Posts

BIGG Success Logo boxed

Money Tips if You Do Not Have a Steady Income

life on your own termsBigg success is life on your own terms. We talked all about that last week in a series of five posts where we painted the bigg picture.

Now we want to get into the nitty-gritty. What keeps us from living our lives on our own terms?

___

___

The challenge of irregular inflows

One of those things is not having enough money – one of the five elements of bigg success – when we need it. It’s one thing if you have a regular salary. However, a lot of people don’t have a steady income. It fluctuates from month-to-month.

What if you’re a salesperson working on straight commission?

What if you own your own business and don’t draw a regular paycheck? You may be a freelancer or a solo entrepreneur. You may be in business and have employees. You not only feel responsible for putting food on your table, you also have a group of people to whom you feel responsible.

___

georgeI certainly can relate to this subject, having been a business owner for pretty much all of my adult life. Come to think of it, before I went into business for myself, I worked on commission as a sales person so I’ve seen both sides of it.

___

___

marylynn
Of course, with George, I now am a business owner too.

___

___

george
Welcome to the club, Mary-Lynn!

___

___

marylynnWe have a couple of businesses in their early stages. I left a job in the corporate world with a regular paycheck, but I sure understand now what it’s like not to have that. I know I’m not alone. A number of people in our community have mentioned this as a major challenge to living their lives on their own terms.

___

So what can you do if your income fluctuates from month-to-month?

Understand your cycles

___

georgeOne thing that I found is that I had to understand my cycles. I’ve struggled with this one. When I wasn’t busy, I’d spend time and money promoting and prospecting. Then I would get too busy – I don’t have time to promote and prospect. So I stopped doing it. The thing I knew, I wasn’t busy again and the cycle would start over!

___

If you can be consistent with your most important activities – those things that generate the most income for you – you may be able to smooth out your inflows.

You might even find that you can hire an assistant to perform some of these activities for you. You spend a little money now to save you time and make you money a little later.

What if you can’t afford to hire someone to help you? Then you’ll have to invest the time yourself. When you find yourself in your next “up” cycle – you’re too busy to spend time on crucial prospecting and promotional activities – take a look at it again to see if it makes sense.

___

marylynnAnother thing I’ve found is that I can be more consistent if I carve up my activities into smaller chunks. For example, I may send out five e-mails every day of the week instead of thinking that I need to send out 25 e-mails. If you don’t have the time to do that, start with three e-mails a day.

___

Stabilize your outflows

Risk is often measured by volatility. So by definition, if we have irregular inflows, we are taking more risk. Because of that, we should strive for less risk in our outflows.

___

marylynnWe do this by keeping our standard of living relatively low. Our businesses are in their early stages. So we watch what we spend and live very frugally. For example, we watch how much we shop and go out to eat less than we did when our incomes were more regular.

___

One of our newsletter subscribers, Randy, says “rowing his own boat” by working for himself are his terms for his life. He’s been on his own for about 25 years now. He’s put his two sons through college while remaining debt free. He says he did it by having a plan when his boys were just babies. That plan paid off. He just turned 50 and plans on living the way he wants from here on out.

Congratulations Randy and thanks for sharing your story with us!

Randy’s story also helps us understand a second part of stabilizing our inflows:

Be very, very careful with debt.

We have to resist the urge to pile onto our outflows by adding principal and interest payments. It puts even more pressure on our inflows and more stress on us because we have to earn even more.

What do you suggest?

Share that with us by leaving a comment below, calling us at 877.988.BIGG or sending us an e-mail at bigginfo@biggsuccess.com.

Thanks so much for checking in on us today.

___

Would you like more tips and tools to live your life on your own terms?
Subscribe to the Bigg Success Weekly – it’s FREE!

___

One of our listeners just accepted a new management job. Join us next time when we help him with bigg challenge.

Until then, here’s to your bigg success!

 

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00361-033009.mp3

Related posts

1569]

1571]

1446]

1448]

(Image in today's post by kikasha)

BIGG Success Logo boxed

Mania in the Market and Rising Above the Crowd

buy_sell If you listen to our leaders, be they in business or government, it seems there’s a competition to frame our financial situation in the direst terms. Our media hypes the times so that we stay tuned in. We hear terms like meltdown, nose-dive, crash, collapse, and Great Depression.

___

___

We found a great white paper by Marvin Bolt of Alpha Plus Advisors [PDF]. It’s well worth your time to read the full paper to understand historical mutual fund flows and market performance.

Specifically, he looks specifically at what individual investors did with their money during four recent periods:

Stock market crash

In the first quarter of 1987, individual investors placed a then-record amount into the market as stock prices rose. Of course, in October of that year, the stock market crashed. Individual investors responded by withdrawing record amounts of money as the market hit a low we haven’t seen since.

Gulf War & recession

In the second quarter of 1990, there was a huge inflow of funds as the market hit its high for the period. By the third quarter, investors were pulling money out just as the market hit another low point.

Dot.com bubble and 9/11

At the height of the dot.com bubble, investors poured a new record amount of money into the market in the first quarter of 2000. The S&P 500 hit a high in that same quarter. Things soon changed as the market began falling, reaching a low in the third quarter of 2002, just when individual investors were withdrawing record amounts of money.

Housing bubble & mortgage crisis
The market hit its high in 2007 as investors poured money in again amidst the euphoria. While all the data is not yet in, it appears that in October of this year, a new record amount of money was pulled out of the stock market.

Rising above the crowd
We want to buy low and sell high. History shows that the crowds tend to do the opposite – they buy high and sell low. They invest heavily during the bubble and get out during what we’ll call the crater.

Think about what’s happening right now. Stock prices have been falling. But for every seller, there has to be a buyer! Who’s buying and who’s selling? Morningstar has a great video that’s well worth your time to gain the proper perspective on this crucial point.

To rise above the crowd, you can’t think like the crowd. You have to do the opposite.

So take a deep breath. If you don’t need the money for five to seven years, the odds are heavily in your favor. If you need the money sooner than that, stocks probably aren’t the best investment for that money. Because we’ve relearned just how risky stocks can be in the short-run.

Educate yourself to maintain the proper perspective.
We can’t count on our media or our leaders to do this for us. Knight Kiplinger wrote a fantastic piece explaining all of the differences between today’s situation and the Great Depression. We highly recommend that you read this article to see why he thinks we’re not ready to jump over the cliff.

Market timing is a risky game. Since the crowd tends to get it wrong, perhaps the best way to get it right is to keep investing through the whole cycle. You’ll buy fewer shares when the market is up. You’ll get some great deals when the market is down like it is now. Over time, you’ll end up with a decent return.

Thanks so much for reading our post today. Join us next time as we discuss overcoming guilt about how you choose to spend your time. Until then, here’s to your bigg success!

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00271-112408.mp3

 

(Image by svilen001)