Personal Finance is a Business

Here's a simple strategy for personal finance:   Think of personal finance like a successful business.  Own the results.

Here's a hack/tip from business thinking.  Cashflow is a term used for businesses, which is the amount of cash flowing in and out of a business. Keep cashflow greater than $0.  Revenue (wages, interest, dividends, or rental income) in minus expenses (mortgage/rent, utilities, foods, entertainment, debt service) out should be greater than zero.  

Unlike a business though, one should minimize, reduce or eliminate debt service since it doesn't potentially increase revenue, as it does for a business.  Instead, debt service only reduces cashflow for individuals.

Replace debt service expense with an investment or savings expense.  Savings is an investment in one's future, including retirement.  Savings and investments have the potential to create revenue for the future.

For more on Ideas You Can Use, check back every  Tuesday for a new segment.

This is not financial advice. Please consult a professional advisor.

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