We Have Moved!

Hello everyone!  I have decided to launch a new Worpress.org site.  This site’s goals have been narrowed and will continue this conversation.  Please join me at:  http://www. HomeBizMastery.net

Thanks for your support and contributions!

Jeff

Five Ways to Re-Think About Your Money

There are as many definitions and opinions of money and what it means as there are people using it, so this question is very personal.  Your answer to this question likely colors and defines your financial life to a great degree.  My thoughts on money, which I am about to share, have certainly had a great impact on my life.  I have struggled with how it fits into my life and those of others.  So understand, this is not a treatise on the definition of money, but rather some thoughts on what money has meant to me, and a few suggestions of how to change your thinking about money.

Here are my suggestions for improving your relationship with money:

1) Use money as a Tool, not as the end goal.

2) Needs vs. Wants – Understand which category you are using.

3) Only exchange your money in Balance with your income or means.

4) Exchange your money only for things of True Value to you.

5) Focus on the Lifestyle result, not the money itself.

Use Money as a Tool, Not as the End Goal

Let’s start with Dictionary.com’s definition of money: “…any circulating medium of exchange, including coins, paper money, and demand deposits.” The key part of the definition to recognize is that money is a “medium of exchange.” This is important because, literally speaking, it means money is used as a substitute to exchange or trade for something else of value – e.g. we buy or purchase something.  Thus, the first and most important realization to come to grips with is that money is simply a “tool” in which to use in an exchange.  Money in and of itself has no value – only that for which it can be exchanged has value.  And, it is these other things of value that are, in my opinion, the most important concept to recognize when thinking of money.

Needs vs. Wants – Understand Which Category You are Using

Most of us, myself included, have needs and wants.  Unfortunately, when it comes to money and its exchange for things of value, we sometimes get these two categories confused.  A person needs food, clothing, shelter, security, etc..; People want large homes, new cars, expensive jewelry, vacation homes, and for some, fame, status and notoriety.  Many times in my life, I have had a problem making this distinction in an appropriate fashion.  My emotions would cloud the decision – thus, my wants received priority at times when I should have been focused on needs.  This disconnect has caused me to make some really bad decisions with money, as I am sure most people can relate.  Delaying wants is very difficult!  Delaying needs can be catastrophic!  Honestly, I continue to deal with this issue, but I have learned to at least recognize this struggle when it appears, which is most of the battle.

Only exchange your money in Balance with your income or means

What do you exchange money for?  House? Cars? Credit cards?  (Yes, we exchange money now, for the privilege of delaying the exchange of money later – an option usually paid for with interest.)  Are you making payments on all the things in your life (homes, cars, vacations, etc…) that consume all or more of your income?  Yes, these are necessities by today’s standard, but what are the tradeoffs?  Don’t get me wrong; I am not suggesting you shouldn’t exchange your money for these things.  I enjoy the finer things of life as much as anyone, but what I am suggesting is that you consider the cost and method of payment in relation to the other things you value.  If your monthly outgo of money is greater than your income, you should re-evaluate how you are exchanging your money.  This situation can cause you to sacrifice other areas of your life you truly value.

Exchange Your Money Only for Things of True Value to You

What do you value?  More family time?  Prestigious material things?  More time to use as you please?  Philanthropic work?  As Americans, many of us aim for an appearance of a high standard of living, as compared to others.  As capitalists we believe that access to a great lifestyle is one of the most basic, underlying tenets of our country.  However, if we live beyond our means to achieve this material standard, we can unwittingly forfeit all of the other areas of life that we may value, such as time with our families or rewarding volunteer work, for example.

Focus on the Lifestyle Result, not the Money Itself

What I have realized over the years is that when I focus on a goal for which money can be a tool in the process, but not the money itself, I have far greater success.  For example, a few years ago my wife and I wanted to change our life dramatically.  I was an executive in a successful company with a great lifestyle by most people’s standards, but it was fueled by emotional monetary decisions and massive consumer debt.  At the same time, the company’s future was questionable, so we decided we wanted a lifestyle where we had greater control of our destiny coupled with limited or no debt and without the stress it provides.  We also wanted increased freedom, so we focused on the lifestyle freedom our money could buy (exchange.)  We made the conscious decision to change how we used our money to a use that was more in tune with our new goals.  Today our life is totally different.  We moved from California to a lower cost area in Georgia and downsized to eliminate the majority of our debt, positioning ourselves to live our life by design.  We used our “money” in exchange for an arguably improved lifestyle with dramatically improved freedom.  My wife and I are substantially happier as a result.

Final Thoughts

So, how do you really feel about money?  What is important to you and are you using your money appropriately to support these areas of value in your life?  I believe you will find that when you think definitively about what you truly value and its relationship with your money, you will begin to make better decisions and improve your life.  Use your money as a tool to help you create the life of your dreams!

The Purpose of this Blog

There are as many aspects of small business to discuss as there are people in small business.  But over the next year, I would like to narrow the focus to discuss those, which in my opinion, are the most important and universal to most everyone.   Some of the questions we will ask are:  Are you cut out for entrepreneurship? Can you manage people effectively?  Who are the most important stake holders in your business? How can you determine what business is right for you? Why do you want to be your own boss?

Along with these big questions and others, I want to discuss the broader subject of how we create income and how this concept is the most important one to grasp, as opposed to simply saying “I will be better off when I am my own boss.”  You see, becoming a small business owner dramatically increases our responsibility levels and requires a shift in perspective; a requirement to retrain our mindset.  For many, this is a welcome challenge and in fact is exactly what they need to thrive; but in others, it is an unexpected reality.  Becoming one’s own boss does not lead to a more satisfying life for everyone, so we will discuss some of the trade offs with self-employment and again the process of creating income.

Important areas to discuss also include the different business models: brick and mortar vs. virtual; start-up vs. franchise; direct sales vs. MLM, national vs. global; etc… Small business, self-employment and entrepreneurship takes on many forms, which we discuss, as well.

The most important area of small business I would like to cover is motivation, or as some mentors call it – “your why.”  What is it that motivates you to enter the world of small business?  Is it a life long dream?  Is it a better lifestyle for you and your family?  Have you had it with your job?  Has your job let you go?  Whatever the reason, each of us must embrace the “why” before we can make significant progress.

Thank you for tuning in!  I look forward to your replies!

Jeff