RSM Australia

Fundamentals of Financial Success | Pillar 1 – Manage your cash flow

With all the noise in the media and the constant barrage of headline-grabbing news around recent superannuation changes, it’s easy to feel overwhelmed and even confused about how all this will affect your personal financial success.

Financial commentators and journalists have had a banquet of events to spin, flooding the regular press and social media. Locally we’ve arguably had some of the most far-reaching changes to superannuation in 10 years, talk of an asset price bubble growing and low wages growth.cash flow

Offshore we’ve had FBI investigations into Election tampering with the whispers of impeachment of the US President; the Euro in crisis and under threat of unwinding; geopolitical concerns created by the threat of nuclear action by North Korea; slowing growth in China plus increasing instability in the UK with their very unconvincing election result. The list goes on.

With all of this to deal with, finding the time and the energy to focus on your own financial goals and objectives can appear all too daunting.

However, regardless of your stage in life, stepping back from all of this “white noise” and focusing on the fundamentals of wealth creation and protection is important.


Even if it’s just to reassure yourself that you are on track, or maybe in a position to take advantage of any opportunities that may present themselves.

Well-structured finances can help keep you on track when the markets seem to lose all sense of direction and ensure that you’re better protected should an event, international or local, impact you directly.

Regardless of the economic and political backdrop, you find yourself in, or the state that the media paints of the markets, the following Six Fundamental Pillars detailed in this series will provide the strength and support to your financial plan.


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#1 - Manage Your Cash Flow

There is a reason for the saying ‘Cash flow is King’, because without steady and reliable inflows in your household, or business, neither can be sustained.

Cash flow is the first fundamental pillar to your solid Personal Financial Plan which is why ensuring that you measure and monitor inflows and outflows of cash is important. Over time this habit can help you better prepare for the future with evidence to help guide your future spending and direct you toward your savings and investment goals. This is often referred to as a ‘Budget’.

The old adage ‘Anything that is Measured Improves’ is very simplistic still rings true when trying to get ahead and create wealth now and for the future.

The simple act of monitoring your cash flow and working with your household financial budget can help reveal exactly where your hard earned income is going and explain the reason for your financial position relative to your financial objectives.

Those daily lunch purchases, frequent coffee hits, unread magazine subscriptions and the like, all add up and can detract from you achieving your financial goals.


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NOW AVAILABLE

pillar #2 - Protect Your Greatest Asset –You 

One of your greatest assets you’ll ever have is your ability to generate an income, which is based on your ability..

View part 2  -  here >

 


For more information, contact your local Financial Services team today.



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This article has been prepared by RSM Financial Services Australia Pty Ltd ABN 22 009 176 354, AFS Licence No. 238282.

As everyone's circumstances are different and this article doesn't take into account your personal situation, it is important that you consider the above in light of your financial situation, needs and objectives, and seek financial advice before implementing a strategy.

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