Uncertainty. It’s a word you hear a lot these days.

How do you live with uncertainty? How do you face the great unknown?

Think like an entrepreneur!

BIGG success is life on your own terms. You’re the person in charge of your life.

Entrepreneurs know that you can’t predict the future.

So don’t try. Instead, do what they do – create your future.

But not just any future. The future you want.

Build your own personal economy day by day, moment by moment.

Watch the inflows and outflows in your economy. Build a baseline for future flows of money.

Inflows

How much do you plan to increase your income next year? The year after?

Build a plan for three to five years. Then ask a very important question:

How will you get from where you are to where you want to be?

Be on the lookout for opportunities that match well with your passions and proficiencies. Then go for the ones that you think are the most profitable.

It’s a powerful combination when your passions and proficiencies meet profits.

Outflows

Many people never stop to think about this basic reality:

It’s easier to control your outflows than your inflows.

So while you project your income to grow, be careful about future increases in expenditures.

Sure, some will go up. Inflation will play in. And you probably want to enjoy some of the fruits of your labor now.

But controlling your outflows will give you more options and create a more sustainable personal economy.

Surplus

You do plan on a surplus, right? No deficit spending here!

With the surplus you generate, you can invest. Your money starts working for you. It’s a powerful thing.

Because, eventually, your Department of the Treasury will dwarf your Department of Labor.

It’s what you want – the freedom to work when you want, where you want, with who you want. That’s BIGG success!

Image in this post from dleafy

For example, large companies and small companies use different financial models. Large companies generally have the ability to raise large amounts of money when they need it.

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For small companies, it’s much more difficult. So it’s more critical for small business owners to watch their cash flow. For us as individuals, our financial model is much closer to the entrepreneur’s.

The two decisions

There are two types of decisions which we must think about: investing decisions and financing decisions.

For large companies, these two types of decisions are independent. They decide what they will invest in. They determine how they will finance their firm.

In an entrepreneurial firm and for us as individuals, these decisions are interdependent. We invest in the things we can finance. It could be a new business or a piece of real estate. But it could also include a new car or a new house.
 
If we have an idea for a project, we first must either have the needed financial resources already available or we have to sell someone on funding it.

If neither of those is true – if we don’t have the money or we can’t sell someone on funding it, we can’t do the project.

Now let’s look at four ways to think entrepreneurially about your personal finances:

Bootstrap
Entrepreneurs understand that they have limited resources. They recognize it, but still make the most of what they already have. You can carry that same attitude into your personal finances.

Retain earnings
This is what we call it when a business saves money. Pre-fund your projects when possible. If you know that you need financing to make an investment, why not finance it yourself? That’s financial freedom.

If cash is king, reserve borrowing capability is queen.
Protect and preserve both your credit rating and your credit capacity. Then you’ll have the ability to fund your bigg opportunity when you see it.

Create value with your projects
Simply stated, Value = Cash Flow ÷ Cost of Capital.
Entrepreneurs must understand that capital comes with a cost. It may mean giving up a stake in the company. It may mean sharing the money with partners or bankers. In all cases, it requires a reasonable return on the money invested.

As an individual, your capital comes with a cost as well. You have to share some of the money you will make in the future with your funders. So just like an entrepreneur, you need to understand if the benefit you will receive from the project makes it worth the money you’re investing.

To determine this, look at the incremental cash flow from any project you consider. If the return on your investment exceeds the cost of the capital needed to fund it, you should do the project and vice versa.

Let’s say you have an old car that’s requiring a lot of repairs. You see that you can save money if you buy a newer car and pay interest. That’s a project that’s worth doing.

Smart entrepreneurs and wealthy people look at every cash outlay as an investment. They want to make sure they’re getting enough value out of the investment to make it worthwhile.

Now that value may be somewhat fuzzy – like it makes you happier or adds to your sense of well-being. In any case, thinking entrepreneurially about your money leads to bigg success.

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Thank you so much for reading our post today. Please join us next time when we’ll talk about the long and winding road to bigg success. Until then, here’s to your bigg success!

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Related posts

The Trap That Keeps You from being Financially Free

Freedom Or Security – Which Do You Choose?

(Image in today's post by srbichara)

Now we want to talk about the freedom to spend your time however you want. If you can do that, we think you’re a free agent. We’ll identify four types of free agents today:

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The Aggressive Passive

Aggressive Passives let their money work for them so they don’t have to work. They make enough money from their investments to pay for their desired standard of living. So they are free to spend their time however they want.

