Last week I left you working on eliminating debts……

First noting all your debts and listing them in order of highest interest rate.

Then targeting the largest payment to the debt at the top of the list, Including an additional 10% of budget.

Finally, as each debt is paid off, applying the amount allocated for previous debts to the next one on the list.

Once this exercise is complete, you will be completely debt free and ready to apply your budget surplus to investing for your future. More of that later once your debts are cleared.

In addition, you should still be sticking to your budget set out in week 1. Don’t be concerned about this temporary “belt tightening”, it will get much easier as you go along & will ensure your later freedom and happiness.

This week I shall talk about setting goals. Every successful person on the planet has used written goals at some time or another. It is simply not possible to become successful without clear goals. And written goals are the most powerful tool in your success armoury.

Back in part one, I asked you to make lists for every family member of what they need to be happy. These lists form the foundation of your goals. So go dig them out and let’s get to work.

First divide your goals into the following headings:

Material goals – things like, house, car, home appliances etc. Financial goals – income, investments, savings, pension etc. Intangible goals – time together, personal time, having fun Leisure goals – hobbies, interests, sports etc. Spiritual goals – personal development, meditation, becoming a better person or whatever you feel strongly about.

Add any other category you choose to the above list.

Under each heading, make a list of the appropriate goals. I recommend you write your goals in a special book – it gives them a greater focus. You might want to call this your “freedom” book.

The key to setting goals is to ensure that they are SMART!

SMART GOALS are:

S=Specific – in other words, make your goals detailed not vague or undefined. Spell out exactly what you want.

M=Measurable – if it can’t be measured, how will you know when you have achieved it?

A=Achievable – don’t let this limit you too much. It means if anyone has or can achieve the goal, then so can you!

R=Realistic – this means that the goal must be consistent with your beliefs. Napoleon Hill in his epic book “Think and Grow Rich” said “Whatever the mind of man can conceive and believe, it can achieve”.

T=Timely – set a definite deadline or target date for the achievement of the goal. If you don’t, it simply drags on until you become disillusioned.

Between now and next week begin to create your “freedom” book.

Next time I shall conclude with an article on making goals happen. Until then…

best wishes

John

Last week I focussed attention on self-employment and pointed out a number of ways of becoming self-employed.

This week I shall highlight the different methods of setting up a business that can be grown into a separate and valuable entity.

Just like self-employment, this can be done on a part time or full time basis. Obviously you will grow it quicker full time and you will have a greater range of choice if you can start full time. If you have a job or other responsibilities that cannot be let go just now, don’t worry. There are plenty of part time opportunities to consider.

The various ways you can get under way are as follows:

Start from scratch with your own idea

Usually the province of the individual with an idea for a new product or service, who has a burning ambition to see their idea brought to market. This approach is generally considered the highest risk, especially with a product which could take a lot of money to set up for manufacture. A service may take a lot less to set up, but it still needs marketing to an uneducated market. The plus point is that you will not have a lot of competition to start with. Points to consider are:

• How much will it cost to set up the business and bring it to market?
• How easy will it be for competitors to jump on the bandwagon if it is successful?
• Will it be profitable enough to fund growth of the business?
• With a new product or service, how easy will it be to recruit skilled staff or train new employees?

Copy someone else’s idea

Most businesses are not unique. They are either straight copies of others, or a variation on a theme. Some business pundits maintain that being second (or later) in to a market gives you an edge over the market leader. The idea being that you learn from the (often costly) mistakes of the leader. To a degree this is true, but if the leader has become well established, you will always be seen to be a copy! Often the way a later entrant to the market can succeed is by being in some way different or better than those who are already there. Examples are – better quality, better customer service, lower price, greater convenience, more choice, added value features etc. A key way to improve on what is already there is to listen to what existing customers have to say about their current supplier and the products. Log both good and bad points then keep the good and improve on or eliminate the bad. Then remember to tell the customer what is different about your offering.

Buy into a Franchise

This is the ultimate “copy someone else’s idea”, because the originator actually sets you up in business and teaches you how to do it. The very best franchises make it almost impossible to fail. Very many well known high street names are in reality franchises run by individual business owners but under a common brand name. Banks and investors like franchises because they have a low failure rate and a reasonably predictable performance. There are still risks however. There have been and probably still are some “dodgy” franchises out there. Run by very plausable people who use a glossy image to win you over, take your money (franchise fees can be very high) and leave you high and dry with little or no support. Some are deliberate fraud, but others are legitimate businesses who see franchising as easy money but do not understand the importance of support and training.

Buy an existing business

There are many hundreds or even thousands of businesses on the market at any given time. They are for sale for a variety of reasons. Maybe the owner wants to retire & has no one to pass the business on to. Kids don’t tend to go into the family business the way they used to. A frequent stated reason for sale is the owner’s ill health. This may be genuine or it may be a cover for the real reason – a failing business. Just be sure the ill health was not brought on by the stress of running the business. Some people get a kick out of starting and building a business, but get bored after a few years and have the urge to do it again with another idea. Others make a business out of buying up under performing businesses, turning them round and then selling them on at a profit. Others may have got wind of something about to happen that will have a negative effect on the business so want to get out while they can. The benefit of buying an existing business is that it has a proven track record and an existing customer base – just be carefull and check it out thoroughly.

