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.

Beach Dreams, Breaking Free & Board Meetings

Summer’s definitely arrived on Shoreham Beach and how do you think I know that?  Apart fromt the lovely weather, with May’s storms out of the way, the Beach Dreams tent has gone up on the Green.  Any long term reader of this ezine will know I wax lyrical about Beach Dreams every year and some may even remember the picture taken from INSIDE my handbag the first year I got my FlipVideo.  Nelson’s “Dad Dancing” video has now had 231 views and is rated 3.5 stars!

The Beach Dreams Festival and particularly The Tent is an institution round here, selling tea and cake to raise funds for the festivities and, after school, it’s always full of kids and visiting foreign students making the most outlanding costumes for the parade.

Everyone who can bake locally, does so, and drops cakes, scones, cheese straws etc in as donations, and the many home-made cake lovers on the Beach make it a point of obligation to support the Festival by dropping in on a regular basis to drink tea and sample the goodies.  Home made cakes remind me of my nanny, with whom I lived for happy years as a child, and I love the whole village feel of Beach Dreams.

Photo by the much travelled Jim Callender – see more of Jim’s photos here

While looking at our Money Gym YouTube channel to get the stats for Nelson’s video I can see, using their new Insight feature, that our MG / YouTube audience is 58% female, between 45-54 (which we knew actually).  I would have thought our audience would have been slightly younger than that, between 35 and 55, thinking about the clients who have had the most success with the Money Gym.

Success is all relative as we know, and this fact was brought up again by one of our Silver Elite clients on a call recently.  She said that she would only want to be mentored in Wealth Creation by someone who had millions in the bank and could prove it.

We gently reminded her that it’s not always about being a millionaire, but about being financially free.  And you don’t need a million to be financially free.  It’s all about not having to go to work (if you don’t want to) or doing work you love AND to spend your days growing your wealth and having fun.

Also, no self-respecting millionaire would keep millions in the bank.  For one thing, it would be losing money, and wouldn’t be safe as the government guarantee only £50,000 per person per bank, but there is also the opportunity cost to be considered.

I’ve been approached by my publishers with a theme for a new book – I was twittering on the topic and they said they had been looking for someone to write a book on just that very thing!  I’ll start a mindmap and see how it grows.  I already have a few ideas for what I would want to cover.

I love to write more than anything else I’ve discovered and I’ve got at least three more books inside me and business partner Judith Morgan says she has one too – her wealth creation journey so far.  Judith is a brilliant, funny, poignant writer and I for one would consider that a rattling good read.  I would just love to buy a house in Greece and one in Shoreham or Brighton perhaps, and just divide my time between attending seminars, travelling between the two houses, seeing the world, writing and hanging out online.

We are having an interim Board Meeting on Monday at a lovely Elizabethan Manor hotel, to discuss further the shape of the Money Gym for 2010.  Yes, I know we just did that, but certain key things are changing and we want to make sure we are all happy with the direction we are heading.  YOu can do that when it’s your own business.  The Money Gym is growing all the time, in all different kinds of ways, and we want to make sure that it continues to serve all our own individual “Primary Aims” for our lives, in E-Myth Terms.

More about that in today’s article.

Last weekend I attended the “Break Free Seminar” with Pat Adams and Mark Anastasi which I thought was totally excellent.  They are both great speakers and delivered excellent content, around using direct mail and the internet to create an information publishing business.  I took at least six page of notes and learned loads of new stuff, so even if you are an experienced business person or marketeer, consider attending their next one in June and you can book your tickets here…..

One seminar I would NOT be missing if it weren’t for a prior engagement, is Alan Forrest Smith’s appearance at the British Library at Rachel Elnaugh’s “Marketing Magicians”  Alan says: “Next Tuesday, June 2nd, I will be one of the keynote speakers for BBC and Dragons Den star Rachel Elnaugh.  Not only am I thrilled to be asked to speak for her at The British Library, I’ll also be presenting with some serious heavyweight entrepreneurs.  This gig is different, it focused on real business people or wanna-be smart, fast track entrepreneurs.  There are around 300 places (BUT I think it’s almost sold out). I am also presenting a stack of new ideas, stories and marketing nuggets that you can walk away with. It’s all here…”

My next speaking gigs?  We have a Money Gym “Let’s Talk Money” day

on June 13th which is packed to the rafters and then I’m speaking at Ambar Hamid’s Wealth Thing event on June 6th and then I’m on again for Triumphant Events, with Dr Topher Morrison on 5th July.

Have fun, we always do!

Nicola

What Are YOU Like? More Secrets of Success

I’m just back from the Ecademy Blackstar Christmas Party, which I thoroughly enjoyed.  I loved hanging out with all those other positive, upbeat, professional, passionate business people and it really gave me a shot in the arm in many different ways.

When you work at home, or with just one or two other people, even when you have a large online community, you do miss having direct feedback about yourself from a wider crowd.  In a constant effort to improve, you focus on what you are NOT doing, what you DON’T know, what you are NOT like. So it was great to be in a room full of people who fed back to me what I DO know, what I AM doing right, and what I AM like.

The other interesting thing was how many people asked me how the ….lets call it a downturn…..was affecting my business, or me personally, or our clients.

