The power of habit can be quite interesting. Rather than create 2017 resolutions that may not stick, a good alternative is to develop positive habits this year. Especially when the category is financial life.
So, make it your goal to form new habits that will take your financial life to the next level.
From learning a new skill every day to hitting the gym regularly, habit takes away the one singular thing that prevents us from getting things done – resistance. With good habits, we no longer resist. We just do it.
You can quickly attain financial freedom by positively channeling the power of habit toward how you treat money. But, first, let’s look at the steps to developing new habits.
Author James Clear breaks down habit formation into three steps (the three R’s): reminder (what triggers the behaviour); routine (the habit itself) and reward (what you get from this behaviour). In order for a habit to stick, it must follow the three R’s rule.
By practicing some of the following habits, your reward will be a more financially rewarding lifestyle.
1Be clear about your financial goals
One habit you need to develop is clarity toward your goals. Your goals can shape your attitude toward whatever you do and put you in the right perspective about your financial life. Lack of clarity is equivalent to having no goals at all.
“Clarity about your money goals is the first step towards getting your finances right,” Yasir Khan, founder and chief editor at WealthKept.com, told me. “Getting your finances right – being able to prioritise what you do with your money – can only be achieved by clearing the unnecessary obligations out of the way.”
Developing a habit of being clear about your financial goals will also create a sense of focus, which is the psychological effect of setting goals. Let’s assume your aim is to start your own business this year. You’ll outline how much funding is required to do that, and how much you want to raise yourself.
2Stop associating guilt with money
One habit which keeps a person from growing financially is how he or she feels about money. A lot of people feel guilty, which is why they often find it difficult to discuss the financial terms of a business relationship before starting one.
Develop a positive attitude toward money this year by overcoming any guilt you feel about money.
3Seek more income sources
The best way to improve your financial life this year is to use your free time to earn an extra income. Start by looking at areas where you can fill a need and earn extra money in the process.
And make converting your spare time into income opportunities a habit. You could freelance for businesses or help people with things they can’t do themselves. Khan said he was able to start two small businesses apart from his main job when he noticed he could use his free time to help others. Now that his side businesses are growing, he hires people to help him run the business.
4Make clearing your debts a priority
One of the biggest hindrances to financial growth is debt. The problem is that debt keeps compounding, making it your most expensive liability. Start paying off your debt with each pay cheque you earn. By forming this habit, you could become debt-free by the end of 2017.
5Save to secure your future
Make saving a habit in 2017. The more you save, the more you’ll have when you retire. JPMorgan Chase puts together an annual guide to retirement that provides investment and savings strategies for all stages of life.
6Separate friendship from business
Underscore the purpose of your relationship with others, and make it a habit to always separate money from friendship and friendship from business.
A lot of relationships have gone to ruin because of money. In 2017, be careful when forming business relationships. Make sure you know enough about someone before entering into such a relationship. Use background check tools like Check Them or Check People before a first meeting. Entering into a relationship with the wrong person could be costly or devastating to your financial life.
7See money as a means, not an end
Many people get the notion of money very wrong. Because we see money as the end goal, it affects our orientation about it. See money as what it is and what it’s meant to be – a tool, a means to an end. What the end is for every one of us may be different. For most, it might be happiness, while for others it’s simply a comfortable lifestyle.
8Seek advice from money experts
Develop a habit of seeking advice before making any major financial decision. This will help you avoid making any decision you’ll end up regretting. When you make a habit of seeking financial advice, you’ll be less likely to take financial risks that could hurt your lifestyle.
9Decide against impulse buying
Make it a habit to spend only on things you need. Cut back on impulse buying by weighing your options before making any purchase. When you buy on impulse, you only gain a temporary sense of satisfaction. Once this instant gratification has worn off, what you’re left with is a shrunken purse and a tinge of regret, or buyer’s remorse.
10Live below your means
Many wealthy individuals mastered the habit of living below their means, even before they became hugely successful. A lot of wealthy individuals prefer to live a frugal lifestyle.
Going frugal can help you create a financial lifestyle that’s easily manageable. It can leave you with enough money and time to invest into your business and relationship. And that’s what good money habits are all about.
This article was originally posted here on Entrepreneur.com.
(Infographic) The Financial Advice Millennials And Gen Zers Want To Know
Having a grasp on your financials is tricky, but it’s crucial if you want to be successful. And that starts with getting the right advice.
Whether it’s saving for retirement or paying off credit card debt, money management can be a challenge. Of course, different people have different concerns – and that often comes with age. While a 60-something baby boomer might be organising their savings for retirement, your 20-something millennial might be focused on paying off student loans.
In a recent study, financial intelligence company Comet surveyed more than 1 000 people to uncover the top financial concerns of various age groups, as well as the financial advice millennials and Gen Zers want to know and what they hear instead.
Overall, saving for retirement was the top concern across all age groups, with saving for an emergency and affording monthly bills following in second and third. However, it’s no wonder these are some of the most pressing worries – according to the research, 23 percent of people admit they don’t have a savings account, and 43 percent reported not being on track towards their retirement goals. Perhaps that’s because they didn’t hear the right advice growing up. At least that might be the case for Gen Zers and millennials.
According to the research, these young people want to learn things such as how the stock market works, how to manage an investment portfolio, how to invest in real estate and how to build credit. Instead, they’re simply told how to create a budget, save for retirement and pay credit card bills in full every month.
Having a grasp on your financials is tricky, but it’s crucial if you want to be successful and comfortable. To learn more, check out Comet’s infographic below.
This article was originally posted here on Entrepreneur.com.
14 Ways To Make Quick Cash On The Side
If you need money quickly, here are some solid ideas.
Need to make some fast money on the side, whether it’s to pay off a credit card or to make your rent?
