6 minute read
Colours of Wealth
BY WHITNEY HAMMOND, CFP, CLU PRINCIPAL, SOVEREIGN WEALTH MANAGEMENT
Implementing Wealth Building Strategies for Business Owners and Executives for 25 years in Burlington, Ontario
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From starving artist toTHRIVING ARTIST
Red is a colour I can sink my teeth into as a wealth strategist. I love safety and security. In fact I love it so much that I do it for a living: building security for others, grounding them from their fears, creating strategies to move them forward, and avoiding pitfalls of tax erosion.
The colour red denotes wealth and ambition. Sometimes ambition is perceived as a bad thing: “Money is the root of all evil.” But is it? I can tell you I struggled with this. Messages from church, messages from society, messages from my subconscious, and then confusion around feeling worthy and deserving of money - “Is it ok to receive a commission from my clients?”
What holds us back from meeting our most primal needs of securityand survival? Furthermore, what holds us back from actually thriving?
If we truly believe in our service and creations, we are free to tell theworld, to share, to grow, and to build to receive. This is how we reversethe stigma that being creative and financial success do not go together!
Shift your Thinking
Money brings up deep emotions because it is linked to messages we picked up along the way from intergenerational to societal morals. Have you heard the parable “Money is the root of all evil?” or “Don’t sell your soul?’ These underlying messages can prevent us from earning and charging our worth.
Money is an energy. It is a tool to help us along the way. When money is earned, it is used to provide a standard of life for ourselves, our families, to create change and build legacies.
Red, the root chakra is all about balance. Let’s put our thoughts into balance. Talent is rare.
Being gifted is rare. These gifts have been bestowed upon us to be fruitful.
Try these new beliefs:
• Know your worth. As a limited resource, add 10x to the cost of your service.
• Know there are more customers than you can serve.
• You are built to do what you do. Be driven by red passion to serve all who you can.
• Be ready. You are the steward of your gift. Be fruitful.
• Creativity leads the world. You need to be in the game to play. Many will pay high dollar for your services. These people will energetically lead you to more. The more we can attract, the more we can create legacies in how WE SEE THE WORLD.
• Start with a vision. Those who have created change or wealth in our world, only started with a vision and a passion. Breed momentum!
Know your Burn Rate
There is a certain dollar amount that all of us need to live each month. KNOW THIS NUMBER.
This is the amount of money you will burn through each month to live. Let’s use 2 examples here.
An artist who needs $5000 per month to live and another artist who needs $10,000 per month to live because of overheads.
The $5000/month artist will need to know:
• How many items are needed to sell each month to bring in the $5000/month after expenses
• The cost of each item to buy or create.
• The amount of inventory needed to provide a continuous offer to generate $5000/month after expenses.
• How much income tax to put aside each month for the $5000/mo. income after expenses.
• How much rainy day money is needed to prevent stress should a month or a few months be slow. Mindset is everything.
• Add 10% in this number to be put aside into a savings bucket.
The $10,000/month artist will need to know a little bit more:
• That “bricks and mortar” are a fixed cost and must be factored into your sale.
• Your profit ratio on your service. For example: $100 sale will provide $70 of profit as $30 will go to direct overhead.
• Taxes and HST need to be set aside in a separate bucket. Never co-mingle this money.
• You are in business to make money, charge accordingly.
Create Money Buckets
We create safety and wealth by dividing our money into buckets. By having separate buckets and goals, the money will have a place to land. If there is nowhere for it to land, it will not flow in.
Money only flows to the amount we ask for. If we only ask for our bills to be paid, this is survival and this is all we will get. If we ask for abundance to fill out buckets and make us a good steward of this money, this is what will appear.
Be driven by your passion, not fear or just getting by.Create at least 3 buckets:
• Short term bucket. This bucket will hold funds for emergencies, a short month of income, to allow us to work from abundance.
• Medium term bucket. This bucket will allow us to use funds for our retirement one day. This is our “do not touch, no matter what” bucket. It also allows us to work from abundance.
• Dream bucket. This money allows us to dream and start building a fund for something that we want one day. This bucket can be expanded on the most. Remember this bucket when you are costing your product or service. There is a higher good. Daydream greatness into your life!!
Set up Systemic Withdrawls
Choose a small amount of money that you can afford and do it monthly. The absolute amount is not as important as doing it consistently every month.
• Money attracts money. I have seen over 35 years, that those who start to save pennies, build mountains of savings. An annual income need not be high to build wealth. Consistency is the key.
• Do not wait to pay off all debt. Start now. “Pay yourself first” is a priority here. Many of us tend to have some debt, waiting to pay off debt could delay you 40 years. Start saving today. Do it!
• “Make yourself broke” by saving. If we spend all of our money anyway, why not pay into our buckets each month before paying any other bill.
• Ask for help. No matter small your investment is, research has shown that we always accumulate more wealth, when seeking out the advice of a financial advisor
• Be proud that you are profitable. A bright self-esteem attracts more customers than any sales pitch or ad. Beam and Build!
Invest in Yourself
There is good spending and bad spending, just as there is good debt and bad debt.
• When spending your money, ask yourself if there is a return on your impending purchase.
• Will your purchase bring you a return on your investment?
• Mentorship is invaluable. There are many people who have paved the road before you and would be more than happy to show you the ropes. Always have one person ahead of you to provide a lead and one person behind you so that you can hold their hand to bring them forward.
• A good coaching program is valuable. When using a coach, use one who is from your industry. There are far too many coaches floating around today who are only too happy to take your money. Your industry leaders have stood the test of time. Buy from them. They will help you grow.
• Knowledge is power. You want this to succeed. Read, attend, learn anywhere you can to be able to get ahead and create a sustainable business: one that changes the lives of those who you deal with. Be the change!
Many of us are driven by fear, or by anger, or by greed and the best of us of are driven by passion and integrate this with sustainability to provide a service that is second to none.
It is time to reverse the stigma that being creative and financial success do not go together.
