Setting Yourself Up for Financial Opportunities
Introduction
When the only constant is change, flexibility is your greatest asset.
One of the things my clients and I talk about is doing the boring stuff today to enjoy the fun stuff tomorrow. A lot of my business owner clients really enjoy this idea as that is typically what is involved when starting a new business.
But why does this actually matter and what does it actually mean?
The clients I work with that tend to do the following things appear to be more successful;
- They were consistent over a long period of time.
- They stayed the course and didn’t panic when the inevitable noise started shouting.
- They build their financial foundation early on in their lives, allowing them to take advantage of opportunities later on in life.
For most of us, we love the idea of being able to take advantage of opportunities when they arise. But I can almost guarantee that you hate losing out on opportunities even more.
In blog post, we will explore ways you can set yourself up for financial success in the future so you don’t feel FOMO when you are older.
A Real World Example
One of my first clients of my career had started working right after college in a well paying job. At the time, he was still living with his parents and making more money than he had ever in his life.
He had discretionary income and really wanted to play his cards right, so he and I connected. He had some student loans and a car loan, but that was about it.
We worked over the period of 4 years to build his savings, pay down his debt, buy his first home and become engaged. And over that 4 year period, his income almost tripled.
But he was getting worn out from the demands of his job and was seeking something more fulfilling.
After a few months of considering his options, he was offered a great opportunity to go into a sales position. The time freedom was exactly what he was looking for and his income potential was limitless. But it was 100% commission based, which understandably worried him and his fiance.
He engaged me again to run through numbers to see if he would have wiggle room in case sales were slow to start.
My answer without any hesitation was, “Go for it”.
He had worked hard to build a solid foundation where he had about 6 months of wiggle room if he started slow.
He is about 8 months into this new journey and has almost matched his income from his previous job. But he now is able to spend his time how he wants.
This client was able to do this because of the foundation he had built over 4 years. And it was all the “boring stuff”. Paying off debt, building savings, creating a budget.
“Discipline Today Leads to Dollars Tomorrow”
Steps you can take today to build your financial foundation
Building your financial foundation can take a lot of time and patience. But there are some simple moves you can consider taking today to ensure you can take advantage of opportunities in the future.
Step 1: Organize and Automate Your Business and Personal Cash Flow
Gaining awareness and systemizing your cash flow is the first step in gaining control of your finances and being able to take advantage of opportunities when they arise. Reason being, after you do something long enough, it becomes habit. And habits become transformational.
Step 2: Build Your Business and Personal Reserves
If you follow step 1 properly, this step will get taken care of. The simple truth is, having more reserves gives you flexibility to get through tough times, but also take advantage of opportunities when they open up.
Step 3: Create and Follow a Debt Paydown Plan
This is another step that should be taken care of if you follow step 1 properly. For most of my clients, I recommend building reserves and paying down debt at the same time, although this does depend on the situation.
The reason for this is simple. If you have less debt, you have less cash flow obligations and thus more freedom and flexibility.
Step 4: Build an Opportunity Fund
Once the first initial steps have been completed, an opportunity fund is a great next step. Simply defined, an opportunity fund is a liquid and safe fund that is available to use when you need it. This goes above and beyond your emergency savings, retirement or traditional investing.
Imagine if Apple’s stock dropped 50% today. Wouldn't it be nice to have some money to throw at it? That's the idea with this.
Summary
Regret can be a powerful and painful lesson for many of us. And although you cannot avoid this completely, there are steps you can take today to enjoy things tomorrow.
As the saying goes, “Rome wasn't built in a day”. And wealth, for the most part, follows the same rule. Take the small, but constant steps today to set yourself up for success in the future.
If you would like help with any of this, here is our link to do a complimentary Wealth Exploration Call.
