How to improve finance or financial situation?

  Finance is the third place on my list to better life.  Some people would ask, is finance important in life? Is money important in life? Well, I don’t think money is the most important thing in life, but it is important for most of people, you are probably one of them.

A lot of people are having financial troubles, such as credit card debt, medical bills and so on.

  Many of us have to deal with all the bills we are getting, sometime I think we get too many bills, not enough pay checks; it seems nothing is really free. An interesting question would be, is air free? Is blue sky free? Well we don’t pay for it directly but maybe indirectly if you really think about it – do you need to pay to stay somewhere, to go somewhere? For many of us, the answer would be yes.

  There are many ways to improve your finance or financial situation. But before we get to that, let’s review the big picture.

To simplify things, I put things into two categories: income and expense.

Cash flow = Income – Expense

   I recall being inspired by Robert Kiyosaki. I read many of his books. That is one of the places I got some financial ideas from. In particular, <Rich Dad, Poor Dad>, <Rich Dad’s Cash flow Quadrant: Rich Dad’s Guide to Financial Freedom>, <Rich Dad’s Guide to Investing> and <Own Your Own Corporation>. If you ask what books should I read to improve financial situation, you can try to start with the first 3 books. You should be able to find it in libraries or online.

   So to improve your financial situation or to get more money left in your bank account or your pocket, you should do this:

·         Increase your income

·         Decrease your Expense

How to increase your income?

For most people, income means:

·         Salary from full time Job

·         Pay check from some part-time work

·         Income from Renting your house or your investment properties

·         Income from some sort of business of yours

·         Income from selling something

·         Income from your investment

·         Income from royalty of books or some intelligent properties

   Try to do something to increase the income from above list. And ask yourself how do I increase my salary? How do I improve investment performance? How do I start selling something?

   Although they are usually tougher to increase, but you should definitely try it; sometimes they are out of your control. What you can control is reducing your expense. Or at least I think most people can find ways to reduce expense. I will discuss that in the next blog post.