Keep in mind, making quick side cash isn’t about making a lot of money or getting rich. It’s about getting a shot of capital to help tide you over and put something extra in your pocket. However, some of these side-income ideas can build up your wealth over time. There’s many ways to accomplish this: By participating in the gig economy, the sharing economy, online sales networks, passive income techniques and more.
If you’re looking to make extra money in a relatively short period of time, check out these 14 slides.
Take Advantage Of Financial Democracy Made Possible By The New Stock Exchanges
Why should financial democracy matter to entrepreneurs?
Because it creates a society able to afford products and services. Without it, even the innovative products and services that are entrepreneurs’ bread and butter will fail.
What is financial democracy, exactly?
It’s both the right and the ability of the (wo)man in the street and business people to make the decisions that affect their financial circumstances.
Financial democracy does not automatically follow political democracy. For almost 25 years after South Africa’s political transformation, the exclusiveness of our financial markets continued to deprive the vast majority of South Africans of the means to invest, save, and build wealth. South Africa has, therefore, never developed a retail stock exchange environment. So, it has deprived the majority of small and medium sized business of access to capital.
For entrepreneurs to truly flourish, they need a mechanism that easily and seamlessly connects the investor pool with every size of business. And, they need affordable ways to enter both the retail and institutional market.
In short, they need stock exchanges. Ones on which listing takes weeks rather than years, doesn’t break the bank for listing fees, and provides the shortest route to the largest possible potential investor base.
That’s not been possible in the stock exchange monopoly that existed for six decades. Now, it is.
We now have four new stock exchanges. The resulting competitive environment will significantly reduce the cost of listing – and the cost for investors of buying and selling shares.
Instead of restricting share trading to people or organisations who already have tens of thousands of rands to invest or millions to spend on listing, by licensing four new stock exchanges, the Financial Services Conduct Authority (FSCA, formerly the FSB) has recognised that most financial decisions do not call for high levels of education.
Most people know how to spend their own grocery money. Most know that it’s better to keep their R1 000 monthly income in a coffee jar than spend R50 of it on bank account fees. People who can barely read and write are immensely skillful at manipulating air time deals to their advantage.
There is significant financial savvy in all social strata.
In the same way, although the mechanics of bookkeeping and accounting may be unfamiliar territory to many entrepreneurs, most have a clear understanding of the difference between profit and loss.
The FSCA has therefore enabled democratisation of the financial markets by enabling the broadest possible spectrum of entrepreneurs and investors to use stock exchanges to participate in and contribute to the economy – on their own rather than prescriptive terms.
How do you take strategic advantage of this democratisation?
- Base your business strategy on people’s instinct for making decisions in their own best interests. Trust financial decentralisation, such as one sees in crowd funding and in digital environments such as block chain, where people would far rather trust one another than institutions and governments. This is democracy innately at work in the financial environment and it’s accelerating organically as digital technologies give people more means and the confidence to help themselves – to information and opportunities. Ride the wave.
- Tap into people’s desire to innovate. Consumer organisations have proved that letting people interactively help them develop products is a powerful growth engine. Apply the principle by letting people grow your business by buying shares in it, giving you capital and themselves a platform on which to build wealth.
- Remember, the ultimate loyalty reward is equity.
Your financial democracy business plan
Look to list on an entrepreneurial stock exchange; one that was founded by entrepreneurs on entrepreneurial principles.
That means: A stock exchange that is already built on financial democracy and decentralisation. One that has, at its core, a single operational concept that keeps things simple for you, automatically gives you an immediate competitive advantage, and, ensures that no matter what your business needs in terms of attracting capital, the exchange can provide all the options in the same, consistent way.
What does such an exchange look like?
It has fintech capabilities. So:
It slashes your listing costs. It achieves this, among other things, by enabling you to populate an electronic prospectus, demonstrating your financial viability, and self publish.
It gives you control by having the granularity and agility to impose relevant governance right down to the individual investor. You get to decide the types and quantities of investors you want to attract. This also enables you to achieve black economic empowerment in perpetuity.
It leads the world by clearing and settling trades in T+0. No-one in the value chain has to hold large sums of money for days following a transaction. Small transactions become profitable. Investors don’t have to risk their life savings on a single large trade. A retail market is opened. An investment and savings culture is entrenched. The economy expands. Your business grows steadily.
It enables anywhere, any time trading via a mobile app that allows investors to see share value in real time. See economy expansion point above.
It integrates processes and procedures, simplifying them and ensuring rapid onboarding of issuers and, therefore, speed to market with new concepts and alignment with the digital economy.
It operates a principles-based regime. So:
It treats you, as an executive, with respect. It’s not prescriptive. It does not insist on excessive oversight, allowing the Companies Act to guide you to sustainability.
It does not attempt to squeeze your company into a pre-defined business or listings format. It recognises and works with your uniqueness.
It obviates the need for expensive specialist listings advisors.
It focuses on financial inclusion and access. So:
Shares can be bought and sold for no more than R1 000. See economy building point above.
The new world of stock exchanges is integrated, synergistic, holistic, organic, self-fulfilling
Decentralisation of financial control, democratisation of opportunity leads to a whole new economy. One in which, for instance, a taxi operator can finance a minibus through a company in which his purchase gives him shares. A single purchase gives him two benefits: a vehicle on which to found his business and a longer-term investment in shares that he can trade. The funding company gains liquidity through access to a wider base of investors while being able to control who buys and sells and the conditions on which trading takes place. Increasing black equity in business becomes an organic, natural, self-perpetuating process.
Everyone wins in a decentralised, democratised financial market. And it’s the stock exchanges that drive the process.
As an entrepreneur, can you afford to ignore the acceleration that listing could give your business growth?
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