Are You a Business?

The truth is, you are constantly selling yourself to other people whether you like it or not.  You are constantly running a business whether you like it or not.  At the end of the month, you have either sold yourself well and brought in a good revenue stream or you have not sold yourself well and have little to show for your efforts.

Your revenue is either greater than your expenses, meaning that your run a profitable business or you are spending more than you make and you are running your business into the ground.

The question becomes, do you sell yourself in a way that generates the highest revenue?  I think most of us can answer "No" to that question, since morals, ethics and values also come into play.

The next question becomes, which style of business do you run?  Are you an employee, relying on others to handle all aspects of your life?  Are you self employed, meaning that you are quite independent but are not leveraging your time and money to accomplish more?  Or are you a business owner and investor with a system in place to leverage the resources at your disposal.

Listen to how Robert Kiyosaki describes the cash flow quadrant in the traditional sense of the word business.



This post was reposted from http://finlit.biz/business/are-you-a-business/, originally written on January 2013.

How Did Mr. Money Mustache Do It?

You need to check this out! Mr. Money Mustache, aka MMM, shows on www.mrmoneymustache.com how you can go from spending 43 years working to retiring in 7.5 years. Don't most people want to retire?

Mr. Money Mustache showed how typical after tax salaries of 140K are spent. People who save 15.16% spend 43 years working until they can retire. However, Mr. Money Mustache managed to save a whopping 103K or 74.07% of income and retire in 7.5 years!

All it took was a little budgeting and modifying one thing: spending habit. This translates into my world as percentage saved each month (see sizusfinlit.blogspot.com). Would you be willing to spend a few hours each month if it meant you could save 36 years of work?

Do you think Mr. Money Mustache is extreme or do you think society has gotten extreme? I can't do this alone. I need your help. What other cool things can you find on Mr. Money Mustache's website? Any good tips or thoughts?

This post was reposted from http://finlit.biz/retirement-2/how-did-mr-money-mustache-do-it/, originally written on January 22nd, 2013.

Is the Chinese Way of Spending Better than the American Way?

I recently read an article from www.wisebread.com which inspired me to think about the differences between how Americans and the Chinese spend money. It was great to see that not every culture spends like we do in America, especially, since Americans live in a debt epidemic.

Has the United States gone too far with its 12 trillion in debt and 150 trillion in future debts? What about the fact that our gross domestic product is only about 10 trillion dollars? This means, as a nation, we are over a year's salary in debt since we take home about 2 trillion dollars. How would an individual's personal finances look, if they mirrored that of our nation? In other words, what is a good ratio for personal debt to earnings and should our nation be required to satisfy the same guidelines?

On a post from www.easeconomics.com, the author states that a person with 20% debt and 80% cash is highly leveraged. People should treat their personal finances as if they were a business. This involves looking at financial metrics such as debt to income ratio. By the way, most loans would not even be considered if the DTI was above 50% (see blogs.cfed.org).

On the other hand, our government runs on a 120% DTI.  Is this good?  Is this fair?  What would Warren Buffet think?

This post was reposted from http://finlit.biz/debt/is-the-chinese-way-of-spending-better-than-the-american-way/, originally written on January 20th, 2013.