Is There a Simple Money Management System (MMS)?

Warren Buffet said, "Don't think that you have to be wealthy, before you can be an investor. You have to learn to be an investor, before you can be wealthy".

In other words, you don't have to have lotsa $,$$$,$$$ before you need to manage it. You need to manage it before you get lotsa $,$$$,$$$! Simple? Yes! But how many of you manage your money ... properly? Do you have a system to manage your $$$$$?

How much money do you receive over your life-time? Well, at least over your working life-time? For the majority you, it will be over $1,000,000! Wow! That's good news!

What's the bad news? You will spend most (if not all!) of the $1,000,000! How can this be? Indeed, how can it be?

But don't you agree, that oftentimes, truth is stranger than fiction? How can you personally check this out?

One way is for you to note your daily expenses for 30 days. Every single expense. Including credit card purchases.

A simple way to check other people's expenditure, in a roundabout way, is to check their bank balances.

Of course no one is going to show, (or allow you to check) their bank balance. But you can just (discreetly ... or like 007 ... your choice!) go to any automated teller machine (ATM), and collect the balance print-out slips. These are readily retrieved from the waste basket, or (not that many, though) from the tops of the ATM machines.

Check the balance slips. One set of slips - just after the beginning of the month. Another set of slips - just before payday at the end of the month. Can you please report to me your findings through the 'comments' on this blog?

The simplest Money Management System (MMS) is called E-S-I system. This requires you to separate your income into three separate items (or bank accounts!).

E = Expenses = 70% of your income.
S = Savings = 10% of your income.
I = Investments = 20% of your income.
Simple? 'Do'able? You doing it?

T Harv Eker has another (more sophisticated, or advanced, or complicated, ... depending on who you are?!?) system. There are six separate accounts or items, instead of the three for E-S-I system. It is the N-F-P-E-L-G system. For your easy memory retention, is it ok with you if we call it the NeFiPELoG system? Thank you for your kind agreement.

The six accounts are:
Ne = Necessities = 50% of your income
Fi = Financial Freedom = 10% of your income
P = Play = 10% of your income
E = Education = 10% of your income
Lo = Long-Term Savings for Spending = 10% of your income
G = Give = 10% of your income

T Harv Eker is 'a multi-millionaire many times over' (... I heard it right from the horse's mouth!). So if he says that the above is the key to your financial success, do you think we should have a debate with him?

The moral of the story? You are aware of friends or neighbours who earn more than $5,000 a month but who are broke (run out of cash before the end of the month! ... they love the month of February...hehehe!). You also know friends or neighbours who earn $2,000 a month but have cash left-over to be used the next month. How come the difference in results?

As T Harv Eker says, "The habit of managing your money is more important than the amount".

I wish you Success in your undertakings, and Good Health and Wealth to you and your family. Take care!

P.S. I read yesterday about a guy (in thirties or early forties) who experienced having his last $4.50 to be spent with his kid at McDonalds, and also of having his car reposessed, after having lost his job. He appeared to have had a very well-paying job before that. I do not know his exact background when he experienced all these 'sad situations' or 'traumas', but have you known your friends or neighbours being in similar situations? Hmmm ... care to share/comment? Thank you.