Financial Coaching Blog

Covering Our Financial Bases

We live in a world where there’s so many things outside of our control, however, we also live in a world where we have the ability to improve our health as well as our financial bases.

I always like to draw comparisons on health and finances. When we improve our health, we improve our mind, body, & soul. All three of these, if not properly managed will eventually cost us financially. Not to mention managing our health allows us to think creatively instead of critically, implying that critical thinking usually is a result of having to put out a hypothetical ‘fire’ while creative thinking is the ability to prevent the hypothetical ‘fire’ from even starting.

Furthermore, if we cover our financial bases correctly, it tends to allow us to live a more authentic life, produce more creative works, and build stronger businesses. Financially speaking, a significant portion of the population live their lives overleveraged. Being overleveraged includes living in a home that costs greater than 25% of our monthly income, driving a car that cost $40k, but is worth $20k or worse…leasing a car…starting a business with debt, growing that business with debt, etc.

There’s no shortage of ways to fall into an overleveraged state. This unfortunately leads to an increased pressure to generate income quickly. It creates businesses that are rushed to create products and goods for sale immediately without due diligence and research. Real estate investors look to do a quick flip looking for an immediate return on investment, etc. Auto manufacturers rush to release an all electric vehicle without understanding the technology involved, etc.

If you take away debt, you take away pressure on yourself to work 60 hours a week. If you increase your savings rate, big emergencies turn into small inconveniences, if you become financially independent, you have more time to build a business, spend more time at the gym, have more quality time with family, etc.

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