When it comes to achieving your personal financial goals, the biggest variable in achieving them – is how strong your cash flow surplus is.
The basic components of cash flow are:
|(Household Income) – (Household Expenditure) =|
Resulting Cash Flow Surplus OR Deficit
If you do not have enough surplus cash flow, this may mean that you could fall short of achieving your goals, or possibly not achieving them at all.
If in the instance that you are unable to achieve your desired goals, some variables that may need to be adjusted are:
- Increasing your income
However, for most people this could be hard to do.
- Decreasing your costs
This also could be hard to do if the majority of your costs are linked to needs (essential items to live). However, if there is a large portion attributed to discretionary spending, this could be reviewed.
- Adjusting your personal financial goals
This could mean that compromises may need to be made if the above two variables cannot be changed.
Do you have the cash flow to start a strategy and achieve your goals?
If you feel that you may not have any cash flow to start such a strategy, then don’t despair – there may be other avenues that a financial adviser may be able to identify to help start building your assets (for example – restructuring your cashflow needs, tax reduction strategies where tax savings can be invested, debt restructuring…)
If you would like someone to help with identifying you currently cash flow situation, and also identify opportunities where you could release/redirect some cash flow to further build your assets, then please get in contact with one of our advisers.