I mean what are you doing with your finances, are you even given any thought to what you have now and where you need to be? What about your debt levels? How much money are you making per week? Do you find yourself with very little money left over after you pay out all your bills. Well its not supposed to be like that so you need to get yourself in a better position. Give yourself some freedom some breathing space and for that to happen you need to aim for something and I’m going to show you what to aim for. Aim for the end game but at the moment you’ll probably sit at one of the levels below.
1. Entry Level Optimisation
Blue is bad and green is good. You have $200 or 20% left over in the week but that is not an ideal amount of money as it means you will be living week to week and any unplanned expenses that come up will be a challenge. You probably have minimal savings and this is a stressful and chaotic environment you don’t want to be in. Get to the next level by working hard to reduce your expenses.
2. Moderate Level Optimisation
Loan repayments have reduced meaning you have less debt because you have reduced your expenses by paying off your loan quicker. Getting better however still a lot to do. Read this article on more ways on How To Reduce Your Expenses.
3. High Level Optimisation
Lower loan repayments and rent meaning an increase in the green space.
4. Extreme Level Optimisation
Now your loan is paid off and you have focused on reducing your expenses on food you have 65% of your income as disposable.
5. Extreme + Dual Income
You’ve done well here you’ve added a second income through an investment strategy and your starting to generate profit of $100 per week. Total income for the week is $1,300 and your costs are $550. Your investment strategy could be a real estate investment or purchases of shares on the stock market or any other means. For this to happen you need to reduce your expenses so you can create cash to invest.
6. End Game
Master Achievement Unlocked! Here you have a well diversified investment strategy with multiple passive income streams independent of each other. You still have the original pie chart which might represent your daily job. Your costs for the week are minimal and you have an abundance of extra cash so the next question is how to manage your tax and what do you do with the extra money? More investments might be the go.
The Important thing to remember here is that all the above levels take time to complete and I’m talking over 20 plus years but you can take immediate action on a number of items as mentioned in the article to put yourself in a better position. Get on the path and aim for the end game.