1 powerful yet simple step in improving your Net Worth
I would like to start of by stating that A) if you are not my mother or B) you are not my girlfriend, then welcome to my first attempt at writing to the Internet … ever.
I dont know why you would read this other than my click-bait title but thanks for taking the time. 🥉
My name is Kevin Peters. I’m what you might call your typical millennial living in expensive AF downtown Toronto, working at my first job out of school.
In similar fashion to most of you young professionals in your 20’s, I also have been having haunting thoughts, which I feel could be embodied into a single qoute :
“How the Fuck am I going afford my life?”
— Millennials 2017.
HOW?! can I live a life which involves travelling with my friends, afford my bomb ass Starbucks’ Americanos ☕️, eat my expensive dinners 🍣, live downtown, all while saving up for a home one day and possbily a nice early retirment.
I know some of you guys may have had nobler goals in mind such as paying off tuition, maybe helping your parents pay off the mortgage, possibly even get married one day or have kids?
Well, without keeping this post long, I’ll give you one simple lesson that I picked up from a few of my mentors that I had growing up. And this one simple tip that can change everything for your financial dreams are …
To keep track of your Cashflow
I know, simple right? Almost too simple to the point you are probably like dude … this Kevin guy, wtf am I still reading this gramatically incorrect article.
Hold on, let me explain this with a qoute from a book that I have read that has drastically shaped the way I handle my life.
This quote is simple and meaningful. If you can’t do the justice of tracking your montly cash flow, of all your income and your expenses, it will be extremely difficult in accomplishing any of your financial goals.
Net Worth = Sum(Yearly Income – Yearly Expenses) * Years Alive.
If you want to grow your networth and have the money to do the things you want to do, you need to see a positive net income atleast at the end of each month.
To help me do this, I use an app called Fudget, you can get it for free on the app store. However you can easily do this task on a spreadsheet, a note taking app or hell, even a plain old piece of paper and a pencil. Just take 5 mins to write down at the top of the paper:
- Your monthly income. (Salary and any other cashflow).
- start to tabulate 1-by-1 all your expenses and tag them.
- Subtract income from expenses to reveal your net income.
If it is positive, you are in great shape to achieve your life goals. If it is a negative number, start focusing on turning that trend in the opposite direction.
By doing this, you now have a clear vision on a few things:
1) Your Income
2) your expenses
3) your Net income.
This exercise leads to something interesting, you realize that this is sending sparks to a part of your brain that you most likely don’t use enough. You begin to start asking questions such as.
What is my main source of income? And is there other ways that I can either increase this income and or create more sources of income?
What are my expenses…HOLY SHIT I SPENT THAT MUCH ON EATING OUT THIS MONTH!? What unnecessary things can I start cutting back without effecting the lifestyle I want.
Oh? I have $200 left over this month, what can I do with this to increase my income in the future? Can I invest with this?
This tip isn’t just a simple accounting burden, it’s actually more of a powerful phsycological driver to help kick start your financial journey.
Anyways, it’s getting late and I am probs gonna watch some more Netflix before I get to bed.
If you enjoyed this and or had different opinions feel free to leave comments, clap and or like it or share it. 👏
I will slowly start to write more ask I need to become a better writer for work anyways.
Good night beautiful people! 🛌