Cash Flow is the answer to all your financial goals and difficulties. You don’t need to be a genius, a big earner or special in any other way. All you need is a concrete plan and the will and discipline to make it happen.
As a quick example, five of the $100 bills in the image above, invested monthly earning 10% in a total market index fund will compound to 3.16 million dollars over a 40 year work life. This is not an unrealistic scenario if you are gainfully employed.
Structure your life so that you cash flow every month. Spend less than you earn and make sure there will always be cash left over after your bills are paid—to save, invest or pay down debt.
Add tremendous meaning to each work day knowing you’ve got your financials buttoned down, no matter how modest your income may be. End each day wealthier than you started, it’s that simple. The goal should be to consistently improve your net worth.
It’s amazing how much less the usual annoyances at work will bother you when you’re a man of financial control and prosperity. There will be much less stress and you will enjoy a higher quality of life because of it.
And as you succeed over time, it will free your spirit to know you could walk away if you needed—to know you have the means to survive if you lost your employment.
Add another layer to your impressive character by cash flowing each month. Live modestly and with restraint, so that you can work to thrive rather than just work to survive.
A man who is thriving carries himself differently than other men. He exudes tremendous energy and impressive charisma. People are naturally attracted to him and he enjoys his own company.
If you’re going to spend all that time at work, then you might as well be smart about it.
Be smart and make sure to cash flow.
Change Your Mindset
If you find yourself earning a full time living and surrounded by nice things—but not cash flowing—it’s time to change your mindset and it’s time to start living below your means. As the saying goes, be willing to do the things others are unwilling to do now, so that you can do the things others are unable to do later.
Ask yourself if material wealth is more important than financial security and peace of mind. Is it really worth being a slave to debt and a slave to your employer, just so you can surround yourself with luxuries that you can’t really afford?
If you lost your job tomorrow and would be out of cash in 60-90 Days, then you have indeed surrounded yourself with unnecessary luxuries. And something had better change because it is likely that at some point you will lose your job.
Do you have 6 months or a year’s living expenses cash in the bank? Or even $5000? No matter how talented you are cutbacks, consolidations and offshoring simply do not care. No man is safe, no man is invulnerable.
And what about the possibility of not having to work someday? Or retiring? Or working at something you really enjoy? Is your current lifestyle or standard of living preventing these from being possible? Are you currently able to save and invest for the future?
On another level, is the stress from work and debt affecting your health? Debt is a killer and can manifest itself in many unhealthy ways over time. Is it worth trading your health for material wealth?
If you have been backed into a corner, take a step back and adjust your priorities. Make quality of life, peace of mind, health and financial independence the primary goals for you and your woman.
After all, when it’s all said and done, these are the things along with love and Virtue that really matter; not the rat race of materialism and consumption.
So change your mindset from one that values the extrinsic to one that values the intrinsic. Learn to live below your means. Make cash flow and a growing net worth your quiet indicators of success.
And then one day, your focus on intrinsic will be able to effortlessly provide the extrinsic.
You can have it both ways. And the key to it all is cash flow.
Change your mindset.
Know Your Numbers
If you are not doing so already, begin to track your spending electronically. There is no excuse not to. Once you are up and running it’s an elegant and effortless process that will provide the basic foundation for financial control and cash flow.
Unless your aim is to stay off the grid, make all your purchases via debit or credit so that you can download your spending from the bank into an application; whether it be on your home computer or using a cloud based service. I personally use Quicken on my PC, but both mint.com and ynab.com are excellent cloud based applications.
The primary purpose behind tracking your spending as such is to categorize every purchase and every bill. It’s then just a simple step from there for the software to produce an income and expense statement. The top line will list your income, every line after that is an expense and the remainder at the bottom (the bottom line as they say) is your cash flow—be it positive or negative.
In three to six months it will become very obvious where your money is going. From there it’s just another simple step to create a spreadsheet to parallel your income and expense statement so that you can manipulate the numbers; both income and expense.
