Your Compass In The Fog Of Overwhelm

Nicola here from The Money Gym,writing to you on 1st January 2010 with my third very important message….

Think about this for a second………..

In the olden days, humans were able to find their way around the globe, in any kind of weather, even if the fog was so bad they were unable to see a few feet in front of themselves….

How did they do that?

http://www.TheMoneyGym.com/silverelite

They were able to find their way forward because they had some deceptively simple tools…

Tools that were simple to use but were so sophisticated that they delivered exceptional results every time…results you could depend on…

Those tools were….

The Stars and a Compass.

Yep, that’s pretty much all they used to sail ships across the vast oceans, to go somewhere so far away it literally took months, if not years to get there and then to come safely home again.

Would it surprise you to discover that there are some deceptively simple tools you can use too, to navigate your way through all the financial confusion you might be experiencing right now?

Well, no!  I’m not going to tell you about those tools, I’m going to show you….how to create and use them yourself.

http://www.TheMoneyGym.com/silverelite
Warm regards

Nicola, Judith & The Money Gym Team

P.S.      Watch our brand new video to discover some of the simple but effective tools we use to navigate our way around our financial world!

http://www.TheMoneyGym.com/silverelite

Struggling Financially? Blame The Fog!

Nicola Cairncross from The Money Gym here, and I’m writing to you today, on 29th December 2009 in the middle of the worst credit crunch anyone can remember.

Can you remember more difficult financial times?

I certainly can’t.  We never imagined it could get this bad, did we?

All around the world people are worried for their jobs, businesses are going down and banks, while taking money from their governments certainly are NOT lending it out again to consumers.

Even if you pay off your credit cards, the companies are taking your available balances right down or even taking them away and don’t even get me started on the interest rates they’re charging!

People are so confused……….so worried………so stressed about money……….they have NO IDEA what to do, which way to turn…………they are stumbling along in the dark, in the fog, they feel overwhelmed and incapable of taking action..

Even if they knew what action to take!

BUT !!

Would it surprise you to know that there are people out there who are not only NOT hurting, who are not confused, or overwhelmed…….. but who are actually thriving financially?

People who are making more money than ever before, who are starting successful businesses, who are getting online, who are creating multiple streams of income, who have control of their cash, people who know on a week by week basis, what’s coming in and going out, and WHAT TO DO with what’s left over?

People who are not phased by changes in the economy, who just switch their strategy to one that suits the times and just works better?

People who have a whole TOOLKIT of financial strategies to fit the moment, the situation, the need.

Who are these people?

Financially Intelligent People, that’s who!  You could call them FIPS for short!

Now, I just bet FIRSTNAME that you would love to find them, join them and become a Financially Intelligent Person – who wouldn’t?

Well, now you can…..

Because we have created a brand new video that can get you started down the road to becoming one of the Financially Intelligent People – right now.

Come on over, watch this exclusive new video and get some FIP savvy!

http://www.TheMoneyGym.com/silverelite/

Warm regards

Nicola, Judith & The Money Gym Team

P.S.      Watch our video to find out how to beat the credit crunch, throw off that overwhelm and become one of the Financially Intelligent People today!

http://www.TheMoneyGym.com/silverelite/

Shocking Truth About Judith’s Money | What Will Be YOUR “Return On Investment”?

Judith Morgan says: Nicola’s always asking me “Why won’t our clients tell us PRECISELY how much more money they have made by being in The Money Gym?”

I don’t know is the short answer!   What I do know is that in the UK we don’t like talking about money whether it’s because we’ve made less than we would like (and don’t want to share that) OR the more likely Money Gym scenario which is that we’ve made more than we think our friends and family would like (and we don’t want them to know or to show them up).

Many’s the time when we have been contacted by a particularly successful client and asked to TAKE DOWN a testimonial, because they are getting divorced, have just met someone new, don’t want to be stalked, are worried about burglars, don’t want the tax man to have any inkling….many, many differnent reasons.

This, of course, makes our Money Gym marketing very difficult, particularly for the Gold and Boardroom coaching programmes and it makes it hard to give people specific examples when they ask that age old question “How quickly will I get a return on my investment and how much will that be?”

Read more..

Financial Success | Run Your Money Like A Business

Here’s a quick money / personal finance success tip I was asked to write for a journalist, then they pulled the feature so I though I would share it here!

If you want to be more financially secure, or even become financially free, you could learn a lot about running your money from the model that a successful business would use.  If your name is Gemma Jones, think of your financial world as Gemma Jones Inc.

A successful business plans out how much money they expect to have coming in for the next year (turnover), then they work out what it’s going to cost to earn that money (cost of sale) then what it costs to run the business (overheads) and what is left is profit.

They pay tax on the profit ** then put part of that profit aside to cushion their cashflow for the forthcoming year and re-invest in the business to grow it, then the owners/shareholders draw out what is left to spend as they wish.

