However, your business doesn’t need to be a billion-dollar business before you start noticing a difference in your bank account. With these financial habits, you will ensure your wealth will improve dramatically.
Motivational Financial Goals
Goals are as important as a budget and for the wealthy, they differentiate themselves but not just having standard business goals but by creating financial goals. Writing a list and making the habit of reviewing them every day will provide entrepreneurs with a clear direction every day and clarity about the actions you must take to improve your business and personal wealth.
Spending and Saving
Not having a clear plan when it comes to spending and saving can be the biggest failure of a business and entrepreneurs. Not having clarity allows for confusion as to what finances are allocated to what founder and CEO of Savology, Spencer Barclay commented on the importance of having a clear plan “The problem stems from the fact that many of us simply don’t track where our money is going, which can undermine the financial goals you’re working toward. Serious budgeting means planning ahead for how you will spend and save your money and then tracking every expense. When you are cognizant of your spending habits, it becomes much easier to keep them in check and contribute more to your savings goals.”
Alternative Income Sources
According to figures from the book “Rich Habits”, 65% of all self-made millionaires have a minimum of three sources of income, and 29% have five or more income sources. The numbers show that by diversifying income not only is it possible to increase wealth, but entrepreneurs can reduce their personal financial risk by not having all their eggs in one basket.
To increase wealth investing any extra money once expenses have been paid can be key to fuelling growth. Many chose the strategy of buy and hold to generate passive income. Investopedia, a long-term study of this strategy covering the years 1926 to 2010 found an average 12.1 percent annual return for small stocks and a 9.9 percent annual return for large stocks.
CB Insights state that 42% of new start-ups fail mostly due to the lack of market research. Market awareness directly impacts the success of your business and your personal finances. For example, a change in interest rates could greatly alter long term costs for taking out a loan for a business venture. This can also affect spending on the market, influencing buyer habits.
Monitoring the market will allow you to plan and react accordingly to any developments, something as little as changing pricing in anticipation of a market change could help you avoid incurring major losses.
These habits are essential for entrepreneurs and must be exercised in the long term with a strong mindset.
Image source by Goalcast