The Principles that Guide Us

How do you make a financial decision?

What are the principles you need to consider before making your financial decision?

Depending on where you are on your path of revenue generation, will depend on what you need to consider when making any important financial decision, personally or professionally.   

The further along you are, the more principles you will have to guide how you make your financial decisions.

When you are in the beginning stages, cash flow is typically the most important consideration when making decisions.

Here are three stages of cash flow to consider:

1. Current cash flow needs for your business and your personal life

2. Short-term future cash flow needs (2-5 years)

3. Long-term future cash flow needs (5+ Years)

Getting good at managing cash flow is a skill that can be learned, and having solid systems and tools in place to help you learn the skill is what will ensure your success and accelerate your results.

The best tool I know of is what I call Dynamic Planning.

There are three parts to Dynamic Planning:

1. Forecasting income and expenses for the next 12 months

2. Comparing actual results against the forecast numbers

3. Analyzing the differences and taking new actions, and or adjusting the forecast to stay on track

When you add your bank balance to the beginning, you will then see your resulting cash position at the end of the month.

Do the math! If you would like some help we love creating these plans for clients.  When the numbers become real I see it over and over the results are created!

I would love for you to share in the comments what comes up for you when you think about creating a plan for your money.