If you’re like most people, you desire to be in a positive financial position. That is, to have enough money on hand now and throughout the future, to satisfy all your needs… and wants.
Two Sides of the Coin
When it comes to the matter of trying to improve your financial position, there are two challenges:
- Getting money. This includes earning it through your work, fruitful investing, the generosity of others, and so forth.
- Losing as little of that money as possible. That’s not to say don’t spend, use and enjoy your money. We’re just recognizing a simple truth that money that escapes your control and that doesn’t result in a financial advantage to you, works against your effort to build wealth.
These two points are based on the formula: Assets – Liabilities = Net Worth
In Pursuit of Money
If you’re like most people, you give a great deal of thought, time, and energy to the matter of getting and accumulating the money to pay for your needs and wants. That’s understandable, considering acquiring money is the first step in building wealth. After all, what else are you going to use for spending, saving and investing?
Thinking about and pursuing income is a theme almost everyone can relate to, regardless of income level. Whether barely scraping by or thriving, most people strive to achieve more money. Laboring, working, toiling, investing, and fundraising are all about getting money.
With all the effort we put into getting money, there sure are a lot of people who are still falling short of meeting their own financial goals and expectations.
Even most of those who consider themselves to be financially savvy, including many of those who get paid to manage the finances of others, are not achieving optimal results in their wealth building efforts. There can be pitfalls with a strategy of focusing primarily on pursuing and acquiring money.
Is your strategy balanced?
If you’re like most people you’ve been focusing more on the “getting” part of the equation than on the “losing” part of the equation.
Of course we all like the idea of generating more money. But money can be even more easily lost than gained, quickly diminishing and perhaps even negating whatever time and effort was invested to generate it.
Most people I confer with have no idea how much money they’re losing in various ways which are highlighted in the next article. Take debt for example. After we run someone’s numbers through a simple analysis, they are usually astonished and alarmed by the amount of money that’s escaping their control. For many people it’s several hundred dollars a month, and for others it’s in the thousands they’re losing each month. In most cases these are losses that can be easily avoided. Considering the time value of money, these monthly losses can translate to staggering amounts over a period of years.
You may be in the same boat, and not even realize it. That’s because most people just live with the losses, accepting them as normal, and not give them much thought. Instead of stemming those unnecessary losses, a lot of people just compensate by either altering their lifestyle or going out and working harder to earn more money to offset the losses.
Even if you are as wealthy as Donald Trump appears to be, you can be sure he has people in his organization monitoring and paying attention to controlling losses.
To guard against the erosion of your assets, be sure you’re paying attention to minimizing your loss of money.
Thank you for visiting StopMoneyLoss.com and reading this article about the two keys of building wealth. Please feel free to share it with others who would appreciate you thinking of them. Also, be sure to see the 9 Common Ways People Lose Money.