In every household and business the main key to finances is cash flow. The difference between feeling financially free and financially stuck all comes down to that one thing, cash flow. But here’s the problem. How do you manage your cash flow to amplify the feeling of financial freedom?
We have cash flow and then we make decisions to save our money. But we save it in places that literally stops the flow of money. We put it in retirement accounts, we put it in home equity. We pay off debts sooner. We put money in 529 plans. We pay cash for major capital purchases. All of these things stop the flow of money. More importantly, it stops the flow of money towards us and starts the flow of money away from us.
Now, it’s not enough just to have cash flow. We have cash flowing in every month from either income or our business. But how do we use that money once it’s in our control to move us forward financially so we could achieve our financial goals without giving up control of that money? And again, keeping in mind that we want the money to flow, but it should be preferably flowing towards us, not away from us.
The next question becomes, “how do I use my money to achieve my financial goals, like sending my kids to college or expanding my business, or buying a new car without stopping the flow of money?” Well, it’s real simple when you look at the choices, you have to save your money.
Are those choices stopping the flow of money or are they allowing your money to continuously flow towards you? Whenever we’re looking at a financial situation we’re looking at those decisions from an aspect of control. Is this decision going to leave me in more control of my money or less control of my money?
There’s an old adage in the accounting industry and it goes like this:
“Follow the flow of money.”
Wherever money stops. That’s where you have an opportunity to make that money flow towards you.
You see, conventional wisdom teaches us to give our money away. It’s by design. Pay off your mortgage as soon as possible. Get rid of all this debt. But what these decisions are doing is leaving us out of control of our cash flow and we’re unable to get our hands on money when we really need it.
We’ve been trained to do things with our money that we would never do with the things that our money buys. We would never buy a loaf of bread and put it away for 40 years and not eat it. Yet, that’s what we’re trained to do with our money when we put it in a retirement account. Same thing with home equity. We would never buy something and forget about it for 30 years, but that’s what we do when we put extra money on our mortgage. We’re literally saying, Hey, I’m going to put this money in the house. It’s not going to earn any interest. The dollars I take out in the future are going to have less buying power than the dollars I put in. We would never do that with the things that money buys, but that’s what we’re doing with our money.
Now, we’re not saying you shouldn’t save for retirement or you should be in debt with your mortgage. But what we’re saying is you should save your money in a place where you have complete liquidity use and control so you can access that money to achieve your goals along the way. Without asking permission and without subjecting yourself to penalties and fees.
This is not a new revelation. We are following the rules of nature. In nature, things have to flow. Water has to flow. You would never want to drink stagnant water. And it’s the same thing with our money. We need to keep our money flowing and preferably flowing towards us. The problem we see too often is that money is flowing. It’s just not flowing towards you. It’s flowing away from you.
If you’d like to get started with our process using specially designed whole life insurance policies to regain control of your money and finally experience more of that financial freedom we’re all looking for. Be sure to visit our website at Tier1Capital.com.
Feel free to schedule your free strategy session or check out our free financial planning webinar, The Four Steps to Financial Freedom to see exactly how we put this process to work for our clients.
And remember, it’s not how much money you make, it’s how much money you keep that really matters.
