YW Blogcast 35 - Managing your finances like you mean it

If you want to build wealth and keep it, you’re going to have to get serious about financial management, and better sooner than later. What is financial management? It sounds like a fuddy duddy term that only old dudes in three-piece suits should be bothering with. Wrong! Unless you like the idea of working the drive-thru window at McDonalds the rest of your life and burning through every penny as soon as you make it – you need to learn about financial management.

Let’s define what we’re talking about. Financial management means taking the actions necessary to insure that your personal cash flow remains positive. That sounds like a good thing, right? Positive cash flow is an idea we all should be able to get behind. Most of us have experienced the opposite at some point in our lives. Maintaining positive cash flow is possible at any age but the sooner you learn it, the more likely you are to have extra cash to throw around as you get older.

Financial management is about managing risk. Risk is what can destroy your assets. Protecting them should be job number one. And wandering blithely through life waiting for the risks to wave a red flag normally doesn’t work. You’re going to need the knowledge to identify them, which comes only with education and experience. Experience – well that kind of unrolls at it’s own pace. Education is something you can accelerate on your own. When should you be in stocks? Bonds? Real estate? How can you protect assets from the tax man? These are all questions that you answer on a day-to-day basis as you go about the financial management of your growing portfolio.

We’re not big fans of turning all this over to a financial planner. That’s just adding another set of fingers to the mix and another chance for a screw-up. Manage your own finances and watch the wealth rise.