a first step she needs to fix it in order to have a better future, with the GED she will make at least $9 000 more per year
Getting GED is not a lengthy process, it might take Joan 2-4 months to get ready if she will follow intensive online classes for the GED. But what do you do in between. Play on the lottery?
There is a reason why you never see wealthy people as lottery winners. Quite simply they never play the lottery. Their mindset would be to take that £1 you put on the lottery and put it in the bank. Assume you pay the lottery twice a week that would be $2 a week or $104 a year. Now how many people who play the lottery receive a guaranteed $104 plus interest a year? Add to that the fact that 95% of all lottery winners are back at the level of income they had before winning, this shows more money alone is not the long term solution. It’s what you do with your extra money that counts.
So the first of the cures to your poor finances is to improve your bank balance. Then you can then find ways to make extra money. The easiest way to do this is the 10% solution. Aim to spend just £1 ($1) less for every 10 you spend in a day. What this means is when you think about buying something ask two questions:
- Do I really NEED this?
- Can I buy the same thing 1 brand lower?
In one month of following this approach I saved $150 and my wife and I noticed no difference in lifestyle. All wealthy people have followed this path. To gain long term extra income you must first be able to invest. That means paying yourself first.
The last part of the process requires discipline, take the amount you save and put it into a cash based savings account. When you get used to this lower level of expenditure set up a regular payment to your savings account from your bank.