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RESPONSIBLE FINANCIAL BEHAVIOURS

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RESPONSIBLE FINANCIAL BEHAVIOURS

 

Have you ever wondered why all flights will reach its destination except those that were struck by disasters? It is because it has all its necessary flight destinations, plans and resources before it takes off. As such, knowing your destination is of paramount importance in every venture, if you want to hit your target. Similarly, these practices and principles can be applied to achieve your financial success with much certainty.

 

 

 

Know Your Mission

 

Knowing your financial mission is the first step in reaping its outcome. Be it financial independence, freedom and richness. It is rather a journey per se as you may reach each stage of financial success at a certain timeframe. It too has accumulative effects over time.

A mission is a foundational guide in the establishment of your own existence in this world. You will then develop vision, strategies and model to attain your pre-set financial mission.

Keep digging deeply into your heart and be curious to ask how can you improve from where you are currently?

However, if you have not discovered your financial mission yet, then I advise you to follow your passion. Listen more often to your inner voice. Take courage to initiate with a small scale if you are unsure. Slowly and surely you will discover your mission ultimately.

Once you know your mission crystal clear, you will endure whatever comes along your journey to attain it no matter what. Your mission will pull you through those odds and barriers you may face. By pushing yourself, overcoming those barriers will definitely be comparatively harder.

 

 

 

Mission/ Purpose

 

What financial mission can do for you? A financial mission or purpose serves as a guide for all of your financial decision-making process.  All your stakeholders are generally the target of the mission as you will make decisions and tasks that are best align with your financial mission. Thus, a financial mission offers insight into what is primary financial purpose. How you will make full use of your resources to attain your pre-set financial mission? Some have financial missions, while others make people around them as their focal point. Others use a mission to point out more altruistic intentions that ultimately lead to financial success.

 

 

 

Relationship to Vision

 

Vision are very often confused or used synonymously with mission. Mission serves as the boundary you set for your financial whereas vision offers you a direction how you are going from your existing status to next higher level. A vision may also provide a direction for the individual in the next five to seven years ahead.

A vision most likely will include a certain perspective of individual’s core values, beliefs with  also closely link with their individual commitment to integrity, transparency, openness and other core values.  It may also inspire people surrounding them and given them a sense of purpose.

Example

On Money Tells Stories website, its mission effectively conveys intentions to groom people to achieve sustainable value creation. Its vision goes into more in-depth of its values and includes the phrase of making a difference in the lives of people. This phrase ultimately means that it will help to groom individual in value creation in its strategy. Its vision also notes a desire to be the leading authority in financial literacy fields globally.

 

 

 

Relationship to Strategy

 

What is Strategy? Strategic planning is the process of developing your objectives, strategies and tactics to achieve your personal financial mission. The individual generates short and long-term objectives using the mission statement. Objectives may include financial goals, relationship, personal improvement and development.

Next, it develops strategies to accomplish objectives. For instance, better education, learning and relearning are strategies to achieve higher personal fulfilment and satisfaction. Actionable steps or tactics are then developed accordingly. Leveraging on external resources is a tactic tied to personal satisfaction goal and the improvement strategy.

 

 

 

Begin with the end in your mind

 

Using the above metaphor of flight plans, it is best practice that we always begin with the end in our mind. This not only ensures that we will reach our destiny, but also will be more efficient in using all our available resources.

 

 

 

Start with best and positive practices

 

Just imagine what it can do for you as if you already reached that level. Your action and habit will act accordingly. You will slowly and surely mould yourself to behave in this manner as your mind cannot differentiate between real and imagine. Can you recall when you first begin to drive? How did you behave then? You could not even speak to anyone in your car. Why? This is because your mind would always be pre-occupied with the gear you were in, direction, those vehicles around you etc. My point here is deliberate practice make permanent progress.

It is clear that it is not how much you save……….., it’s the habit of saving that matters. Distinction of these above two phrases is of paramount importance in determining the chances of financial success.

Rule #1 “Don’t save what is left after spending, but spend what is left after saving.” Warren Buffett. More of us are more tempted to spend rather than save. Be mindful of the effectiveness of the advertisements as they are compelling us to spend. Moreover, peers pressure and other temptations are so great and powerful that most people will give in ultimately.

Most often, you heard about forced saving being employed to cultivate this financial responsibility habit. Knowing forced saving is painful and difficult to maintain. Why don’t start a good financial habit at an early stage and make it part of us.

By now, you should be able to rationalize the reason why we should spend what is left after saving. Set a small amount aside your monthly income now and consistently set a much higher amount as the time goes. By doing so, it is much less painful to save much higher amount at later stage.

Rule #2 “if you don’t find a way to make money while you sleep, you will work until you die.” Warren Buffett. You may then use your saving to invest for stronger growth by building your passive income that is sufficient enough to maintain your monthly expenses, if you want to secure financial security. Otherwise, your mission of financial freedom is definitely out of your reach.

Confucius favourite saying “If you give someone a fish, they eat for a day. If you teach someone to fish, they can feed themselves for the rest of their life.” This may not be accurate in today’s context. This is because water is contaminated or the shoreline is seized for development.

In order to solve these challenges, we need to equip ourselves with critical thinking skills. By equipping someone to think critically and be politically conscious, then whatever challenges, they can organize with their peers and stand up for their interest. This is especially true in today’s uncertain, volatile, complex and ambiguous world, where the rate of change is at a much faster rate than before.

 

James Oh money-1604921_1280

GOOD STUDENT TILL THE LAST DAY

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James Oh is a financial, wealth and mindset specialist, thinker, leader and intensive researcher with nearly 30 years of professional working experiences in various industries such as trading, construction, aviation, movies investment and distribution. He can be reached at jamesoh2003@yahoo.co.uk or jamesoh2003.blogspot.com