NORTHEAST GEORGIA BLOG

Let me start out by saying that I’m no financial expert.  I’m really not sure there is such an animal, but if there is – it ain’t me.  Believe me – I have made my share of bad judgments and decisions over the years that would preclude me being any type of money guru.

So there – that’s my disclaimer.  Remember how much you paid for this advice…

Today’s economic climate is not temporary.  The old ways of creating wealth and generating revenue – basically they are over with.  Gone.  We have to be more organized, plan more, strategize often, and adjust everything we do on a constant basis.

Here are some areas I feel like everyone should really get a handle on:

1) Cash Flow. My personal opinion is that this is far more important than all of the others combined.  Forget the days of 9-5 with one source of income.  We need to be generating multiple sources of income at all times.  Those who fail to heed this advice do so at their own peril.

2) Net Worth.  Obviously if we create a substantial cash flow we can turn some of that into net worth.  I’m one who has never quite understood the significance of a nice balance sheet.  Hence the term “cash poor”.  I feel like if we do these other things right the net worth will follow by default.  Focusing on net worth can break an individual or even a small business.  Just let it happen and don’t focus on it.

3) Insurance. Catch 22.  We’re underinsured but we can’t afford what we need.  This is a tough one.  NEVER buy life insurance on anyone that doesn’t produce income (I do know that much).  Only buy term life insurance – that’s a no-brainer.  Keep very high deductables on your vehicles.  Make sure your health insurance will cover a catastropic illness.  Liability, renters insurance, and supplemental policies —- I would do lots of homework on insurance and take an expert’s advice.

4) Taxes. Tax issues are so difficult even an IRS field agent can’t figure it out from year to year.  Get a good tax professional and take their advice – don’t try to save money here.  Don’t do the $29.99 software deal.  Pay a reputable accountant their fee and don’t ever worry about Uncle Sam giving you a call down the road.

5) Credit. Keep it in good shape.  If it’s not in good shape – get it in good shape.  Put a plan together and work the plan.

I really feel like if we pay special attention to these areas – develop some common sense plans – set some goals and objectives – we can survive this mess.  At least we might be in a better position to navigate the roadblocks.

Good luck!

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