My answer was that the current market conditions was not affecting me personally, the Money Gym business is doing fine – especially as more people want to know how to create extra income streams, and protect their family against the threat of redundancy, and the clients are simply adapting their wealth creation strategies to suit the current market, and make even more money!

Funny how it felt like they deep down almost wanted me to say “times are tough” so that they could then say to themselves “Yeah, well, that wealth creation business…..alright in a good market but looks like I don’t need to take any action right now”.  Wrong, wrong, wrong.

But as I say, the thing that struck me from participating in the Blackstar Boardroom sessions, where we get together in a group of six and air our biggest issue, to get feedback and support, was just how much I know about all sorts of things!

Not blowing my own trumpet, but I have been “at” this Wealth Creation game so long, constantly learning new things, new techniques, new strategies, new experts…..

I thought I would share with you what you can expect to learn in The Money Gym, if you join Gold before midnight on the 3rd January.  The top three things in each Lane Of The Wealth Highway, if you like.

Although you can of course just focus on one or two Lanes at one time – and we recommend you do!!

Internet:

1.  How to set up and configure a simple blog to attract free targeted traffic to your business or offer & build your mailing list
2.  How to harness the power of Social Networking (using a couple of simple tools), online video and audio, to drive free traffic to your blog
3.  How to turn your blog into a membership site, so you can attract 17,000 people paying you £5 a month – work it out people!!

Property:

1.  How to make money from property even if you don’t have a good credit rating or deposit to invest
2.  How to buy your next family home for £1 and rent it in the meantime with your rent being deducted from the eventuall purchase price
3.  How to buy property 40-50% under market value and get your deposit paid for you

Business:

1.  How to identify the reasons your business isn’t where you want it to be yet and the dilemmas holding you back
2.  How to turn those reasons & dilemmas into a step by step, strategic plan to follow, to make your business explode this year
3.  How to add thousands of pounds to your existing bottom line, for a miniscule outlay in time and effort

Stockmarket:

1.  How to take your underperforming or miniscule pension and turn into something you control, and decide what to invest in
2.  How to make money from the stockmarket without ever buying a share
3.  How to create an income that, in the words of one client, “beats in a week what I was working my a*** off for a month for”.

And that’s just the tip of the iceburg.

In the property and internet lanes alone I could have gone on to list the “Top 10 Things We Will Teach You”.

But………..do you know what the problem is?

What is stopping us teaching you those things?

There are FIVE main things that might stop us being able to teach you those things……….

And they are……..

1.  You have to join The Money Gym Gold – we can’t do anything unless you do.

2.  You have to show up; to your coaching calls, to the workshops, to the webinars, to the Mastermind Google Group.

3.  You have decide what you will do, then follow the instructions and just do it.

4.  In order to get the best results you will also have to focus.  Cut out all non-wealth creating distractions for a year!

5.  Don’t give up.  We can help you overcome ANY obstacle or challenge, but not if you give up.

These last three are so important I’m going to go into them in more detail over the next couple of days, they are Secrets of Success #3, #4 and #5, if you like.

If you missed the first two Secrets of Success you can find them here:

Secrets of Success #1 here:

http://www.themoneygym.com/blog/2008/12/secrets-success/

Secrets of Success #2 here:

http://www.themoneygym.com/blog/2008/12/secret-success/

Ok, so you need to join Money Gym Gold.  Or we can’t help you.

You can do that here

http://www.themoneygym.com/gold

by simply paying your first month membership fee AND enjoy the following:

1.  Save £1200 if you join now before the 2009 membership fee goes up

2.  Get stuck into the £1750 bonus “Membership Site Bootcamp” step by step “how to” videos – if you are one of the first 20 to sign up in December

3.  Save a further £455 if you make the decision to join, pay the deposit and elect to pay the year up front

4.  Relax in the knowledge of the 100% “Return On Investment In One Year” Guarantee

5.  Come to all our events in 2009 entirely as our guest http://www.themoneygym.com/events

So there it is, a blueprint for creating financial security, and then financial freedom, in 2009.

Join Money Gym Gold, turn up, make decisions, follow instructions, focus, don’t give up.

Ask Nicola! Your Burning Wealth Creation Questions Answered

I recently added a page to the blog where you can ask me any question about wealth creation you like.  Brave?  Too generous?  Asking for trouble?  No………

I did this because I want to make the blog more interactive and also, to stimulate articles that arise from real questions.  This can only help our search engine ranking when Google comes by to crawl and then PageRank the new blog!

John was first up and I want to thank you John for your bravery!  It was a lovely question to answer, as you will see…

” 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?”

NICOLA’S REPLY:

“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 – Money Gym Silver would cover that as it gives access to the MG Internet Home Study System (soon to be totally upgraded to cover Social Networking and Membership Sites)

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”

JOHN REPLIED:

“Hi Nicola, Thank you so much for replying to my question and so quick. Your suggestions have given me food for thought and I guess you have confirmed what I have known for quite some time. It’s time to make strategic change in my life. So what an I waiting for………………just do it.  Thanks again Nicola, John”

If you would like your question answered online, with your personal details removed so nobody knows who you are, just visit

http://www.asknicolacairncross.com

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