The Financial Trap

I escaped my first financial trap around 1980 by selling separately my business, my business premises and my house

I cleared my overdraft and had about £15,000 left over. The position was the dire economic situation in the 70s with the 15% interest rate on the overdraft when I was running my printing business. The reason was I didn’t pay enough attention to my cash flow and relied on the accountant who was really only interested in the ‘records’ rather than the business itself.

The second time I fell into the trap was more recently when I wasn’t paying attention to what was going on – cash flow again. Too much going out on credit cards who were giving me massive credit limits, and only short term temporary income coming in. Sadly, global influences brought an end to this, not my ‘fault’ but I should have been watching, and I ended up taking on an Independent Voluntary Arrangement to (IVA) pay off the debts.

I’m now coping with another type of trap, living on a fixed income. To get out of this I have to reestablish, rebuild and grow my business if I really want to be who I want to be and do and have what I really want.

You, and I, and everyone else are in some sort of financial trap. Even the so-called ‘rich’ need to closely monitor, or have someone do it for them, their day-to-day finances. I’m doing it now and it only takes about 15 minutes a day to keep my finger on the pulse. If you don’t, and don’t have someone you can trust doing it for you, I can assure you from experience it will go horribly wrong.

Money is a fickle thing and really doesn’t like being mistreated, ignored or taken for granted, Money likes us to pay attention to it and more than anything else to ’move’ it, to circulate it, to pass it from one experience to another.
What money dislikes most is to be locked in a box, saved for rainy day, the Universal Law of Circulation requires money is circulated. What comes in goes out. What we need do is manage the circulation. Manage what goes out so what comes in matches it.

My financial traps have generally arisen through running businesses which should provide a lot of control over what I do. Most employed people probably aren’t in this situation having less control, particularly over their income.
When I was employed briefly (for nine years, out of nearly 60), I was fortunately quite well paid, so it didn’t occur to me I was in a financial trap, I was more concerned with other traps, more of which later. Now I’m ‘retired’ on a fixed income, I’m becoming more aware of the situation this can present.

There are answers to financial traps. Most are generated by some form of ‘fixed’ or limited income, whether it be employment, a business or a pension. We can of course (in the case of the first two) make arrangements through an Independent Financial Advisor (IFA) to generate additional funds, but this really needs to be done much earlier in our lifetime than most, I’d say no later than 30 to get the best benefits. But even this ends up with a fixed (albeit higher) income.

You and I have to do ‘something else’ to rectify or avoid the situation. Bob Proctor who I was privileged to meet and work with a few years ago was adamant about the potential solutions. We need to find or develop some form of additional income.

There is a limit to what we can do in a day, so an additional ‘time for money’ income isn’t the answer. We need an additional ‘passive’ income which doesn’t depend on the time we devote to it – and there are lots of options.
Bob called it ‘MSI’ or multiple streams of income and there are a vast number of choices you and I could adopt.
• Write a book or books, and there’s more than one style od book to consider – more of this another time.
• ‘Network marketing’ now be careful here because there are many rubbish NM/MLM companies around. I won’t go into the details, but the better ones can be extremely lucrative. (Ask if you want to know more, I did this for nearly 20 years).
• Investment, a very wide field ranging from property to crypto – provided you make the right choices! (Again, let’s talk about this).
• Social Media – if you’re fairly active, especially on YouTube, you can generate significant income ‘on the side’. I’m not an expert in this but I know people who are.

There are lots more but if you really want to escape your financial trap, and we’re all in one of some sort, then you and I need to address this right now.