Starting to make more money? What’s next?

Here are some helpful tips of things you should do when you suddenly start making more money.

We all hear the phrase “Peak and Valleys” which in my personal opinion directly relates to our everyday lives. Nothing good or bad lasts forever. We go through life cycles like the economy which is also directly affected by economic changes. Because of that, I believe that we should be using large portions of our money into various investments during good times when things are looking good in every direction. We have great paying jobs, good income, and relations are healthy. Simply said, we should be keeping large percentages of what’s left after paying all of our expenses.  Do not over expend!

Let’s pretend; you just got a big promotion, or a new job and your salary suddenly doubled. First thing people do in such situations is buying cars, electronic toys, homes, etc. 

Here is a list of things people SHOULD NOT do during goods times.

You should NOT over-expend. You should NOT change your lifestyle. Do NOT buy new TV’s, unless the one you have is broken. Do NOT buy or lease a new car unless you really need it. Do NOT buy a new home, UNLESS your credit score is decent, and you can lock yourself into a very reasonable fix rate. Home is a liability. Instead, buy  a home that will generate monthly positive cash flow.

We are not suggesting you to be cheap. Live and enjoy your life but DO NOT start spending money unwisely. Avoid making the same mistakes most people do.

Here is a list of things people SHOULD do during goods times.

1. Continue to live the same lifestyle for at least another 18 months pretending the amount of your income remained the same.
2. Create a good financial Plan knowing what you will do with that extra money.
3. Create an emergency fund worth 6 up to 12 months.
4. We suggest dedicating anywhere from 50% to 70% of your extra income toward investments of your choice. 
5. Create a legal entity C Corp, S Corp or LLC, even if you do not plan to do any business in the near future. Why? Because they provide huge tax benefits. 
6. We strongly encourage you to create a “Qualified Retirement Plan”.

The last three items (in red) are perhaps the most important items on our list. Proper Qualified Retirement Plan allows the person to save thousands and thousands of dollars over the years, but most importantly, to protect the funds inside of your plan in the event of personal bankruptcy or lawsuits of any kind.

I get it. It is NOT easy, and it requires discipline!!!
Yes, it does, however, if your drive off of financial freedom and financial independence and your desire is as strong as mine, and you are determined to be successful, you will be willing to be disciplined.

We all know, success comes with lots of hard work, long hours, weekends but it is worth pursuing. Why? Because it feels GREAT to be in a position to give and help others. Being in that position is, in my opinion, the best position to be in and is definitely worth going after.

Of course, being an entrepreneur is not for everyone, some are simply just comfortable with working an average 8-hour day, come home and be with your family and there is nothing wrong with that. The good thing is that we all know where we belong, and we all have an option to choose the road we want to take.