Wednesday, January 20, 2010

The Wisdom of Will Smith

Friday, January 8, 2010

The Purpose of Money

By Richard Roop

Attracting more money into your life is easy when it's purpose driven. Why work at making more money unless you know exactly what you'll do with it?

Making money is always a trade off because it takes your time and attention away from other things that are important to you. That's fine if the extra money helps you pursue and achieve your highest priorities.

So the first question is "What are you going to do with more money?"

The clearer you are on this, the easier it is to attract all the money you want or need.

1) The purpose of money is... to do what you want

Do you need more time freedom? What are you going to do with more time? You can always get more money -- but no one gets more than 24 hours in a day.

More money gives you new choices how you spend your time.

If money was no object, how would you spend your week or your month? What does your perfect day look like? These are questions that only you can answer.

If you could do anything you wanted, what would you do? Sometimes you need more free time to do what you want. Sometimes you need more money to free up that time.

2) The purpose of money is ... to free up your time

You could make your own clothes, build your own house or grow your food. But that would take a lot of your time.

Instead, most of us invest our time making money so we can simply buy what we want.

For example, entrepreneurs invest marketing dollars to attract new customers. Knocking on a hundred doors or calling a hundred numbers takes more time than buying an ad read by thousands of people.

Spending money on systems, investing in tools or hiring help frees up your time. I don't want to do my taxes, but I want them done. I don't want to take all my calls, but I want them answered. If I ever decided to cut my own lawn, I want a riding mower -- turbo-charged.

3) The purpose of money is... to have what you want

What do you want to have or own?

Everyone needs a home. Do you need a better home? Would you like to live in a better neighborhood? Would you like to live closer to where you work or play? Wouldn't anyone want a home that allows you to live with more comfort and convenience?

Everyone needs to get around. You can save money traveling across the country by bus to visit friends and family. Or you can save time flying in style -- if you have the money.

Even though it's encouraged by our society, the habit of buying what we want without having the money first puts our freedom at risk. The danger here (which far too many people have experienced) is becoming enslaved by debt.

The smartest use of borrowing is to invest in services, people or things that generate more income and profits. Borrowed funds can also be used to save you time, allowing you to then reinvest that time making money -- more than you originally borrowed.

Consumer debt comes from using credit to buy things you do not need. Or from borrowing money without a profitable payoff. Debt can be used to consume or to produce. Avoid consumer debt. If you're carrying any of it now, set a goal and make a plan to rid yourself of it -- as quickly as possible.

Do you want a new computer? I use computers for both business and entertainment. Use your money to buy anything you want -- but you don't need a computer to play. So don't buy one just for fun until you have extra money not earmarked for something more important.

On the other hand, I need a computer for making my business more efficient and profitable. It's a great tool for increasing productivity and saving time. I'll pay extra for a top-notch operating system, high-speed internet connection and the best software. I can even justify borrowing the money to buy it since it's an investment.

4) The purpose of money is... to be spent

Saving for a rainy day is good. Putting money aside for taking a family vacation is fine. But what good would $10 million in the bank be if you were not allowed to spend it?

Money can do a lot of positive things when used wisely. It can cloth the poor and feed the hungry. You could volunteer your time teaching life enhancing skills if you didn't spend all your waking hours chasing after more money.

Accumulating money is fine -- as long as you plan to spend it at some point.

Giving is great and just another type of spending. Money should flow. It does no good unless used. So use it to take care of yourself, and your loved ones. Avoid being a burden to society first. Then become a pillar of society.

5) The purpose of money is... to live your preferred lifestyle

Money allows you to pay off consumer debt, invest in a business or quit a dead-end job. It allows you to spend your time doing whatever you want. It allows you to give back or make a difference. What you want is totally up to you.

And it's not money you want. It's what it can do for you.

So know what you want. Blueprint your ideal life. Everyone deserves more then they settle for. Dream bigger -- and use your time and energy pursuing those dreams.

What would your life be like if "money was no object"? What would you become?
What would you have? What would you do each day?

Answering these reflective questions is a key step to living out your dreams.

Don't be concerned with the "how" yet. Start with the "what" and the "how" will reveal it itself. Collecting $50,000 in cash in 90 days is real specific. That's an outcome. How you achieve it is more flexible because there are an infinite number of ways to do it.

6) How to Make MORE Money

Most people are employed to do work. They make a living by earning a wage, providing service to a company. They trade their time for a steady paycheck. The way to make more money at a job is to work more hours or increase your hourly pay.

Professionals make money offering needed products and services. They make more by selling and delivering more. They can also earn more by reducing costs or charging higher prices.

Entrepreneurs promote a business of their own. The purpose of any business is to generate profits through the sale of goods or services. The more value a business can provide to the marketplace, the more profits it can produce for its owners.

The entrepreneur is the leader of the company but also performs all the work not handled by systems, staff and contractors. Entrepreneurs can make more money by hiring additional help, increasing their promotional activities and automating as much of the operation as possible.

They can also make more by offering products and services with higher profit margins.

Investors or speculators make money getting a return on their capital. They invest money to own assets which appreciate in value or produce income. Money can be made from the equity in a business, real property or various commodities.

"Real estate entrepreneurs" make money operating a business that involves buying, selling and financing real estate. They earn money solving problems for buyers, sellers, tenants and investors. And there's plenty of demand for this type of help with today's economic climate and continuing credit crisis.

Real estate entrepreneurs can make more money today cherry picking only the very best deals and avoiding unnecessary risks. They don't invest capital for a return on investment. Instead they leverage themselves investing in marketing, tools, people and systems that help grow the business and increase the income.