Buy into an existing business

This differs from the above in that you are not buying the whole business, just a share in it. If you have the relevant skills and some finance, you may get a very good deal. Often an existing owner wants to grow, but lacks either skills or money or both to make it happen. By selling a part of the existing business to the right “partner” the business can be grown to the point where the individual shares are worth more than the original business. That way you both gain. Alternatively the existing owner may want to retire gradually by bringing in someone who will eventually take over the whole business. The benefits of this way into business is the help and training you will get from the existing owner. There is less likelihood of being “taken” because the original party is still involved in the business. You have a proven business and you can build up gradually as a team. The important thing is to make sure that you can both get on together – this could be far more expensive than a divorce if things go wrong so choose your business partner more carefully than a wife! You should also make sure you have detailed written agreements concerning how the business will be run and who will be responsible for what. That way there is less cause for disagreement later. Get a good lawyer to check it out.

So, now you have seven ways to go self-employed (from last week) and five ways to start to build a business. These are not mutually exclusive – you may be able to do more than one at a time, just don’t start a second one until the first is running on autopilot. You may start self-employed then turn it into a full blown business employing others.

Next week I’ll look at the various types of business, namely:

• Manufacturing
• Wholesale
• Retail
• Agriculture/horticulture
• Business services
• Personal services
• Mail order
• Internet

Until next time, have a great week

PS – now we are getting well underway, I really look forward to hearing about your successes and achievements towards your goals. Please add your comments (or criticisms!) to this article as well as anything to do with business or freedom that you would like to see in the newsletter. If you have any hints or tips to share with your fellow subscribers, add them in a comment here.

Before you start a business you need to get your personal and financial life in order. You won’t have time after you go into business as it will initially take all your attention to get the business underway.

Last week I  left you to do a little planning……

• First figuring out what kind of life you want
• Second working out a budget to match that lifestyle
• Third totting up all those debts that stifle your freedom

As a result, you should now have a list for every family member of what they need to be happy, both material and intangible things.

You should also have a budget worked out in terms of how much money you need to achieve your chosen lifestyle. This should be expressed as monthly income. Each family member should be aware of how their needs affect the budget, especially the kids. This is good education for them as it teaches them the value of money.

Finally, those stifling debts. Had you realised just how much they came to, or were you pleasantly surprised?

This week we’re going to start with those debts and use our three step approach to get rid of them. In order to achieve financial freedom, you must eliminate debt. You won’t believe just how great it feels to be debt free until you achieve it!

Let’s look at some possible areas of debt and get a kind of priority list for elimination:

Mortgage – most people have one and believe it should take 20 to 30 years to pay off – nonsense, it’s the lenders who want you to believe that. The difference in monthly repayments between a 20 and a 25 year mortgage is marginal – even between a 15 and a 20 year mortgage the difference in payments is relatively small.

Car loan – most people go for 3 year loans but they can be up to five years. Again, because you pay such a huge amount of interest on the longer term loan, there is only a small difference in monthly payments.

Credit cards and store cards – these are the biggest killers as the interest rates can be extortionate. They also encourage you to make small payments and keep spending – that way all you ever pay them is interest, you never pay off any of the actual loan. In fact it usually just keeps on getting bigger!

Step one – take your list of debts and write alongside each one the rate of interest. If you don’t know, find out NOW! You should already have the amount outstanding written down.

Now re-list the debts in order with the highest interest rate at the top of the list and the lowest rate at the bottom. This is the order in which you are going to clear your debts.

Step two – add up your total current monthly payments on all your debts.

Next for each debt except the first, note alongside the lowest monthly payment needed to keep the lender happy. Add these up and take the total away from your current monthly repayment total. Unless you are in really dire straits, this should leave a surplus. For example – let’s say you are currently paying 400 a month and your list of lowest monthly payments totals 300, this means that you have 100 a month to pay off the debt at the top of the list. What we have done is to target as much as possible to pay off the highest interest debt.

Step three – return to your monthly income budget and add ten percent (if you don’t think you can earn an additional 10 percent then see if you can find that amount by some small budget cuts here and there). You are going to use this 10 percent to really accelerate your debt repayment.

Apply this extra ten percent to paying off the debt at the top of the list – don’t worry about the others. As long as you make the minimum payment on each, they will soon take their turn at priority clearance.

As each debt is paid off, apply the monthly amount you were paying towards the next one on the list – in addition to what you are already paying towards that one. As each debt is cleared the amount going to pay off the next one gets bigger and bigger and because you get rid of the highest interest ones first, the rest start to come down very rapidly.

