Disclaimer: this is NOT the be-all and end-all, sure-fire solution to all your financial planning needs, but merely just a template for positive financial growth which has proven to stand the test of time.
Now that that’s out of the way, we’ll get right into it…
Positive financial growth can be defined as a positive experience with the monetary value that forms part of your life, expressed as a factor of its biggest influencer, which is time. So as time goes by you essentially gain in value as opposed to losing net value or having it remain stagnant. As you’ll know if you remain stagnant by way of your net value then you’re essentially moving backwards as well, because of the effects of factors such as inflation and the subsequent loss of value of money.
Income > Expenditure
I think it’s probably become clear to you that this is indeed just a template for implementing a solid strategy for financial growth. As far as the details go that’s something you’ll have to figure out yourself and this is because things change so quickly in the dynamic world of the finances that what makes for great advice today may very well be obsolete within a matter of only 24 hours.
Be that as it may, the important thing to consider is that of how your income has to be greater than your expenditure, but this doesn’t have to be that way all the time, just generally or as the net effect. In other words there will probably be months along the journey when money may be tight or in fact when you decide to perhaps put the money you have to work by way of investments, in which case it’s alright as that probably suggests a temporary situation.
Overall, whether through savings or investments, the aim is for you to bring in more than what you spend.
Taking steps back to gain momentum for the leap forward
This is probably just an extension of the discussion on your net gain going forward, which is maintained by constantly tweaking and working your financial growth strategy with the view of adding value at a rate that’s greater than that at which you expend value. Consequently, there are times when you might need to take a couple of steps back so that you can run forward with enough momentum to clear a financial growth issue you might be facing.
This is when some careful planning can mean the difference between some serious progress to come in the future and perhaps a major setback. For example (and I’m going to go with a very specific example), let’s say just like a dear friend of mine you run a Web Development & Hosting company and you’re essentially renting the servers on which you’ll be hosting your clients’ websites. In order for your first client to pay you they might want to see their website, in which case a payday loan may come in handy if you don’t quite have the funds to rent your reseller server.
This would be a great way to go about it because then you’re spending a little bit of money by taking out credit so that you can effectively get a lump-sum payment that constitutes a net gain, but this is where you would have to manage the funds accordingly so that you don’t find yourself in the exact same situation all over again.