Having a Money System Matters

First of all it is important to understand that money is just a game. You can compare it to Monopoly, where you gain income every time you pass start. That income you can then convert into more income sources – or you can spent it on luxuries.

While the real world is slightly more complicated, it is fair to compare the two.

In this article we will help you understand how to build a money system, that allows you to optimize your game.

 

The very simple money stystem looks like the picture on the right hand side.

Money comes in on the left, expenses goes out on the right.

And what you manage to accumulate is collected in the box below. That being any money you do not spend, from your income after taxes.

The rules of the Game

So, believe it or not – the rules of the Money game are really simple.

  1. The more you keep for you self, the more wealthy you will be
  2. Keep building Assets that increase your cashflow
  3. When you cashflow exceeds you expenses, it will snowball to riches

This concept is often translated into the 70/30 money system. This is a concept that defines what you should do with any income, after taxes.

70% goes towards your expenses to live.

The last 30% goes into three categories;

  1. 10% you give away
  2. 10% you save
  3. 10% you invest

With such a model, you will be able to live comfortable throughout life.



Another money system you can follow is Dave Ramseys Baby Steps.

This will guide you through the basic steps of getting your money under control, and build the necessary funding to sleep well at night.

Looking for a Great Read?

We have currated a select set of books we recommend you dig into. They will build your understanding and lead to new ideas, moving you ahead in generating Financial Freedom.

Eventually allowing you to have Plans For Anything!

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