You are the sole shareholder in Gemma Jones Inc, unless you are working as a couple then you are Mr & Mrs Jones Inc, with a 50% shareholding each and equal voting rights on what happens with your joint money.  (If not, why not?  This is a whole other article!)

The business constantly looks for new opportunities to make more money and they are careful about what they spend, looking for the “return on investment” and how long that will take.

You can probably already spot some significant differences between how a successful business runs its money and what you do with yours – and those differences are what is making the difference to your financial success!

Taking that model and applying it to your finances, you can work out what you expect to earn this coming year (I suggest you look at your net earnings or what goes into your bank), what the costs of earning that money are (travel, clothes, lunches, etc) and then what the overheads of running Gemma Jones Inc are (rent, food, bills etc).

What is left is the profit the place most people fall down financially – they are simply not making enough profit!

Once they have paid the costs of going to work, running the house, then paying for all the bits and pieces that they think they need to be happy, there is just no money left for the important stuff.  And this is where most people go wrong , because they are not taught to run their money like a business.

I know, because I ran my money like that for about 40 years of my life too.   Even now, I know many business people who don’t run their personal money in the same way they run their business money.  You know who you are, Money Gym Club Members!

If you ARE making a profit after paying for your day to day life, then ideally some should be put towards cushioning your cashflow against potential changes in the market next year (savings) and some should reinvested in growing the business (you!) and creating new income flows.   Learning new skills, investing in property, starting a part-time business on the side of your day job.

Before you take any personal drawings, to have fun with, as a shareholder in your business.  For example, refurbishing the office (your house), or taking the staff (you) on holiday.

Like any business, you should always be looking out for opportunities to increase cashflow and profits, because those extra earnings can be put towards buying, what we in The Money Gym call “income producing assets”.  Similarly, you should always be looking for ways to cut overhead, without affecting quality and almost as important, quality of life.

Because you are your business, and you are your main asset.  You need looking after.

The more of those income producing assets you can invest in and accumulate, the quicker you can become financially free, as the income from your assets outstrips what you need to live on.

And that’s the day you never have to work again, if you don’t want to.

Because you are financially free.

Financial Freedom | John’s Burning Question

Hi Nicola

Here’s my burning question…..I am a man. 50 years old. Anyway, I would like to ask for your advice regarding my route to the wealth highway.

My financial position is thus. Home owner with no mortgage. Our home is worth around £155,000 in today’s market. My wife owns a 1 bedroom house with her sister a 50/50 share mortgage  around £70,000 and valued at say £90,000. The property is let and only just pays for itself.

My wife and I both work with approx take home pay per month of £2250. I require around £100 a week to live on and my wife requires all of her income to live, so I can save around £750 per month.

I have a credit card of around £2000, savings of £3000 and my wife has a loan of £3000. I hate my job and would love to be free of it.

My interest is web design and am becoming quite good. Hopefully this is where I can shine but I need more free time for this to happen. I am knackered at the end of the day.

I realise that my wife and I are in a good position regarding our own home and we could maybe do something with the equity, I don’t know.

What would you do, Nicola?

Hi there John…congratulations on being our first “Ask Nicola” burning questioner! And what a lovely one to start with……the quick answer is that you are financially free already, you just don’t know it!

I’m going to mainly deal with your own situation here as your wife and you seem to keep your finances quite seperate…is that right?  Do come back to me if you wanted a response bases on your joint finances….

You say that you would like to do more web design, and with some good marketing online, and networking locally, and I know that you could make a very good living at this.  Local business people are AT LAST waking up to the power of the web in generating leads for their business, and how efficient and cheap that can be compared with the traditional methods, like advertising.  They are happy to pay £500 – £1000 for a blog type site (great for SEO), and around £2000 – £3000 for a blog type site, with ecommerce / mailiing list capabilities.

You could educate yourself about internet marketing, including traffic generation, social networking and web 2.0, as well as web design (our about to be relaunched Internet Marketing Home Study System will soon be available via our very affordable Silver membership) and then you would REALLY be in demand.  I would envisage that, within a year, you would be outsourcing most of the work!

However, the issue seems to be time and energy, as your day job takes both.  Have you considered taking some of the equity in your house, and investing it in your new business, using it to

a) pay yourself a salary of £500 a month (£100 per week x 52 divided by 12)

b) pay for some teaching to bring your internet marketing / seo skills up to scratch – Silver would cover that

c) pay for a year’s worth of mentoring – our Money Gym Gold programme would be ideal for this and I would suggest you have a look at our coaches, and see which one you think would best be able to hold your hand through the year, to set up and build your business.

