2 things you should know about managing your finances.
First things first... Why should you care?
All economies expand and contract. During these expansions and contractions, individuals and businesses should be aware of how to make healthy financial decisions. During times of economic expansion, everything is great! However, history has shown us that economies will also go through a period of contraction, where things can be a little tight, and we're forced to think differently about how we manage our finances. The information here can help individuals and businesses do just that. But, you have to be committed to having an open mind, learning, and taking action to see results.
Let's Get To The Point
Here are the key takeaways from this video:
Shift your thinking around the concept of income: There are two ways to increase your income - increase the money you make, or decrease your expenses. Managing your expenses is a great way to quickly increase the available cash you have on hand. Watch this video for some tips.
Watch what the government incentivizes: For example, the CARES Act includes a number of provisions that provide support for individuals and businesses. This video provides insight into a few areas within the CARES Act - retirement and financial markets. Many businesses have already benefited from, and continue to benefit from loans, grants, and mortgage deferments resulting from the CARES Act. These tools have helped individuals and businesses maintain or increase their income even in a slow economy. This point holds true regardless of what economic environment we're experiencing. Following the laws implemented by the government is critical to receiving the financial information you need to increase your income in a slow economy. Watch the video for some tips.
Check the following resources for more information:
Full Transcript
[The following is the full transcript of this episode of the What They Don't Teach You In School Channel. Please note that this episode, like all episodes, feature speakers that are often unscripted and unedited. Filmed in one take, the What They Don't Teach You In School Channel one of the most authentic and insightful channels that provide real ideas to help you save time, make more money, and improve the overall quality of your life. Don't forget to subscribe to our website for more free content like this.]
Donnie Thomas:
Hey everybody. Welcome to What They Don't Teach You In School, where we teach life. My name is Donnie Thomas and today we're going to be talking about how to increase your income in a slow economy. Now, here you'll find ideas that help you to do a few things. The ideas here will help you to save time, make more money and improve the overall quality of your life. So don't forget to follow us on social media, visit our website, like, share and comment on this video because that's how we've grown together as a community, by sharing with one another.
Donnie Thomas:
But before I get into the discussion for today, let's talk about why we even care about this topic. So today, we're living through a pandemic that has impacted us all on a global scale. Everybody is scared. Everybody is in a position where they're having to think differently about this paradigm shift. And many local, state and federal government agencies are coming into a posture where they're anticipating this social distancing posture through June of 2020.
Donnie Thomas:
And that's a lot of time for us to be dealing with the challenges that come with this particular pandemic. Now, in that time, we have to shift our thinking because if we don't shift our thinking, we can lose out in a major way. And that's what we're here to do today is to talk about how we think and act differently in these times.
Donnie Thomas:
So what are you going to get out of this discussion today? One, I'm going to share with you a different way of thinking so that you can shift your mind, because we are in a place where there's a paradigm shift that's happening. Never before have we seen or have I seen a situation where folks can't go outside or being urged to stay at home, and businesses are shutdown for an extended period of time. We can't even go to a restaurant and sit down and just enjoy those simple things in life. So this is definitely a paradigm shift.
Donnie Thomas:
So I'm going to be teaching you a different way of thinking. Number two, I'm going to talk about the CARES Act in the context of this whole thing and how it can benefit you. And number three, I'm going to share with you some tools that have helped me in slow economies like we experienced back in 2008. It helped me to really refine my thinking and to make sure that I am increasing my income and maintaining a certain level of living while experiencing these types of economic issues.
Donnie Thomas:
So, let's get started. First, I want to talk about how you think about the concept of income. When I ask you the question, how can you increase your income? What is the first thing that comes to your mind? Most of you are going to think about getting another job, asking for a raise or having some additional stream of income in order to increase the money that's coming into your home or your business.
Donnie Thomas:
But how many of you thought about managing your expenses? Not many people probably think about managing their expenses, but businesses do. There's this concept called net income that many businesses have on their net income statement. And simply put, your net income is your revenue minus your expenses that equals your net income. Now, there are only two ways to increase your net income that's by increasing your revenue, the money that you bring in or decreasing your expenses, the money that you are spending.
Donnie Thomas:
Now, when you're thinking about income with that perspective, I'll share with you a story from my own life. So as a real estate investor, one of the things that I do frequently, especially annually, as I do an analysis of all my expenses and one area that I look at is insurance. How much money am I spending in insurance?
Donnie Thomas:
Now, one year I analyze a few of my insurance policies and I found that I was paying more than I needed to for a few of my policies and through research and reaching out to the right people, I was able to save a $1000 for the year on insurance. Now, a $1000 may not be a lot to some of you. However, that's a $1000 that I was able to spend elsewhere to do something more important with rather than spending it on insurance, which I really don't use all that much outside of just making sure that I have that protection in place.
