Living Margin Growth
How much cash flow do you need to be financially secure, independent, or free?
For most people, your number might seem unusually large. But don’t get discouraged—saving a small percentage of your cash flow will create a living margin that will see you thrive for years.
If you harness the power of compounding – making your cash flow work for you – you’ll see incredible accumulation over the long term. It can be hard to see it, but with your number in mind, you’re ready to take the “moon shot.”
Managing your cash flow is crucial for implementing your plan, but many want to ignore the numbers or put it off until later. But it doesn’t matter how much you earn per year; you can always save a little to accumulate a living margin. It becomes infinite cash flow because you’ll have safe, secure access to resources in a risk-protected environment if managed carefully.
There are two phases of savings: accumulation, where you put cash flow away so it can grow, and de-accumulation, where you withdraw cash flow from your savings.
Put a percentage of your cash flow somewhere that will begin to work for you. Put this cash flow allocation into savings no matter what happens, and you’ll slowly start building your financial future.
The best way to set your cash flow into motion is to automate your savings. The key to success is not to see it in the first place because you’ll spend what you have. Instead, save now, and you’ll be able to reap the rewards later.
Figuring out what you want from life and setting up your financial (savings) goals to meet that desire will help you create a clear path and build a plan for financial freedom that works.
The “experts” say you should plan to allocate at least 10% of your cash flow towards your financial goals, although the living margin framework suggests 20% as part of your first fruit giving. Remember, the earlier you start, the bigger your margin grows.
Not all savings are created equal, so deciding where to put your cash flow is as important as the percentage you’re saving. By wisely allocating a portion of your cash flow, you’ll be able to grow your savings and get closer to financial freedom. Many people have a lot of money but spend their lives watching their bank account and miss out on a greater quality of life.
If you are like most people who are planning their lives, you want to be able to afford your child’s college tuition, care for your aging parents, and retire in comfort.
Most importantly, you want to feel secure and confident that your decisions are well-informed and educated when planning your financial future. There is a real solution for the day, and you can participate.
Most people use leverage. You may use leverage to finance a home, buy investment property, or start a business. So, it would make sense to leverage your cash flow to enhance your retirement benefits.
The decision to use leverage is driven by the idea that the money you contribute will grow at a higher rate of return than the cost of borrowing. And, at the very least, you enjoy the benefits of these purchases today.
If you’re concerned about your financial freedom and don’t think you’re saving enough, you will realize that the living margin strategy is a better way to protect your future. The ultimate result is more financial comfort than mere savings and traditional strategies alone.
A leveraged living margin strategy allows you to maintain your current lifestyle by combining benefits and retirement savings. Historically, leverage has been a financial strategy used exclusively by the ultra-wealthy because it offers more protection and the potential to earn more for retirement than could be obtained without it.
So, if you practice the principles of leverage, you’ll create your self-directed strategy and ultimately become self-insured. Managing your cash flow will enable you to enjoy more sooner and longer.