Thursday, June 28, 2007

HOW FINANCIALLY HEALTHY ARE YOU?

taken from the book 8 Secrets of Truly Rich by Bo Sanchez

In his book Bo wrote " becoming financially healthy depends on how you've taken steps towards financial health." He presented six steps to financial health. He put Step#0, which he considered a faith act. Are you ready? here are the challenges:

Step#0: Give to God a Monthly Love Offering ( start with 10%)
Bo wrote" the purpose of money is to use it for love. Tithing are the "training wheels" to learn how to do this. Each month. set aside a fixed percentage of your income to God and the poor. And be open to the blessings that will flow to you.

Step#1: Free Yourself from All Bad Debt
List of down all your bad debts and declare when your Freedom Day will be. Never borrow for anything that doesn't put money into your pocket. Renegotiate with creditors if you have to.

Step#2: Increase Your Income and Start a Sideline
Grow yourself, your skills and your liabilities.

Step#3: Get Protection (Insurance) Equal to 10 Times Your Annual Expenses
Your goal is to be self-insured. While your investments haven't reached that point where your passive income is equal or greater that your expenses, you need to buy insurance.

Step#4: Create and Emergency Fund in the Bank Equal to Six Month's Expenses
These are for your daily expenses as well as unforeseen expenses. Having an Emergency Fund prevents you from dipping into your long-term retirement fund.

Step#5: Create a Retirement Fund Saving 20 Percent of Your Monthly Income in Various Growth Funds
Keep searching on the best places you can put your long-term savings. It will be determined by your age and the level of risk you're comfortable with.

Step#6: Create Passive Income via Business and Investments Equal to or More Than Your Expenses.
This is financial freedom. It is the place where, even if you stop working, you can still live your present lifestyle.

As you take one step after another step, you gain in financial health. You create your future by your choice today!

2 comments:

Amanda Cubaum said...

Interesting post. I want to run a business, so I'll have to keep this in mind. I definitely should be financially healthy before I go through with everything. I'm leaning towards buying a business instead of starting one from scratch, but I haven't had the best luck looking for one to buy. Any suggestions? Thanks.

Ethan Vern said...

Amanda-- Have you looked into local small business groups? They might be able to help and direct you. Plus, it's always good to network and get to know your fellow entrepreneurs.

I also suggest BizTrader.com, because it's this online global marketplace where you can invest in, buy, and sell a small business. You can even use it to find a lender or find a broker, should you need either. Good luck!