The amount of money you need to be an Aggressive Passive is a lot less if you’re perfectly content not living lavishly than if you want to live large. But it’s life on your own terms, go for what you want.

In our last post, we discussed paths to financial freedom. If you want to be an Aggressive Passive – and you want it sooner rather than later – you’re going to focus on the wealth building path. Maximize income, minimize costs and build Assets – most likely your own business or real estate.

The Passion Player

Passion Players love what they do so much that they don’t feel like they’re working. In many cases, their hobby is their craft and their craft is their hobby.

We have a friend who had built up an incredible business and sold it off. Now he’s back in the same type of business only this time he’s doing it with no employees. He chooses his clients very carefully. He takes plenty of time off, yet he’s still doing very well money-wise. He’s thrilled!

You may choose to work inside a corporation and be a Passion Player. Just keep in mind that, in addition to your work, you must love working for and with the people around you. Since you only have one client – your employer – that may be difficult at times.

Inside or outside of a company, your focus as a Passion Player is building up your personal brand. It may make sense to do this while you have the security of a full-time job. But there’s also some real security – as well as freedom – in moving from an employer (which is like having only one client) to multiple clients.

The Automatic Pilot

Automatic Pilots don’t just sell a product or a service. They don’t just create a brand. These free agents build a business.

In that business, they develop systems and controls. The systems insure a consistent standard of the product or service they offer. The controls allow these free agents to step away from their business without fear of it falling apart.

While they develop their systems and controls, they also train a protégé who can run the business in their absence. Once the protégé is fully trained, the entrepreneur is a free agent!

The Synergizer Bunny

These free agents sit at the hub of a network. They tap that network to bring the best people to the table.

Synergizer bunnies don’t just do projects with others. Bigg success comes to them by creating entire businesses through strategic alliances. Everyone involved is well compensated and the customers receive a great value. It’s a win all the way around.

That’s the key to becoming a free agent of any type: Help others find ways to improve their lives and you’ll be a bigg success.

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Thanks so much for checking in on us today. Please join us next time when we’ll discuss one of the best assets to have today. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
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Related posts

Three Levels of Freedom – Part 1

Three Levels of Freedom – Part 2

Three Levels of Freedom – Part 3

6 Paths to Financial Freedom

(Image in today's post by svilen001)

Financial freedom … can you imagine it? To use the lingo from our last couple of posts, it means freedom from money worries or, even better, freedom to choose how we spend and live.

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Financial freedom is just one piece

We’ve defined bigg success as life on your own terms. There are five elements of bigg success – money, time, growth, work and play. Bigg success comes faster when these five elements work in synergy; that’s part of the bigg idea behind bigg success.

So while financial freedom is a worthy goal, be sure you’re looking at it as part of the bigg picture. What does life on your own terms mean to you? Only you know the answer that’s best for you.

Framing financial freedom

You are the entrepreneur of your own life. As the entrepreneur, you need to understand the two basic financial statements: your Income Statement and Balance Sheet.

The Income Statement shows how much money you brought in the front door and how much money went out the back door. Financial freedom means more income and less costs.

The Balance Sheet shows how much you own (your Assets) and how much you owe (your Liabilities). Financial freedom means more Assets and less Liabilities.

6 ways to define financial freedom

• Debt free

There are variations of this. You may consider yourself free if you don’t carry a credit card balance forward from month to month. Other people want everything paid off except their house. For some, they want no debt period.

You focus on the Liabilities side of the Balance Sheet with this path. You want to minimize what you owe. Better yet, owe nothing.

• Low standard of living

Some people take this to an extreme, but they’re the only ones who have to be happy with it. This is a very simple, yet proven path. Focus on spending less so you’re free to spend the excess money however you want.

Obviously, this path focuses on the Expense side of your Income Statement. “Low” is a relative term; it means low relative to your Income.

• High salary

Conversely, you can focus on making a lot of money. Make a lot more than you spend and you’ll feel free financially.

We called it “salary” but it can be active income from any source – commissions, business ownership and the like. Obviously, we’re on the Income side of the Income Statement here.

• Cash in the bank

If you have an amount equal to three to twelve months of living expenses in the bank, you may feel a sense of financial freedom. It doesn’t have to literally be “in the bank.” For example, you may have the money invested in a money market mutual fund.

This is a Balance Sheet strategy focusing on Assets, specifically Cash and Cash Equivalents.

