How To Embrace Financial Abundance!

Ever wondered if leading a rich life is the same as being a millionaire? Do millionaires truly experience the joys of living? It might sound like they’re cut from the same cloth, but let’s take a journey into David Bach’s “The Latte Factor.” He reveals how you’re often wealthier than you realize and how you can make your hard-earned money work for you, instead of working solely for your money. Does it sound complicated? Don’t fret! We’re going to unravel this step by step.

To put it simply, you’ve got to establish both a starting point and a destination, just like when you’re using Google Maps for a road trip. You need a clear beginning and end to understand what you’re doing, or you might never reach your financial goals. In this case, your hard-earned cash craves clarity just as you do; otherwise, it has a tendency to “vanish” mysteriously, much like water, energy, love…well, pretty much everything.

So, it’s high time for a strategy. Of course, there are various strategies to reach your financial goals, but I’ve picked one that’s worked wonders for me and has the bonus of being enjoyable.

Let’s Play, Spend, Grow, and Give!

We’re going to create four different “financial pockets.” Personally, I’ve set up four separate bank accounts because the more organized, the better. We’re going to divide your incoming money into four categories: Play, Spend, Grow, and Give. The percentage you assign to each category depends on your income, but you’ve got to start somewhere, and only you know your monthly financial ins and outs. The key is having the courage to assign percentages and sticking to that arrangement every month. Secondly, make sure the Play, Spend, and Give accounts are nearly empty each month. Huh? Yes, I’ll explain why by the end.

Know the ‘Route’ of Your Expenses

Refer back to your income and expenses overview from ‘How to become friends with your Money’ and write down ‘Play, Spend, Grow, and Give’ underneath each other with some space in between. First, total up all your fixed/necessary expenses, and write that amount under the Spend account. These are costs that flow consistently from your income to these necessary expenses, like clockwork. You know these expenses; they’re clear, and you genuinely need them to live. These expenses have a ‘fixed route.’

The remaining part of your income will be distributed among the other three categories: Play, Grow, and Give. The Play account is meant for all your non-essential expenses. Nights out, coffee breaks, fancy clothes…everything that’s not vital for survival but adds the zest of life.

Let Your Money Grow

Grow is an essential and often underrated category. It has been the most crucial aspect of my life in recent years. Growing involves investing in yourself and, by extension, your future. Allocating money to yourself used to be a struggle for me. I often said, “No, that course is too expensive,” or “Wow, a €3,000 Masterclass? Where do people find that money?” Yet, I’d happily spend money on a nice coffee in town, buy a new snowboard, and dine out excessively. Apparently, my money had a route to the Play account, but not to Grow. Oops.

Investing is a fascinating and enlightening subject, and I’ll delve deeper into it in another blog. For now, what you need to know is that the Grow account is meant for recurring investments, like stocks, gold, silver, and cryptocurrencies. It’s also for your monthly savings account and supplementary pension. The latter may not yield much, but it provides a sense of security. Additionally, there’s an educational fund that makes you wiser and helps you learn how to lead your best life. Those are also investments in yourself. When it comes to making your money work for you, diversification is crucial, just like you wouldn’t bet all your money on red 21 at a casino.

The Secret of Living is Giving

Lastly, we have a wonderful category. Some people find it easy to buy gifts for others and have a cupboard full of great items for birthdays. However, they struggle with giving to themselves. Others prefer to save or spend on themselves. That’s where clearly designating the destination of your money is fabulous. The Give account is all about sharing your money with others. It can take the form of gifts for birthdays, but it can also mean supporting a meaningful project or helping someone without expecting anything in return.

All these categories are clear, and you’ve assigned percentages. Personally, I’ve set my Grow percentage higher than my Play percentage. I’m continuously working on increasing my Give percentage every time I earn more. Because everyone’s different, the percentages will vary from person to person.

You Are Overflowing with Abundance

As mentioned, there’s a crucial rule tied to this strategy. Your Play, Spend, and Give accounts should be nearly empty at the end of the month. Why? Because it’s a perfect way to learn that there’s always enough money. You’re teaching yourself what abundance feels like. You’re training your mindset to make money flow by constantly giving it a purpose. Suppose, for instance, you have 100 euros left in your Play account. You’d seek out a fun way to spend it. Go out to dinner or treat yourself to something nice. Not only does this give you a luxurious feeling, but it also provides peace of mind. You know that there’s a steady flow of money into your Grow accounts. So, you don’t need to worry about that.

Of course, you can review and adjust your percentages every three months. Perhaps you want more to go into your Grow account, or you realize that you’d like to allocate a bit more to groceries each month. In that case, you’d need to adjust your Spend percentage. A shortage should never occur unless your income decreases. In that case, you’d need to reevaluate your percentages. However, the key is to approach this task with discipline each month.

I’m a huge fan of ‘The Latte Factor,’ a book by David Bach. It explains why you don’t have to be rich to lead a rich life. Sounds great, right? I delved into it and came out with a treasure trove of great ideas. So if you’re looking for tips on how to live a wealthier life, then read “UNLOCKING WEALTH: YOUR JOURNEY TO A MILLION-DOLLAR LIFE!“.