All we are talking about here is some simple arithmetic. Nothing more than addition and subtraction, but having this “Pro Forma” income statement as I call it, will prove extremely powerful. As you manipulate the income and expense categories you will be able to see the effect on your bottom line.
And as you’ll see, you’ve got two ways to go. You can work increase your income and/or decrease your spending. This is some simple stuff. It’s elementary school arithmetic, nothing more. The key is to use your Pro Forma as model to get to the monthly cash flow figure you desire and then execute that model in real life.
Remember, it’s not how much your earn, it’s how much you keep. Design your financial life deliberately. If you do not, your hard earned income will simply evaporate into thin air. We live in a society where credit and consumption can quickly leave a man deeply in debt and a slave to his employer. And if you’re not currently cash flowing each month, then you are headed in that direction.
Financial controls are a must if you wish to become the very best you can be. Be smart and button down this area of your life. Add another impressive layer to your persona. Run your household as a business when it comes to your spending.
Take control of your money and make sure to cash flow every month—know your numbers by tracking them electronically.
Get Your Woman on Board
If you’re a single guy, then you’ve got it made. Live off of half of your salary and invest the rest. There are no one else’s sensibilities to consider and you can take pride in going hardcore. It’s a great feeling to have a pile of cash in the bank as a matter of deliberate consideration and personal discipline.
If you’ve got a woman in the fray, then of course, you’ve got a much finer line to walk. Appearances and social considerations will definitely affect her. Be prepared for some resistance if you find yourself in a negative cash flow situation and need to make some adjustments to your spending and lifestyle.
Sell your woman on security—financial security. Get her to understand the importance of cash flowing every month as extremely important for your family’s wellbeing.
Discuss the many examples of today’s ruthless and turbulent business world. And how it is very likely that at some point one of you will lose your job; no matter how skilled or valuable you are. Get her to imagine the pain and gnashing of teeth that would occur, if an extended loss of earnings was to be realized.
Sell her as well on the intrinsic value and intelligence of living more modestly so that you are able to increase your wealth—through cash flow— every month. Compare this to the shallowness of a superficial life based on materialism and consumption. And if you are not cash flowing, then by definition you have slid into an existence where the extrinsic is being valued over the intrinsic.
Share your new insight into your family’s financials and demonstrate to her where you have already cut back in your own spending to set the example. Consider a side hustle or promotion as well to increase your top line income. Lead the way as you should.
Discuss going minimalist with your woman. It is possible to live in a lean and elegant fashion with a few nice things so that you can both have some financial security a brighter future. Sometimes the answer isn’t to kill yourself chasing income, but to just live more simply and play the long game making sure to cash flow. And then let time and compounding work its magic.
Find a way to co-opt your woman to the importance of monthly cash flow. Play the long game if you have to. Pursue your agenda until she has no choice, but to do the right thing.
Remember, if you cave and then things eventually fall apart, it is you that will bear the ultimate responsibility. Hypergamy will make this so, no matter how much you warned her in the past. When push comes to shove, all she really cares about is results. And if you weren’t man enough to get her spending under control you will pay the price.
Better a little pain now, then a world of hurt later.
The Cure All
Money certainly isn’t everything. Most of us are aware of the dangers of making money a false idol. But by living modestly, focusing on intrinsic values and minding your money with control and precision, cash flow can indeed become a cure all of sorts.
To be a complete man in today’s world you must take control of your financials. This is simply a fact of life. Money is a necessary tool for survival. You don’t need to be a big earner or a financial genius to be a success. All you really need to do is cash flow on a monthly basis.
Get your mind straight about what is important. Choose peace of mind and financial security over materialism and consumption.
Track your spending, put a budget together and then execute. It’s a simple formula: spend less than you earn.
And make sure to get your woman inline with your planning. Stick to your guns and you will eventually enjoy the fruits of your leadership.
Control and prosperity can be yours.
Cash flow every month.
All the best,