Financial Success - How To Make Money And Achieve Financial Success Even In A "Bad" Economy

Most people seem to think that their ability to make money, increase their income, or build wealth is dependent upon the state of the economy. This couldn't be further from the truth. Truth is, the economy is largely dependent upon people's common perception or belief about money - whether to spend it, save it, or increase it. This perception or belief in turn, determines their actions.

It is this belief that you individually hold in your mind regarding money that will determine your actions, your level of income, and the decisions you make about how you will use your money, and how you handle your money. In fact, how you manage your money will determine if you are a "spender" or "saver."

If you listen to most financial experts in the news, they will give you "external" reasons why the economy is this way or that. They will give you a list of do's and don'ts on how to make money or solve your financial problems. But, they are temporary solutions to a much deeper problem.

Making money and building financial success is directly tied to your beliefs about money, which in turn, determines whether you make the right decisions that make you money, causes you to be debt-free, increase your income, or build wealth. Everything that has to do with money is a direct result of what you believe about money, and what you have been exposed to regarding money.

Your beliefs about money influence the way you handle and manage money, and whether you make decisions that will increase it or decrease it in your life. Proof of this can be seen with lottery winners. With the millions of dollars they win, most lottery winners end up at the same financial level where they were before they won - mainly broke! What you believe about money and your mindset about money will determine if you are economically healthy in a good or bad economy. You are economically healthy when you have the amount of money you need, including a surplus to do what you want, when you want.

If you want to make money, increase your income, or change your financial condition, you must change your mindset or beliefs about money. It's just that simple. If you don't, no matter how hard you try, no matter how much willpower you use, and no matter what ideas you come up with to make money, it won't happen.

You may think your idea is the greatest thing since sliced bread, but if you have negative money beliefs, you will more than likely carry it out the wrong way, or it won't produce long-term success. You will eventually return to the same financial level or condition before you implemented your idea.

Another person who has a success-consciousness can come along, and take the same idea, and he will get rich, and continue to do so, for as long as he wants. That is why your finances constantly fluctuate between you having money, and not having money. That is why you often see people in the same business, in the same location, selling the same product, and one will be successful and the other won't. It all has to do with what you really believe about money.

If you don't change your mindset or beliefs about money, any success or money you have will not last long.

For more information, read "The Secret of Success: How To Create Wealth In A Good Or Bad Economy" at: The Secret of Success: How To Create Wealth In A Good Or Bad Economy.

Diamonique Fortune is the Marketing and Communications Director for http://www.SuccessLearningNow.com, which sells unique success learning e-books, video learning e-books, and instant Internet businesses for entrepreneurs, you won't find anywhere else, online or off.

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The Problem With Traditional Financial Planning

Have you ever met with a financial planner? If you haven't, you can expect to go through a certain process. You will be asked about your financial goals. One of your goals will likely be that you want to plan for retirement.

You will be asked about your present income. You know the answer to that one. You will be asked about your expenses. That one will be tough. Everyone underestimates their expenses because most of us have no idea what we're really spending and what we're spending it on.

You will be asked about your assets -- what you own. You know what you own, but it will be tough to put a market value on some of it. You will be asked about your liabilities -- what you owe. For most people, facing the reality of their debts is rather daunting.

You will be asked when you want to retire. I would say the average age most people give is 55 years old. I don't know why that is, but 55 seems to be a popular number. Then the financial planner will tell you that you will need to accumulate enough money to live another 40 or 45 years after retirement. After all, if you live to 90 or 95 you don't want to run out of money, do you?

You will also be asked about your risk tolerance so that the planner can determine what kind of annual rate of return to factor in for your investments. If you say you have a low risk tolerance, the planner will consider low-risk investments that will give you a lower rate of return. If you say you have a high risk tolerance, investments that could provide a higher rate of return will be considered. You can't have it both ways. If you don't take risks, you can't get a very high rate of return on your investments.

Then all that information will be dumped into a financial planning software program. The software will print out a plan that will say you need to accumulate several million dollars by the time you're 55 years old. Oh, and it will be exact to the penny. For example, $5,387,234.23.

You will look at the plan and you will think, "My gosh, there is no way I can do this!" You may get started doing a few things that the planner recommends. But it won't last very long and you'll go right back to doing things the way you've always done them.

So what's wrong with the traditional financial planning process? Plenty! First of all, it's ridiculous to try to look decades in the future to predict what's going to be happening in your life. I don't know about you, but I don't know what's going to happen tomorrow, much less decades from now.
Also, traditional financial planning doesn't take into account what financial freedom actually is. You're financially free when your passive income (money you don't have to work for) equals your expenses.

So if you have no passive income right now and your expenses are $50,000 a year, and you can get a 10% return on your investments, you need to accumulate $500,000 to become financially free.
If you can get a higher return on your money, you can reduce the amount that must be accumulated. If you settle for a lesser return because you're risk averse, you will need to accumulate more. You should also consider inflation. Of course, if you invest for inflation, it will already be factored into your investments.

Understanding financial freedom as the point where your passive income equals your expenses is a much more realistic way to look at it. Most people who are committed to being financially free can achieve their goal in a matter of a few years, not decades.

Copyright 2005

Larry Holmes invites you to visit http://www.smart-money-report.com/ Your common sense guide for financial and investment success.

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