Donnie Thomas:
So that's a story from my life about how I analyze my expenses. And you can find out more on our website with the real estate investment model for wealth, but I won't get into that in detail here, because that's not really the focus of today's discussion and video. Now, how does the CARES Act fit into all of this? Well. The CARES Act is the bill that's been put in place in order to address the issues that have been raised by the coronavirus pandemic.
Donnie Thomas:
Now, many of you have been introduced to the CARES Act without knowing it. All you know is that you're going to get $1200 back as a tax rebate from the government and everybody's anticipating that. Well, there's so much more inside the CARES Act. It touches on individuals, benefits for individuals, small businesses, how you can use your retirement funds. It also touches on how the government plans to protect financial money markets, because the financial markets are the lifeblood of our economy. And I'll just touch on a few of those things a little bit more here.
Donnie Thomas:
Let's talk about that $1200. Well, the first thing to know about the $1200 is that everybody is not going to get it. The $1200 for the individual that you'll receive as a tax rebate phases out as you make $75,000 or more. So there are a lot of things within that particular provision within the bill that you need to be knowledgeable about. So reach out to your tax professional, whoever does your taxes so that you can learn more about how or whether or not that will actually apply to you.
Donnie Thomas:
But there were two other areas in the bill that actually intrigued me a little bit more, it was the discussion around retirement and how the government is going to support financial markets. So when I was looking at the provisions on retirement, one of the things that it states in the CARES Act is that it's going to remove the 10% penalty that many of us will face if we try to reach into our retirement fund earlier than what we need to. And that's huge for a lot of us, because there's a lot of money that is sitting in your retirement fund, that as a last resort, if things get really, really hard, you're able to tap into those funds in order to make sure you can meet the day-to-day needs of your family.
Donnie Thomas:
So reach out to your retirement account manager and ask them questions about how this provision would work or could work for you. Now, as far as how the government plans to support financial markets, there's a provision that speaks about the government being able to provide and put in place a guaranteed program for money market mutual funds. And this is huge because another way for us to make money is by investing it.
Donnie Thomas:
And so if you find yourself in more risky products like stocks, then you may want to diversify that by shifting your portfolio to have more money in your money market mutual funds. You can reach out to your bank if you have your money invested or you can reach out to other companies that allow you to trade stocks, and other kinds of commodities or bonds or things like that in order to see how this will impact you.
Donnie Thomas:
It hasn't been to my knowledge put in place today, but when it is announced by the treasury, it's going to be effective for the close of business the prior day that it was announced. So you want to be thinking about those kinds of things in terms of how you're saving your money as well. Because we do a very good job of talking about making money, but we don't think about saving money and managing expenses very much.
Donnie Thomas:
Now with all of that said, what are some of the tools that you can use in order to save you money and time? Well, there are a few things that I've used that I found beneficial. When we are talking about time, a lot of the things that have saved me time have to do with planning. So planning my budget as well as planning my time. And so mint.com is a free tool that you can use if you choose to that allows you to set up a budget for yourself, so that if you we'll go over your budget in certain areas, it will send you a notification to say, "Hey, you've been spending too much money in this area, you might want to slow down."
Donnie Thomas:
It also connects with your banks and other kinds of accounts, whether it be your electric bill, water bill, things of that nature, so that you can track your spending in those areas. And that's huge because it helps you to keep accountable for maintaining the budgets that you know you need to follow in order to live day-to-day.
Donnie Thomas:
Mint.com also does another thing where it helps you to find savings for those different financial products that are out there, whether it be insurance or credit cards, things of that nature if you need to find better rates. So it's a powerful tool. You can also use it to export your transactions that you make at the end of the year, so that you can do your taxes or provide that information to your tax professional that is preparing your taxes. So it saves you a lot of time, saves you a lot of money.
Donnie Thomas:
Another tool is monday.com. I cannot tell you how much this tool has improved my efficiency. Because again, it keeps me accountable for the actions that I need to take in order to be successful, in order to make sure that I'm following methodical steps to save money and to do the things that I need to do for myself and for my family.
Donnie Thomas:
Now, with that said, I'd like to really thank you guys for watching this video. I hope that it was beneficial for you. Don't forget to follow us on social media, visit our website for more information and content like this. Also, like this video, share this video and comment. I don't care what your comments are, good, bad, or ugly. I just want them to be beneficial to the community, because again, that is how we grow as a community. Have a good day.