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.

Wealth Twitterings

I’m embarking on an interesting project at the moment….turning my Money Gym ebook into Wealth Twitterings.  I’m trying to turn each Wealth Tip into a twitter of 140 characters or less, but I’m finding that each Tip makes a few twits so I will end up with more than 101 twits, more like 365 which is one twit a day.  I’ve done six today already because I’m impatient….check them out on this blog on the daily update, or visit http://www.Twitter.com/wealthcoach to follow  us, and then download Twhirl which is great fun, to keep up to date.

Pride, Passion & People Going Gold

Sometimes I feel like a snail, the pace we are moving in the Money Gym, especially when I squint my eyes and look at some others, who have overtaken us and sprinted off into the distance – especially when some of those people were originally mentored by me LOLOLOL.  Then suddenly something happens that I’ve been waiting for, for ages, and it feels like we are moving off at speed again.

Our Money Gym Gold membership has been languishing a bit, while we concentrate on getting the workshops working, and the membership of the club site working right and moving in the right direction (just about to top 1000 members – gotta be a tipping point surely?).

You may remember from previous promotions that Gold is the level at which clients enjoy 1:2:1 wealth coaching/mentoring from our team of experienced coaches – all ex cleints themselves.  Not only that, but email backup from Judith and I, weekly private “Wealth Surgeries” and five of our rapidly becoming legendary workshops with our “best of breed” presenters. 

Gold grew out of my original “one size fits all” 10-step coaching programme, pioneered in 1999 and evolving into The Money Gym in 2003, when I started hosting the workshops at my boutique hotel The Acacia.  Back in those heady early days, clients included Marion Ryan, Mel Rosenthal, Judith Morgan, Maria Davies, Annie Kaszina, Paul Fuggle, Sara Mallett, Jacqui Tillyard, Greg Southey & Karen Knowler.  Many have gone on to do great things that you will have heard about, some are just quietly getting on with being millionaires and having a fabulous life!  Even Andy Shaw was an Acacia attendee for internet marketing tuition and mentoring, amazing to think he’s just become the first Brit to join the internet high flyers club, having broken all UK records for a product launch!!

Sigh, so proud of them all.

So, it was a bit of a major frustration, not having a decent promotional/info page, that summed up the amazing tesimonials, spirit and return on investment results of Money Gym Gold – it changes lives so profoundly but I found it nearly impossible to capture that excitement and potential in my own sales copy.  Having lived it for so many years, all the stories felt old and tired to me and my copy felt the same!

But Alan Forrest Smith, who came to the rescue of our ebook sales page, has been beavering away on our Gold info page, and this week, we quietly slipped it up and redirected all our links to it. 

See what you think at http://www.TheMoneyGym.com/Gold

Now, my next job, is to think of a hook for a product launch – the “why” in Jeff Walkers terms.  Exciting times.

I’m off to Dave Lee’s workshop next weekend and I’m really looking forward to it, and to meeting Rick Otton, the many who pioneered the Rent2Buy/House For A Pound process, honed in the US, perfected in Oz and now thriving in the UK.  I feel like I know Rick having listened to many hours of audio with him.  He is a great presenter and trainer and his “Now, let me ask you a question…..” has sunk deep into my subconcious.  I hope I will be able to use it without an Australian accent LOL.

Judith keeps joking that we can both practically speak Australian now!  Scarily true.

Our last Money Gym Presents Workshop with Tim Brocklehurst & Claire Raikes was a blinder!  As well as being a great, content packed day for delegates, the speakers did very well with attracting new clients from our audience. Judith is already a client of Claires and I’m a client of Tim’s but Judith’s apprroved Steve and I going on Tim’s “Freedom Class” workshop to learn how to use Tim’s dynamite software properly.  That’s in June and I’m so looking forward to it.

Half term next weekend and on the agenda for a couple of days is the cinema – we like the look of “Sex In the city – The Movie”  and the new Will Smith movie “Hancock”

I’ve also found a couple of live poker games locally, one at my upmarket gastro pub, and one in Worthing. You buy in for £7 and get your dinner thrown in, and you play till you are knocked out.  Then you can buy into one more game for £5 and play again till you are knocked out.  Nice people and very exciting atmosphere.  They also play competitions with other leagues and travel around to other venues.  Good practice for my forthcoming cruises I thought and a social life to boot.

Have fun, we always are!

Nicola