Life and Career Management
Its All About YOU by Kevin Jones

Money and How should I spend it?

As the economy is drastically changing, many people are having to budget their money differently.  Unfortunately some are losing their jobs or have been cut back drastically on overtime, salespeople are having to work longer hours to close less deals.  We all hear about this everyday.  So what can we do differently?  How can we make the mighty dollar last longer or spend it more wisely?

A real simple formula that dates way back still is true today.  Don’t live on any more then 70% of your income.  The remaining 30% should be 10% for tithing, 10% savings and the last 10% towards free enterprise. 

If we all have more savings, we could look at things in life with a lot better perspective.  We live in the greatest country in the world, but most people don’t have more than 30 days of living expense in their savings.  You work for 20 years and are off work for 30 days and you are ready to file bankruptcy? Why?

Even at a poverty rate of earning potential ($26,000 per year) if you worked for 20 years and made the same amount, $26,000 per year you would have earned $520,000 to date.  At a rate of 10% in the savings you would have $52,000 in your account without any interest.  At that rate you would have two full years of living expenses in your account. This is a much better place to be in.

Open a savings account, somewhere that it is a little more difficult for you to get to (so you have less tendency of getting into it), each and every paycheck write yourself a check for 10% (or set up direct deposit) and send it to the account and forget about it!  It will grow very quickly and will be a nice nest egg for a rainy day!

Out of the 70% of living expense, a basic budget would look something like this:

Housing -  30%
Transportation - 10%
Food - 10%
Bills - 10%
Entertainment - 10%

The Balance of 30%

Savings - 10%
Tithing - 10%
Free Enterprise  10%

You should be able to take the Free Enterprise money and use this to your advantage to begin to increase your revenue.  We started out as a young Military family making about $1000 a month and rent was $450 so we didn’t have much to live on!  What we did was go to yard sales and offer to buy everything they had for a nominal price (only if it was good stuff), we liked children’s clothes and toys because we had a little one and knew the cost of these items.

Our first weekend we found a yard sale full of children’s clothes and toys, we offered her $20 for everything and she would not have the hassle of dealing with these people and she could take her family out to lunch.  Back in 1984 that would buy a family a nice lunch! That is probably equivalent to about $100 in today’s market.  She accepted our offer and we took the stuff to the Flea Market (Florida Swap Meet) the next day and that first Sunday we made $650 still with more stuff left over!  We were amazed to say the least!  We went to yard sales almost every Saturday and sold at the Flea Market usually every other Sunday and averaged an extra $300 to $400 a day.  This extra income or Free Enterprise System enabled us to almost double our income!  Yes it was work, but is also provided a better lifestyle overall! You can find something to do like this also.

With the extra money we saved enough money to buy businesses that were closing, we would buy their remaining inventory and resell it at the flea market also.  Buying in bulk like this provided a lot better profit margin than the yard sales.  This opens up other opportunities also, you could consider buying these business at a substantial discount, fixing them up, building them up and then selling them!  We also went to auctions, the best one was a “Toy Auction” in the beginning of November!  We had the greatest Christmas Booth in the whole Flea Market, not to mention our kids got some of the best toys!  Be open to the opportunity and the possibility and success will come to you!

Remember to save as much of this money as possible, preferably at least 50% and add this amount to your savings!  Then when a bigger business opportunity is available, you will be able to act on it because you are financially stable!

Once the time is right for you, there are many things you can do with the money in your savings, like buy a home, a small apartment building, etc.  Lets say after you have accumulated some money, you want to own your own home but also want an investment.  Buy a 4 unit building and rent the other 3 units to help support your mortgage payment!

If the average rent is $1000 per unit you will have a place to live and $3000 per month coming in when you retire and pay off the building!  Just think if you buy more than one building, lets say you own three buildings, 4 units each, each unit is rented at $1000 per month, you could live in one and still have $11,000 per month income!  Not a bad retirement plan because by the time you retire the rents will be much higher!

Always remember to live within your means, yes it would be nice to be driving a Bentley, but it is much smarter to own investments now and have the financial security for later!  If you invest properly and it is the Bentley you want it will be there for you!