I would think pulling out £20,000 would not only cover the expenses as above, but also pay the payments on the money you would be borrowing so your outgoings would not go up at all.  If you apply before you hand your notice in, you should have no trouble getting a mortgage of 12% loan to value.

Your other alternative – if you don’t want to use your equity, is to use your £750 a month savings, to build a “Freedom Fund” to cover your first year in business, and in Money Gym Silver membership, we give you a blueprint on how to do that, step by step.

HOWEVER, if I were you, I would be pulling out all the equity available, and as well as investing in my new business, as above, I would be buying as many one bedroom buy to let flats (existing housing stock NOT new builds) as humanly possible.

This would ensure that you never had to work again, if you didn’t want to!  You could keep leveraging the growth in your property portfolio, again and again, tax free, to grow your portfolio further and to live off.

Again, this is something our experienced property investing Money Gym coaches could hold your hand through, via the Money Gym Gold programme as they are all very sound on this topic!!

Now, you know what you can do (and what I would do) the only question is “what’s going to stop you doing it?”

Keep in touch John and let me know how you get on?

Warm regards

Nicola

Find Your Finance Cornerstone

(This article is reproduced with kind permission of Mike Southon, international business speaker, weekly columnist for the Financial Times, entrepreneur mentor and co-author with Chris West of “The Beermat Entrepreneur” series of books).

Mike Southon says:  This is my column that will feature in Saturday’s Financial Times, which can be found in the entrepreneurship pages of the Money section. You can also find my columns on the FT web site here )

One of the symptoms of a credit crunch moving seamlessly into a recession is the unfortunate chore of the entrepreneur spending more time with their bank manager.

This might well be to obtain more credit to cope with a short-term cash-flow problem, or to explain the restructuring required to take best advantage of unpredictable market conditions. Whatever the desired outcome, this is unlikely to be a meeting which either party regards with keen anticipation.

The challenge is that the entrepreneur and the bank manager speak two completely different languages. The entrepreneur likes to talk about new ideas and opportunities, about changing the world and making a difference and being recognised in the street. The bank manager is probably under strict instructions from above to reduce the risk in their portfolio of accounts, and can only express this in the language of the spreadsheet and the bottom line.

Meetings between entrepreneurs and banks managers can be tense and sometimes even characterised by strong language. Many years ago in my first start-up our CEO went to open a bank account. He was back very quickly and in a bad mood, so we realised the meeting had not gone well.

In his view, the bank manager was an idiot; he had not understood how clever our CEO was, how we clearly had an unbeatable business proposition and how much money we all were all going to make, including the bank.

Our CEO was ultimately right about this. We did indeed sell the company for a lot of money only five years later. But back on day one we had a small problem; we did not even have a bank account yet.

Understanding finance is one of the toughest challenges for an entrepreneur, especially if they come from a sales or technical background. It is a very large topic with constantly changing rules, and it was a real challenge for Chris West to summarise this into simple terms in Finance on a Beermat.

West worked with finance experts Stephen King and Jeff Macklin, and while there are indeed chapters on double-entry bookkeeping and tax, the book starts with simple and straightforward advice: before you do anything, you should find yourself a Finance Cornerstone.

This is very unlikely to be a full-time employee from day one; most people have a ‘virtual’ Finance Cornerstone, someone who comes perhaps one day a month and puts some order to your receipts and invoices in preparation for submitting your accounts.

But we make an important distinction between an accountant and a Finance Cornerstone.

An accountant is essentially reactive; they will do your books and then tell you that you have gone broke. A Finance Cornerstone is pro-active; they tell you in advance that unless you do certain things, you will go broke at some time in the future.

Even if they only come in one day a month, they understand your business and can advise on how to scale up your business when times are good, and how to scale down your business when they are not.

Most importantly, they speak the language of the bank manager, and should always accompany you to any such meetings. The entrepreneur should make some introductory remarks, and then leave the running of the meeting to the Finance Cornerstone. In particular, any promises made about the provision of security or repayment of loans should be made by someone who not only understands the mindset of the bank manager, but who is also more likely to be trusted to keep those promises.

And if circumstances change and repayment terms need to be negotiated, this is best done by a professional, who will present a case that is based on facts rather than emotions. After all, the bank is in the business of lending money with interest, so as long as they think you will not let them down, they are more likely to be sympathetic to your cause.

In my first start-up we were lucky that another of our shareholders, the CEO’s brother, was a vice-president of Goldman Sachs, and thus able to smooth things over with the bank. If you are not in this happy situation, then I recommend one of the organisations that provide virtual Finance Cornerstones, such as King and Macklin’s company FDUK.

Alternatively, you can even ask your bank manager to recommend someone. I am sure they will be delighted to help.

Finance on a Beermat by Chris West, Stephen King and Jeff Macklin is published by Random House Business Books.

Finance on a Beermat (Second edition):
http://tinyurl.com/6jlpxj