Friday, August 4, 2017

LBI—Living Below your Income,



This is the last set and the most appropriate. They live within a strict budget, the people under this category have a firm financially disciplined life style. They have an organized finances and they have proposed and are building up savings by keeping an amount consistently on a monthly or daily basis. They even have wise investment making extra income on the side line and, this is a sure way to being wealthy.


Wealth is built through a disciplined life style and put into consideration what we discussed in our last post, I must emphasize that it will not be an easy ride but with consistency, it will become more of a habit as a way of life. For so many people the major problem is learning to say ‘NO’ and this is key to Living Below your Income, most people I have discussed with say the same thing they cannot turn people down, and what I say is do not turn them down but work with a balanced and tested budget as some budgets are not workable. Have in your budget a line for Charity and allocate some funds to it and never spend beyond it in a month and in case you have to go beyond it (in extreme cases) you are having it as an advance from the next month’s quota for Charity (we will discuss budgeting soon).
The main thing is you must be determined and resolute about becoming and LBI when it comes to finances because it feels really great to have financial freedom. Being an LBI does not necessarily say you are without loans and mortgages, but it says you are comfortable paying your bills and also saving up, it is possible and it all starts with a deep determination and resolution too with once self to begin and the inner strength to kick it off. Its benefits outweighs whatever negativity you might think it as, which is people will say blah blah forgetting the fact that when you are borrowing around and living in financial embarrassment they will talk, so whatever happens they must talk why not allow them talk and you live a good financially free life and see your friends take a cue from you as in my case.

Below are great LBI tips:
Get angry with your present financial state.
Write out your financial goals with time line
Never spend more than you earn. Make and work with a budget.
Do clear out all your small and short debts first before starting savings.
Do not make any financial leap be it getting a loan, doing an Investment, getting a credit card, mortgages etc. without first researching about it, always ask questions before any financial decision is made, it is a sign of strength and not weakness. Get independent advice also, most of the time we ask marketers question and we want honest answers from people that are driven by a target.
Taking out insurance is key to transferring financial risk (we will discuss more on Insurance latter)
Should you be in debt get free advice, do not say they are not available to search and you will get.
Open a savings account for the purpose of Savings and do not get a debit card, Mobile or internet banking as this are sure ways of ‘borrowing’ from the account, if possible do not have the bank branch close to you. 
Initiate a sweep service or a direct debit to always credit the account on pay day.

Let us calculate our financial net worth as of now, this is not the final destination I must stress but it will help us know where we are and where we love to be, if it looks so fantastic do not be too excited some people younger have more than we do so it should gear us up to work more to get to our financial destination, which is our financial goals.

Add up your Assets. Typical Assets include:
Your home (The house you built or bought not rented apartment)
Your Pension contributions (we will also discuss pension in details soon)
Salaries and wages due but not have being paid
Your Savings accounts
Your Investments (Houses you gave out as rents, fixed deposits, bonds etc.)
Any other high-value private possessions (land, gold, cars use depreciated value etc.)
Deduct any debts (Liabilities)
Your Mortgages
Your Loans (Personal)
Bank overdrafts
Due payables (Due rents, due school fee, staff payments owed etc.)

Whatever you get will give you a rough estimate of your net worth.
In simple terms Assets-Debts=Net worth






You can join me in this #personalfinance campaign by sharing this blog with your friends and all that you know. You are also free to ask your questions and you can respond also to other peoples questions and thoughts we are here to rub intellectual minds together. We will start our series on the budget in our next posting.

No comments:

Post a Comment