Money Basics Part II

Today let’s talk about money inflows.

In plain English, this means where is the money coming from.

Do you work for someone else? Or do you own your own business?

When business is slow do you get paid or are you unemployed and relying on the government to pay your bills?

Think about all sources of income available to you.

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• Do you have a checking or savings account that earns interest?
• Do you work for a company that pays you for your time/effort on their behalf?
• Do you have money invested in a company that pays dividends?
• Do you have family/friends who lend you money when times are tight?
• Do you have a website where you sell products, either your own or someone else’s
• Have you written a book and receive royalties for each copy sold?

Really think about all your money inflows.  It is easy to overlook those $4 dividend checks which show up quarterly and yet over time, if invested, can become a substantial sum of money.

For example:

1.       single $4 check invested at 3% compounded daily for 20 years becomes $7.29

2.      Each quarterly $4 check invested in that same account for 20 years becomes approximately $440. Notice you actually received $4.00 * 4 (quarterly payments) * 20(years) = $320. The other $120 came from compounding.

This example shows the power of starting early and letting the magic of compounding help you achieve your financial dreams.

So today’s exercise is to sit down for the next 15 minutes and decide where all your sources of income come from. Write it down.  While brainstorming you can also think about where you would like your income to come from.

Maybe you work for someone today yet you really feel that your idea for a new —- (fill in the blank) will let you earn more working for yourself.

Do not limit your thinking. Start from where you are. Over time you can get to where you want to be.

I believe in you!