Personal finance can cover a broad range of topics, including saving, investing, debt management, and career. I definitely discuss them all here, along with other money-related topics.
Having said that, the thought came to mind that it’s good to sometimes ground ourselves in what’s important, how the process works, and in what order things occur. This got me thinking about how the category of income generation – be it from career, business, etc – is a foundation to our overall financial success.
Think about it, working backwards: before we can invest anything, we need money to invest. This is possible if we have savings. If we have savings, it means that we needed to have income exceeding our expenses. In order for that to happen, we needed to be making money in the first place!
Thus, as the foundation of our finances, we need to be earning money and generating income. Now, people that sponge off others or let others take care of them might not be attuned to this part, but doesn’t it make sense? We need income before we can save anything, and then in turn invest. Income is the engine that drives our finances.
Along those lines, I came up with the following 7 steps to protect and grow income:
- Get a good education. Enough of the notion that education is optional, or not important anymore. That’s crazy. Some people question whether it’s best to choose college or entrepreneurship, but I say that education is foundation for success and that many folks are looking for shortcuts.
- Continuously learn. It’s not enough to get a degree or even advanced degree(s) and say that we are done. Rather, we need to keep learning every day, and embrace the idea that every day brings new experiences and new knowledge to acquire.
- Protect your career. Make sure you don’t take your job for granted. Work to over-deliver and make yourself indispensible.
- Grow your career. Your career is probably what brings in the flow of money. If we want to increase cash flow, we need to go beyond protecting our job. Rather, we need to look for ways to become really good at what it is we do, get attuned to how things really work in business (or whatever field you’re in), and be savvy networkers.
- Invest in health. If you’re not healthy, you either won’t be able to work or your ability to successfully do so will be compromised. This happens as people get older, but many younger people simply don’t think of this or brush it off as a “someday” kind of event. Someday probably comes quicker than we realize if we don’t pay attention, so it’s important to be healthy and ideally energetic too. Even proper sleep and money can be related!
- Be insured. What if you can’t work, and can’t make money? Depending on what the issue is, insurance might be a financial life saver. You may want to spend the proper time focusing on protecting against losses – with disability insurance as a good example.
- Think entrepreneurially. At some point, it’s important to remember that we are all essentially unofficial “business entities” of our own, even if individual employees. We sell our professional services for wages. We are the product. We need to be able to keep that mindset and thrive as people, rather than purely thinking of ourselves as simply employees. Money can be made through different business structures with you playing different roles, be it employee or owner. Being flexible, adaptable, and ready to operate in different environments is important.
My Questions for You
Do you agree that income generation and cash flow are the foundation of personal finance success?
What are your thoughts on the list? Do you follow all of these?
Do you have any additional tips or thoughts to add, on protecting and growing income? I’m interested in what you have to say, and what you can share with readers.