One important point though …… STOP BORROWING!! If you keep borrowing, the situation gets worse rather than better. Stick to your budget – that’s what it’s there for!

Keep steadfastly to this regime and you will be amazed how quickly your debts disappear.

Next week we will return to the more positive aspects of achieving your chosen lifestyle. Until then…

Have a great week

John

Last month I gave you six rules to consider before starting any kind of business or self-employment.

This month I shall highlight the different methods of going solo.

First consider whether this will be a full time or a part time venture. If you already have a job, I recommend you look for part time business opportunities initially.

This will significantly lessen the risk and give you valuable experience to build on for the future. Once you are sure you have chosen the right business and that you can run it successfully, then you can consider giving up your existing job. Too many people make the jump into an unproven business and blow their savings or get into debt when it fails.

If you don’t have a job at present then it may be possible to set up in full time self employment.

So what’s the difference from being self employed and starting a business. Most people think it means the same thing, however, going self employed means exactly what it says – you employ yourself! In other words you create a job for yourself.

Running a business means developing something which can stand alone, maybe even employing other people. Being self employed can often bring more freedom than building a business as you only have to worry about generating a decent income for you, not taking resonsibility for a whole bunch of staff.

On the other hand, self employment is just you and your skills so it will never have any intrinsic value in itself. Whereas building a business means you may have something of value to sell when you want to retire. The choice can be the difference between freedom now and more freedom later!

For the rest of this article I shall concentrate on self employment. This is the simplest way to start if you have a valuable skill to sell and also needs less investment. You can operate from home so need no business premises or other overheads (business costs).

There are a variety of different ways of being self employed:

a. Decide what skill or service you are going to sell and to whom then offer your services to the people or companies you have identified as possible customers. I shall talk about how to do this later.

b. Find an agency specialising in selling your skills and apply to go on their books – they will find the work and pass it out to the appropriate people on their list. All you have to worry about is satisfying their customers so you get more work from them.

c. Locate companies who provide services that need your skills and offer to do work for them on a freelance or contract basis. Often companies have more work than they have staff to carry out, or they have seasonal ups and downs in demand and use freelance staff to fill the gaps.

d. If you have good sales skills, then you may be able to sell goods and services for other people on an agency basis. This can be very lucrative as good sales skills are in great demand.

e. If you have good craft or engineering skills or similar, you may be able to gain work producing products for other businesses to sell. Or if you are creative and can produce good written work, design work, software etc. you may be able to do this for other businesses that lack such skills.

f. Similarly, you may be able to make crafts/gifts or produce paintings or other art objects to sell at craft fairs, markets etc.

g. If you can spot a good bargain and can negotiate and buy well perhaps you could buy and sell used items at markets, car boot sales, table top sales, town/village fairs etc.

There are probably as many ways to achieve self employment as there are people wanting to be self employed. Prior to the industrial revolution, a large proportion of the population was effectively self employed!

I hope this has given you a few ideas to think about. Next time I shall look at the other side of the coin, namely how to start a business that you can build for the future.

Stressed, burned-out, overworked, life out  of control always under pressure, in debt, no quality time…..

This all too often describes the life of today’s citizen. Whether “successful” or not, whether in a high flying job or out of work, too many people are dissatisfied with their lot in life.

The ultmate goal of many is to break free and run their own business. However, all too often I have seen people achieve this goal only to find themselves a slave to their business. Often they have even less time for themselves and their families than the wage slaves they were before, and many end up earning even less than before – or even fail completely and end up with NOTHING!

So how can anyone achieve this nirvana of ultimate freedom when the cards seem so stacked against the individual?

Answer – with a little bit of planning……
and a lot of information on what works & what doesn’t!

So on to Planning……

First – take some time to figure out what you really want. Most people squander their time, energy and money on “stuff” they neither want or need – they only think they do, or worse still some advertiser tells them they want it!

So sit down with your family and decide what each of you truly needs to be happy – the answers may surprise you. Then write them all down so you each have your own list.

Very often it is the intangibles that are most important – like time together having fun. Yet it is chasing after material things that keeps you from having fun! So all you are doing is paying to fulfill other people’s needs at the expense of your own.

Second – once you  have established what you want and what your life should look like, it’s time to figure out how much this lifestyle is going to cost. Really take time to work this one out as it is fundamental to achieving true freedom. Contrary to popular belief, you do not have to be a millionaire to be free – in fact most millionaires are not free!

Make sure you balance up steps one and two before going on. If the cost appears excessive at the moment it is only a reflection of your current imbalance. Temporarily adjust your goals downwards until the balance feels comfortable – you can always upgrade once you become more at home with the concepts you will learn here.

You now know what you want your life to look like and how much income you need to sustain it.

The third step is to take stock of any debts you have – an early step to financial freedom is to become free of debt. Be honest and write down everything you owe.

Once you have completed these three steps, you will be closer to freedom than the majority of the population.

This is going to take you a bit of time and effort – so I’ll give you the next three steps next time. Keep all your notes on the first three steps until then.