Are you someone who prioritizes managing your monthly cashflow diligently to ensure financial stability and enjoy life’s experiences? Or are you driven by the pursuit of building wealth, increasing your net worth, and securing a strong financial future? Join us as we embark on this financial exploration. This blog will helpi you discover which mindset resonates with you. We will also give you tips on how can strike the perfect balance between the two for a prosperous financial life. Let’s dive in!
Cashflow Committed Mindset
Are you someone who takes life as it comes, not worrying too much about the future? This is for you!
Have you ever felt sad because you couldn’t buy something, but end up taking a loan or using a credit card to afford it? It happens to a lot of people.
Here’s a simple way to think about it: imagine truth as a debit card – you pay first and then enjoy later. But a lie is like a credit card – you enjoy first and then have to pay later. It’s easy to get tempted by things we want right now and use loans or credit cards to buy them.
This way of thinking is all about focusing on short-term money and managing what we have now. It is not about building long term wealth. We might take loans for houses, cars, or use “Buy Now Pay Later” cards to get what we want immediately.
But we should be careful because relying too much on future money to pay for today’s things can lead to trouble later on. Life is unpredictable, and unexpected expenses can pop up at any time.
So, as we go through life, let’s try to find a balance between enjoying the present and preparing for a secure financial future. Making smart choices with money now can lead to a better tomorrow.
Networth Committed Mindset
Imagine having a financial mindset solely dedicated to securing and growing your wealth. It’s like having a laser-like focus on building and safeguarding what you own, ultimately leading to a strong net worth. But what exactly is net worth?
Net worth is a simple concept – it’s the value of everything you own, minus what you owe.
In other words, it’s the difference between your assets and your liabilities.
When it comes to buying anything, you have a committed mindset that revolves around building your net worth first. You prefer to use your accumulated wealth to make purchases rather than relying on future cash flow. Consuming things only happens when you have the money available, and if not, you are comfortable deferring the purchase for the future.
Change in Mindset
Taking on debt for purchases makes you uneasy, as your internal design is to prioritize acquiring wealth and being in full control of your financial future. Your focus remains on building and preserving wealth before using it for any significant expenses.
If you look closely, you will realize that the cashflow-committed lifestyle is becoming famous for the last 2 decades in India. Before 90s, the culture of buying things on loan and paying in the future was almost non-existent in the common man’s life. You first saved for things, built your wealth, and only if you could pay for it, you bought it. So everyone was forced to be a net-worth committed investor.
However, in the last 25-30 yrs, the culture of buying first and paying later has gained popularity and we are nudged to become a cashflow committed investor from all directions. Easy availability of loans on anything and everything and the peer pressure to match the lifestyle of friends circle along with rising aspirations and low control over one desire is the reason that most youngsters today are becoming cashflow committed investors.
When a person does not create their wealth creation on time and when their desires are more than what they can afford, it’s natural that one will turn out to become a cashflow-committed person.
How To Create Wealth
- Establish clear financial objectives: Define your financial goals and aspirations. Having a clear vision will guide your actions and help you develop a roadmap for success.
- Monitor and analyze your expenses: Keep track of your spending habits to gain insights into where your money goes. This analysis will enable you to identify areas where you can reduce expenses and allocate resources more effectively.
- Develop a budget: Create a budget that aligns with your financial goals. This will help you manage your spending, allocate funds strategically, and increase your capacity for saving.
- Invest wisely: Explore investment opportunities that align with your risk tolerance and long-term objectives. Investments can generate passive income and contribute to the growth of your net worth.
- Prioritize debt repayment: Focus on reducing and eliminating high-interest debt. By paying off debts, you free up more of your income for saving, investing, and bolstering your cash flow.
- Embrace a frugal lifestyle: Live below your means by practicing mindful spending and prioritizing needs over wants. By keeping your expenses in check, you can save and invest more, accelerating your journey toward financial independence.
By implementing these tips, you can nurture a net worth mindset build your wealth over time, and ultimately achieve a cashflow-oriented approach that brings you closer to your financial goals.
One way to pace up the process of building wealth is by investing your savings in secure assets like Fello. Fello is a simple and easy way to save and invest your money, and it makes the process fun and rewarding. Fello is a great avenue to develop a saving habit. The rewards make saving fun, and the investment opportunities make saving even more rewarding. Fello is also a great way to protect your money from inflation. By investing your money in Fello, you can grow your money and keep it safe from the effects of inflation. With prudent investment decisions and patience, you can work towards achieving your financial dreams with these rewarding assets.