Over the years I have noticed a pattern that leads to why some become financially successful
or fail.
If you are not aware of this pattern, it will be almost impossible to change anything about
your financial future, nor will you even realize what is causing your difficulties.
What this pattern is and more importantly, how you can change it with a simple concept
to take control of your financial future, I will show you in today's video.
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So what is this pattern I was talking about at the beginning?
It is a way of bad money management, which I often see in not so financially successful
people.
I have said many times in the videos that most of your financial success is from your
behaviors and habits with money.
And people with less financial success also show certain patterns in how they handle their
money.
The consequences of poor money management can be serious and long-term.
People who do not know how to manage their money often encounter problems such as: Inability
to meet basic needs, Having to borrow money to meet expenses, incurring debts that they
cannot repay, Facing financial ruin and poor money management can also have negative consequences
for the individual's mental and physical health.
Especially at the present time when interest rates are rising, the cost of living and energy
prices are increasing, poor money management can lead to not being able to afford one's
basic needs or to financial ruin.
It is all the more important to recognize and change these patterns of bad money management.
But in order to change certain habits in the first place, you have to be aware of these
habits, which is why I would now like to share with you the cycle that often people with
bad money management go through.
The cycle begins with the salary that everyone receives each month.
And now it is important what this money is used for, which can be shown in this graphic.
I call this cycle the cycle of financial death.
Above you see the salary, which comes in every month.
This salary then divides itself with the humans with bad money management as follows:
This money is then spent on debt, shopping, parties, new gadgets, the car and eating out.
Often I hear from these people that they do not spend so much money on these areas, but
this is often because they are not even aware of what they actually spend their money on.
I often have them keep a spending journal where they have to enter every expense without
exceptions and usually after 2 weeks alone through this tool, are much more aware of
what they spend their money on.
Now you have seen the spending behavior of people who have bad money management, but
what is the solution?
It is important to learn how to manage money effectively in order to avoid these negative
consequences and improve one's overall financial situation.
For this, I learned a concept from my mentor that helps you to manage your money like the
financially successful people.
Also this cycle, I call it the cycle of financial success, starts with your salary at the top,
which is now divided in percentages as follows:
1.
the financial freedom account.
This account is 10% of your salary and this account is used solely to build your financial
freedom by using this money only for investments such as real estate, stocks or passive income
projects.
It is important that this account is never used for any other purpose.
2.
long term saving Another 10% is set aside for later expenses,
for example to cover major repairs or unexpected expenses.
Because of this you are always well prepared and you don't have to take out loans or borrow
money when things get tight.
3.
education 10% goes into further education, for example
for seminars or books.
Why?
This serves to increase your income in the long run by adding more value to others, which
often comes back to you in more income.
Consider the following: As an employer, would you rather give a raise to someone who can
only do their job or someone who can also be used in other areas or solve specific problems?
4.
necessities 55% of your salary goes to just necessities,
like food, clothes, insurance, rent, gym, transportation.
5.
pleasure Pleasure of course must not be missing and
for this we plan another 10% so for example to go out to eat.
This is where the biggest difference lies, and I think it becomes clear.
In the previous example it was almost 50% for pleasure, here it is just 10%.
And this is also what differs the most between people who are financially successful and
those who are not.
Those who have bad money management spend most of their money in this area, but often
simply unconsciously.
They simply aren't aware of what they are spending their money on, nor what they want
to spend their money on in the first place.
Therefore, just managing your money like in this video will solve 99% of your financial
problems.
6.
donations 5% should be used for charity, but if you
have debts, I recommend using this 5% to pay off your debts faster.
With this concept you can completely change your financial future and change bad money
management habits by replacing them with better ones.
But to make it even easier for you, you can also open a separate account for each of these
areas and then automatically allocate the respective percentages to separate accounts
via standing orders on the day you receive your salary.
This will take the decision out of your hands and you won't be tempted to spend the money
for other purposes.
Another tip is to build a money magnet.
I have reported on this concept a few times and the testimonials are really amazing.
The concept is based on the saying "money comes to money" which comes from the German
and if you want to know how the money magnet works and how you can use it for yourself,
watch the video on the right now.
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