The compound factor can work for your benefit, and can just as easily work to your detriment.
If you don’t know where you’re going, you may not end up where you dream of.
Imagine having a vision for your life and getting to the end of your life having not achieved it.
Some of the advice most often given to the people who will be left behind after the death of a loved one is, live your life fully, no regrets, I wish I had…., don’t do the same. Live your dreams every day….
Using The Compound Factor To Your Advantage
What are you doing with your life?
What if I was to suggest to you, living your life fully now, with no regrets is easier than you think.
One of the key focuses in achieving this is the ‘Whole of Wealth’ map. This is your vision of where you are going, and determines if you end up in the place you dream of. A ‘Whole of Wealth’ map consists of three essential components. All are as important as each other. They are all consummately interconnected.
We start with health. You need some quality of HEALTH to live LIFE. And you need life to build your WEALTH.
Well, you could die and leave your life insurance to your partner /family. But that’s not fun! But they will need some quality of HEALTH to live their LIFE and they also need life to build (and keep) their new found WEALTH.
If the recipients don’t know how to manage their money, eventually the money will dessert them into the hands of people who know how to manage money.
Managing Your Money
You have heard of people who win the lottery and within a few years they have lost their wealth or ended up in a worse position. The compound factor is in perfect action. You can as just as easily compound wealth, or compound debt. You can just as easily compound good relationships, as bad relationships. Compound good health one bite at a time, and just as easily compound ill health one bite at a time.
The Compound Factor
The Power of Compound Factor
Being conscious of what you are compounding gives you the opportunity to redirect your course from something that is not serving you toward a course that powerfully serves you. You get to choose your course and be the Captain of your ship.
Most people who earn more simply spend more. Like the tide or the waves of an ocean, when earnings increase, you ride the wave and spend more.
When money is a little tight because you’ve spent frivolously on the stuff, your ship dips between the waves and now you are hoping a new wave, (injection of money) will come along and save you, so you can ride on top of the wave again. (where you really want to be). Most people rely on the hope that one day their ship will come in. Don’t let that be you. Your wealth is determined only by you.
Everyone spends money every day. As a person spends, they are building wealth. The real question is though, who’s wealth are you building? Yours, or someone else’s?
TIP: Spend your money to build wealth.
Where you consciously spend your money determines whether you are building YOUR wealth or someone else’s. When you have your map structured in a way that becomes an automatic process, wealth building becomes easy, and gifts you the freedom of time, freedom from money stress, freedom to experience what’s most important to you. This becomes your life. As you redirect your energy toward the course that serves you, you become the Captain of your ship, allowing the compound effect to work powerfully for you.
So, what are you doing with your life?
A Wealth Mindset
When it comes to a building a great life with great wealth, your mindset, beliefs and attitude are hidden aspects not generally recognised, that affect your ability to live fully and build true wealth.
How often do you think / say this to yourself about that thing that you deeply desire. Then to make yourself feel better for not having it, go and splurge on other stuff, and often things you don’t need! It just replaces the feeling temporarily of what you are really wanting. But here’s the thing, you were able to find money to spend on the stuff but couldn’t find that same amount of money to put in an account, we’ll call it your ‘dream account’, to start paying for your dreams and goals that your soul truly and deeply desires.
The Unconscious Mind
This is a result of an unconscious mindset, belief and attitude that was developed at an early age from your parents or surroundings, often not ever recognised, but has the power to run your whole life without you ever having an awareness of it. It is those programs that are running your life, and can be running in the background ALL your life, without you ever knowing. Hence I suspect the advice of a loved one before death to the people left behind… live your life fully, no regrets, I wish I had…., don’t do the same, live your dreams every day, comes from this realization at or near the end of their life.
A hidden belief is called a paradigm and is a mental program that has control over our behaviour and is often unrecognised behaviour and is habitual.
How do we recognise these programs when they arise?
Conscious or unconscious self-talk is powerful but often complex to change if it is counterproductive, especially when you don’t often recognise when the unconscious, counter-productive self-talk is occurring.
Does Budgeting Work?
Initially a budget may work but as time goes on your commitment diminishes, things crop up, emotions arise and spending for emotional uplift happens, thus your budget commitment begins to fluctuate eventually being dumped into the too hard basket and you go back to your old paradigm and habits.
The Compound Factor
HINT: The compounding effect can just as easily work for your benefit as easily as the compounding effect can work to your detriment. It doesn’t favour one side or the other, it’s a law. The law of compounding is a universal law. It cannot be interfered with but it can be steered in your favour, with the right mindset, belief and attitude. Knowing how to alter this law in your favour is your birth right. Many of the wealthiest people in the world know this and have achieved a truly wealthy and rich life.
Budget v Pay Yourself 1st
So we know that budgeting is a temporary action.
My question to you is, do you have disposable cash to spend on whatever you want? Are you richer (cash) than you were 3 years ago? 10 years ago? If not, why not?
Not enough income?
TIP: Income doesn’t affect your bank balance.
It comes down to what you buy and where you spend your money. You can buy your dreams. You can spend your money on things that appreciate in value. That is the principle of paying yourself first. It also demonstrates the power of the compound factor in action.
THE COMPOUND FACTOR IN ACTION
How To Pay Yourself First
- Buy your dreams.
This is where you open an account that you automatically allocate a portion of your income to go toward your dream. (Whatever that is to you – small or large). This is you essentially buying your dream! Your dream may be a family holiday somewhere. Buying a home for each of your children. Doing a course you have always wanted. Buy a beach house. Buying your dream is so significantly more rewarding on a soul level than the stuff!
- Spend your money.
Open an account that you automatically allocate a portion of your income to go toward your asset that will appreciate over time. Now this could initially be your home mortgage but as time goes on, you may possibly use the equity built in that asset to start a new appreciating asset. (Whatever that is to you – continuing the compounding factor!)
- Paying yourself first is the secret.
If freedom of time, freedom from money issues, freedom to experience what’s most important to you becomes your life mission, and your soul’s desire, just imagine how your entire life will change. A rich life is why we are all here, and a rich life relies on paying yourself first, your health, your vision, goals and desires, and the power of the compound factor.
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Disclaimer: This article is information only. It is not intended to imply any recommendation about any financial product(s) or to constitute financial or tax advice. The information in the article is reliable at the time of distribution, but may not be complete or accurate in the future.