Turner & Hernshow

Savings-The 10% rule

Save at least 10% of your nett income.Start by assuming that any revenue, remuneration or monies you earn is 90% of your actual pay.This ensures that you shall tuck away the rest.For instance, if you earn a take-home value of US$ 100, redeposit US$10 in a savings account and consume US$ 90.

For business entities,  open a savings account. Withdraw  between 5% and 10% of each payment you receive and deposit this amount in a separate account. These funds will play an  important role in maintaining a emergency workin capital fund.

Budgeting and planning

Learn to prepare a monthly budget.Where certain expenses require lumpsum payments such as education fees, holidays and insurance, break these down to a monthly expense.For instance, if your anticipates medical insurance premium  amount of  Kshs 24,000/= (US$ 400) annually, divide this amount using the 12 calendar months and deposit these instalments in a savings account.

For business entities, this adds value to your end result.Periodic budgeting aides management to create targets for their revenue staff and cost ceilings for their administrative staff, consequently affecting their bottom line favorably.

Foodstuff and beverages

Learn to adjust your culinary budget and eatin lifestyle whenever your cash flow becomes unfavorable.

Take red and white meats for instance.This takes up at least 60% of the cost any meat meal.Therefore, alternate between vegetable and meat proteins.Vegetable proteins such as beans and green grams are healthy- and you get to achieve the same end result!

Healthy food is always less tasty, less attractive (take arrowroots and baked bread for example as a breakfast option).Cost effective cooking methods are ordinarily undesireable such as boiling food rather than deep and shallow frying.

Shopping-The disciplined purchaser

Avoid making purchases that you have not budgeted for or the urge to "take advantage"of sales and discounts unless you had intentions to purchase them.When shopping, do not exceed spending more than 10% of what you budgeted for.

Lifestyle

Limit your entertainment expenses.Plan for outings and luxurious holidays.Fit these expenses into your annual budget to avoid ad hoc trips and escapades.

Investments

Avoid get-rich-quick schemes  and pyramid schemes.Invest your savings in portfolio fund organizations with solid foundations such as institutions that are registered by your central government and continually monitored by a government authority or body.For short term investments, fixed deposits and savings accounts with nominal interest rates offered are ideal.Long term investments include real estate projects, shares from the stocks and bonds market without expecting returns in a period shorter than two years.

For business entities short and long term investments available are similar.Depending on its liquidity position, prudence should be exercised.

Timing - "speed kills"

Time is a free resource.It can also be your most expensive one.

Centuries ago from Eygptian wall encryptions, to Christian Bible references, it has been proved time and time again that one should never rush to make financial plans or run a business entity without taking every aspect of one's personal or business financial decisions through a thought process.

For instance, get-quick-rich schemes and pyramids have resulted in financial blunders for many worldwide. "Sweet deals" benefit clever originators of such grand projects.The saying "easy come, easy go" is wisdom gained from mistakes made over the centuries and through generations.

Every successful and financially stable individual or business in the world today has a similar story to tell - Rome was not built in a day. Take for instance Bill Gates, Sir Richard Branson and Warren Buffet, some of the world's top business moguls today according to Forbes magazine of USA.Their stories are similar.Each have slowly,painstakingly but successfully generated their wealth.You can too.

South African World cup 2010 fever

Just before,and during the World cup (between 11th June and 11th July 2010), football lovers were inclined to spend without any planning for the love of this game.Soccer has resulted in financial woes for some,and has created disputes between spouses to many. Equipment such as flat screen televisions, state-of-the-art sound systems are purchased without much planning.Be careful and remember, prices of these items always recline substantially after tournaments end.Be patience.

Food for thought

1.The top fifty wealthiest businessmen and women practice the same eight basic principles on wealth generation.Find out more from us on these pillars of wealth.

2.There are five proven principles of multiplying money you may use today that were in use centuries ago, including the Babylonian times when gold was used as a money medium (today, local and foreign currency is our medium).

Practice them.Your bank balance and overall wealth shall grow.

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