Ask most Australians if they think they are worse off than they were 10 years ago and the answer will likely be a resounding "No!" despite the fact that average incomes have risen over the same period.
So what's the problem? As well as earning more, many people are also spending more and consequently taking on more debt. The amount of debt per household in relation to disposable income has increased dramatically over the last 15 years. Many households are now living in a situation where their personal debt sits at 150% of their disposable income. When you consider these figures it is easy to see why many people feel that they are financially "going backwards".
Those who simply earn income and pay bills are not engaged in the process of cashflow management. They're being passive, they're surviving. Real cashflow management involves understanding the components that make up where the money comes from, where it goes, and what choices are appropriate when it comes to creating a better lifestyle.
There are only 3 types of money:
The money you earn “ and this will stop one day
The money the Government pays you “ these payments are only to assist the most needy and dependent
The money your money earns you “ this is where you need to focus!
"Financial independence is all about cashflow. You need to make sure you handle your cash so it grows", says Bill Savellis, Sydney-based financial planner and owner of www.thefinancialadvisor.com.au. "You need to create positive cashflow by investing in cash creating assets. That way you can create additional sources of income, over and above the income you earn by working, to help you reach financial independence sooner."
The importance of managing cashflow
and ensuring there are enough savings available for retirement is more important today than it has ever been. As more and more people look forward to a lengthy retirement, they need to take the steps today to ensure they can fund these years in such a way that their lives will be comfortable and stress-free. Setting up an Accelerated Cashflow Plan by following a few simple yet structured steps is one of the most important ways to start protecting your financial future.
For more information about an accelerated cashflow solution, download the FREE eBook 'How To Accelerate Your Cashflow In Uncertain Times'