Do You Want To Improve You Financal Future

Improve Your Financial Future

One of the more important steps to secure, maintain, and improve Financial independence is usually to enlarge/expand wealth, reduce/eliminate debt and live a life free of worries, mainly that of finance. Wealth encompasses many aspects like immovable properties, bank balances, luxury gadgets, modern automobiles, holiday resorts, and so on.

Improve You Financal Future

Just about all that will come under the umbrella of Wealth can be acquired/arranged by the simple route called Debt a certain road to financial doom in cases that are many. Loan companies and credit card agencies present a glorious picture offering many types of credit and loans but all have the same goal: to extract the maximum from the debtor and that's You and Me.

Financial advisors, gurus, and consultants thrive in plenty to tell us to do a lot of things such as save regularly, live frugally, use less credit, economize on food, cut down on entertainment, and so on. In the end, one is so confused and frustrated that he/she just throws away all advice and continues to drown in seemingly eternal financial crunches much more debt, less to spend, and eventually wrinkled foreheads, a life and downcast faces not worth living.

The Success Formula: If one wants to transit from the world of financial worries (debts, loans, forced frugality) to the Eldorado of Happiness and Wealth, the practical way is actually total wealth management or perhaps TWM. Just as in other disciplines, industry, and business, the shift has been to TPM and TQM, and so on, - here the focus is actually on the total cost and not on the segmental cost which could vary from very small to very high. What's needed is actually a balance between earning, saving, and spending, all at optimum cost. This delicate art of balancing could be termed as total wealth management or perhaps TWM. One learns to manage his/her wealth in the same way Maintenance and Quality is actually being dealt with in other walks of life. The entire picture of personal finance is actually attended to in the best way, by making use of the same time tested methods that were/are successful in TPM and TQM.

The Practical Way to TWM: Every aspect of the personal finances of ours and related subjects is actually studied and each is actually made to function with the full end lead to mind. Now let us see what items fall within this scrutiny. Regular household purchases, investment in short-term and long-term funds, work, insurance, holiday expenses, banking accounts, strategic buys, credit facilities, repayments, loans, and retirement are actually several of the aspects and could include a lot more.

Each time there's a need to decide on any item, one has to ask 2 questions.
Q1. Is it a decision going to result in an increase in my net wealth?
When the solution is actually a simple Yes, go ahead, if not
Q2. Can there be any way to achieve a net increase, even if there's a temporary decline/decrease?

Rather than an elaborate reason on the how of TWM and when we are going to see a good example of a case study.
The How: Take the example of Max a sales engineer by profession, and what he does. He's an 8-year-old Pontiac, which he drives to work, as his job requires extensive traveling.
Max has completed the monthly purchases of his and payments towards rent, insurance, utility bills, and has $1200 leftover from his paycheck amount. Now he's to find out from the following
i. Pay $600 towards his credit card dues
ii. Pay $400 for a holiday plan for the wife of his and himself on the next weekend
iii. Buy his long-cherished dream automobile with another automobile loan of $24000, repayable in sixty months with an EMI of $560, and an initial payment of $500.

Apply TWM:
1. Skip the credit card payment, and incur a penalty of $49.00
2. Postpone the holiday plan
3. Go forward with the brand new automobile buy with a swap arrangement.

This might appear unsound by most financial advisors but read below where and how TWM operates.
a. Each month Max spends approx $900 on gas for his gas-guzzling eight-year-old Buick. With his new hybrid, he estimated that his next monthly gas bill is going to drop to $450, which makes the decision of his he actually saves $20400 in sixty months, which if invested well in a SIP will fetch him more than forty dollars K in just about the same time.
b. The state where he lives also entitles him to a tax rebate on his hybrid automobile, which would fetch him another $2000 in approximately 5 years.
c. The credit card penalty will be there just for a month, and the same holiday could be enjoyed the next month.

The KEY: Every single decision on buying, spending, investing, and so on has to be cleared by these 2 questions, as stated above. Temporarily Max didn't pay up his credit card dues and incurred a penalty (working out to ninety-eight % interest p.a.) a hefty rate by any standard, but by applying TWM he was in a position to grow the wealth of his to nearly $40K in only this one aspect.

He (Max) has already a running debt of approximately $16000, which he was paying up each month. It'd, as a result, appear improper for him to avail an automobile loan of about, $24000, but nevertheless, he did and his decision is actually sound, only he can see the totality aided by the TWM concepts.

Looking ahead: Whether it's a decision on purchases, loans, credit facilities, anything or insurance to do with money/finance, TWM if applied can result in increased wealth, fewer debts, and overall satisfaction and happiness in life, surely leading to Financial independence a welcome and desirable situation for all.

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