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The Goal Kicker – April 2010 Edition
April 07, 2010
The Goal Kicker – April 2010 Edition
Welcome to this month’s edition of “The Goal Kicker” – the monthly ezine produced by achieve-goal-setting-success.com - dedicated to helping you achieve your goals by providing goal setting related articles and reviews of the latest goal setting products available.
Achieve Goal Setting Success
Your Money and Finance
The Success Squid
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Understanding the Basic Principles of FinanceThe principles of finance aren’t difficult to understand – however, many adults shy away from learning about money and finance because of fear, a perception that finance is difficult to understand and not wanting to face the reality of their financial situation.
The good news though is that the maths and principles of finance are easy – MONEY IN less MONEY OUT equals cash flow, and the aim is to keep a positive cash flow.
Of course, there are many factors that influence the ‘money in’ and ‘money out’ parts of this equation, and you need to understand some basic principles of finance and HOW to deal with money, because if you UNDERSTAND money you are better able to MANAGE your money.
Making the most of what you’ve gotBudgeting is simply an assessment of your income and your expenditure and is the PLAN you create to manage your money.
And the simple rule of managing a household budget is that you need to earn more money than you spend so you have a positive cash flow. If you don’t and you are spending more money than you have, you will have a negative cash flow and either need to earn MORE money, or spend LESS.
The key here is to know exactly how much money you’ve got coming in and where it all goes – so you need to be informed. Only then can you look at HOW you can manage your budget better.
Step 1: Assess your income
Income is what money comes in the door and could be from your usual job (either as a salary, or a wage), welfare payments, child payments or returns on investments. So what is YOUR weekly income after tax? You can get this from your payslip or by adding up the inputs into your bank account.
Be careful you don't overestimate your income if it includes penalty rates or overtime, in fact you’re better off UNDER-estimating your income for your budget so any penalty rates or overtime become a nice little bonus!
And if you’re preparing a household budget, also include your partner’s income.
Step 2: Determine your Expenses
Some expenses are fixed (they more or less the same every week or month, such as insurance premiums), but others such as groceries will vary from week to week depending on what you use. It may be worthwhile going through your credit card and bank statements for the last few months to see exactly where your money is going.
Also, don't forget about the yearly bills such as land tax/ rates and car registration. These are often big bills, but must be allowed for in your spending. To make it easier to tally your expenses, convert all your expenses to a weekly cost. For example, if your yearly car registration bill is $520, divide this by 52 to get $10 per week. By doing this for ALL of your expenses, you will be able to see exactly how much you are spending on average every week.
Are your weekly expenses more than your weekly income? If so, you have a negative cash flow (not good) and really need to cut some costs and BUDGET.
Or are your weekly expenses less than your weekly income? In which case you have a positive cash flow (good thing), but where does all this extra money go?
Step 3: Now set yourself a budget
From your weekly income you know how much money you can spend, and from scrutinizing your expenses you should now have an idea of what expenses you can cut and where you can save some money. Use this information to set yourself expenditure targets – and stick to them! You’ll be surprised how quickly your savings start to improve.
And as part of your budget, you need to allow for:
Understanding Wealth CreationWealth creation means different things to different people – it could be about new investment opportunities, building assets or just simply making more money to fund your lifestyle.
But whatever your idea of creating wealth is, there are some things you need to know first.
You need to know:
Before embarking on ANY wealth creation strategy, we strongly recommend that you see your accountant or a reputable financial advisor, who can discuss the options that suit you best based on your financial background and history.
Making Money with ForexI have recently been introduced to the idea of Foreign Exchange trading (called Forex) as an alternative means of creating extra income.
FOREX trading involves purchasing other currencies and again relying on the fluctuations in foreign exchange value to make a profit. For example, if the Australian Dollar is worth US$0.60 today, but increases to US$0.66 in the following week, again a 10% profit can be made.
Like all forms of investing, Forex trading has its risks, but also has the potential to make significant returns on investment.
As I have limited experience in Forex trading, I am using a trading robot (sometimes referred to as an ‘Expert Advisor’, but in reality is software that analyses the market and decides when to trade based on complex algorithms) called Forex Megadroid.
Forex Megadroid claims massive returns – nearly 1000% per year based on high risk program settings (essentially risking 100% of your investment on each trade).
Now, being the conservative engineer that I am, I have adopted a much more conservative risk profile whereby I only risk 10% of my funds on each trade, so if the trade goes bad, at worst I lose 10%. So far, even with this conservative setting (which, by the way, is the default setting on Forex Megadroid) I am on track to make a return of about 100% in my first year.
Now this is nothing near what Forex Megadroid claims, but still a good investment by anyone’s standards!
If you are interested in trying your hand at Forex trading, do your homework first to determine whether it is really for you, and remember, never risk more money than you can afford to lose.
And if you want to try a trading robot, then check out Forex Megadroid - so far it seems to be producing regular and profitable trades for me. You can always get your money back after 60 days if you decide it’s not for you afterall, and by using a demo trading account (I used Alpari) you can trial the software and the Forex trading concept without putting any real money at risk.
All you need to get started is a good internet connection and sense of adventure!
If you don’t have a reliable and permanently connected internet connection, it’s worthwhile running Forex Megadroid through a Virtual Private Network (VPN) – I use ForexVPS, which is reliable and has good support.
Well, that’s all for now! But don’t worry, the next edition of “The Goal Kicker” is only a month away.
We would love to get your feedback on “The Goal Kicker”– what do you like? What don’t you like? - so we can make it even better.
Catch you next month!
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