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Money In, Money Out

Debits and credits.  Income and expenses.  Call it what you will.

This is the cornerstone of financial independence- nothing else even comes close.  Conquer this concept and the world will be yours.

Knowing your free cash flow and being able to control it is key.  Your free cash flow is Money In subtracted by Money Out.

Do you know your free cash flow?  What is the quality of your free cash flow?  How predictable is it?  Are you happy with it?

Unlike the financial markets, everyone can control (to varying degrees), their income and expenses.  If your expenses are too high, spend less.  If your income is too high, well, you can stop reading.

Getting to this number is priority number one when sitting down with me.  For some clients, this conversation is quick, while others have not explored this and find themselves on the negative side of the equation.  You see, most clients come into my office and first talk about great goals- retirement, buying a second home, funding their kids’ education, supporting an elderly parent or leaving a significant gift loved ones.

I truly enjoy working on these goals with my clients.  This is the “fun” part of my job.  The unfortunate truth is one cannot achieve or start to strive for these goals if their cash flow is not in order.  It’s like running from first base to third base- it’s certainly a shortcut, but you will always be ruled “out”.

There are no shortcuts to achieving your goals.  Running the bases in order provides structure.  Yes, its more work, but it allows you the opportunity to reach home plate successfully.  As Thomas Edison once said, “Opportunity is missed because its dressed in overalls and looks like work”.

In all sincerity, getting your cash flow in order is the hardest part.  Its emotionally and sometimes physically draining.  I can’t guarantee many things, but I can guarantee that you will never reach home plate without making it to first base.