• Retirement nest egg

Here you get that sense of financial freedom by having enough money stored up to allow you to live comfortably, without working, for the rest of your life. Your focus is on building up the Asset side of your Balance Sheet. Unlike our third definition, this path is about building passive income from these Assets.

• Wealth-creation

For some people, financial freedom means being wealthy enough to buy anything they want. There are a lot of degrees here. “Everything you want” doesn’t have to mean a jet or a yacht, but it can if that’s what you really want!

This is a complex path. You’ll probably need to manage both sides of the Income Statement and the Balance Sheet. You may not try to minimize Liabilities; instead, you’ll focus on having Liabilities that have paid for Assets that make you money.

It’s important to define financial freedom so you can determine your goals. With your goals in mind, you can develop strategies to achieve them. That leads to bigg success!

What does financial freedom mean to you?

Share that with us by leaving a comment below, calling us at 888.455.BIGG (2444) or e-mailing us at bigginfo@biggsuccess.com.

We’re so thankful that you took the time to read our post today!

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Please join us next time as we wrap up this series on freedom. We’ll talk about being a free agent. Until then, here’s to your bigg success!

Subscribe to The Bigg Success Show in iTunes. 

Subscribe to the Bigg Success feed.

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00429-070209.mp3

Related posts

Three Levels of Freedom – Part 1

Three Levels of Freedom – Part 2

Three Levels of Freedom – Part 3

(Image in today's post by svilen001)

Let’s start with some definitions of what we’re talking about when we say freedom and security.

When we talk about security here, we’re talking about things like your personal financial security or job security. Freedom means financial freedom and career freedom.

Many experts say that it’s a trade-off – you have to choose one or the other. We want to examine that today.

So here are a few questions –
Given the definitions above, when we say “security”, what do you think?
If you’re like most people, you’re probably thinking things like “a regular paycheck”, “an annual salary increase”, and “no fear of losing my job.”

What do you think when we say “freedom?”
You might say “creative control”, “no money worries”, “set my own schedule”, and “be my own boss.”

Which one is more fun to think about?
Freedom, of course! In fact, most people tend to smile when thinking about freedom. Thinking about security doesn’t yield the same emotions.

If that’s the case, why do we spend so much time worrying about security and so little time planning for freedom?
That’s a good question, isn’t it? Of course, you might say it’s because you have bills to pay and a family to take care of.

What if you could have both freedom and security?
Isn’t that ideal? Before we offer some suggestions on how to make that happen, we want you to think about how secure that job truly is.

Think about two scenarios –
Scenario 1: You’re an employee with an employer.
Think of your employer as your customer. Think of the services you provide to your employer as your business. Now, look carefully at that … isn’t that what a job really is?

How many customers do you have?               One.
What happens if you lose that customer?      You lose all your income.
How secure is that?                                            It’s not.

Scenario 2: You’re self-employed.
Now picture yourself in your own business with five customers. To keep it simple, assume that each of these customers gives you exactly the same amount of business.

What happens if you lose one?                        You only lose 20% of your income.

So which one is more secure?

Ah, but you protest – with your job comes unemployment insurance and/or a contract with severance pay!

That’s true. However it doesn’t change how you will feel when you realize that your job is being eliminated or you’re being let go for any number of reasons. Wouldn’t you rather live a life free from that concern? To do that, you need more than one source of income … you need multiple “customers.”

2 ways to get started having both freedom and security:

#1: Start a business part-time.
Your part-time business may be related to what you already do, or it may not. If it’s related, make sure you’re not violating any company policies.

How do you get started in business? Get a customer! Now, you’ve diversified your income. Then get another … now you’re even better off!

Hopefully, the income from your part-time business grows to exceed your full-time salary. Now you’re free and secure!

#2: Invest aggressively.
You don’t have to start your own business to have the freedom we’re talking about. Start setting aside money each month into your “freedom fund.” Invest it wisely and over time, you’ll see your passive income start to grow.

When your passive income equals your salary from your full-time job, you’re free and secure. If this strategy interests you, check out Getting Aggressively Passive.

Our Bigg Quote today is by Alan Cohen, the great author.

“It takes a lot of courage to release the familiar and seemingly secure, to embrace the new. But there is no real security in what is no longer meaningful. There is more security in the adventurous and exciting, for in movement there is life, and in change there is power.”

Don’t let a false sense of security hold you back. Ultimately, true security comes from the freedom you find when you pursue your dreams with passion.

Next time, we’ll answer a question from one of our listeners. She’s doing most of the work, but getting little of the credit. We’ll discuss how to get the credit you deserve.

Until then, here’s to your bigg success!