Moolanomy’s Financial Success Plan, Introduction

By Pinyo, on April 28, 2009

Achieving financial success doesn’t have to be difficult. You can achieve it as long as you want it and work toward it. Unless you’re one of the outliers, the road to financial freedom is a long one. As such, it’s best to bring along a good companion and have a road map to guide you toward financial success.

Photo by San Francisco Sun via Flickr

In this article, I want to introduce you to my version of this road map — yes, there are many, e.g., Dave Ramsey’s Baby Steps. This road map is called Moolanomy’s Financial Success Plan and it contains information and ideas that I have learned by studying other people, financial plans, and books. It contains practical information that I learned on my own financial journey. And I hope that you’ll use this as the starting point for your own.

Moolanomy’s Financial Success Plan

Here is the outline of my financial plan. I’ll briefly explain each step below.

1. Turn On Your Financial RADAR
2. Earn more and spend less
3. Get out of debt
4. Start an emergency fund and plan
5. Save, invest, and borrow to achieve your financial goals
6. Protect your finances against risks
7. Build wealth and give
8. Leave a legacy

It’s worth while to note that you should go through step 1 through 4 in sequence, but step 5 through 8 could and should be started in parallel with the rest of the steps. For example, you could start working on ways to make more money, buy insurance coverage, give to charity, etc. any time you want.

Another thing you should note about this plan is that I am a conservative person by nature, so you won’t find any crazy ideas, get rich quick schemes, or ideas only experts could accomplish. In other words, the plan will be easy enough for anyone to follow and will give you the basics that you need to get you on your way.

Basic Overview

1. Turn On Your Financial RADAR

Before you start any trip, there are some basic preparations that you need to make. This first step covers some of the basic financial principals and gives you some tips on how to get started on your own financial success journey.

Read more: Turn On Your Financial RADAR

2 Earn more and spend less

Improving your finances is really as simple as the old cliche “spend less than you earn”. Once you can get your expenses and spending habits under control, everything else — e.g., paying down debt, building wealth, etc. — will be that much easier to accomplish.

However, you can only take it so far with cutting expenses, so the second part of this step is looking at ways to earn more money — especially by building alternative income streams and shifting from active income sources to passive ones. Overall, this step shows you some practical expense reduction ideas and covers various concepts around income building.

Read more: Earn More And Spend Less Is Your Ticket To Financial Freedom

3. Get out of debt

Being in debt is like trying to win a race with one foot on the accelerator and another on the brake. Whether they are good debt or bad debt, they are costing you money.  As such, one of the early step toward achieving financial success is to get out of debt. I am not planning to introduce yet another get out of debt method, since there are already many good debt reduction plans that you can follow. The important thing is that you follow one.

Read more: Get Out Of Debt For Good

4. Start an emergency fund and plan

Once you’re debt free (excluding your mortgage), it’s time to start building your wealth. But before you can do this, you need to have an emergency fund and a good emergency plan in place. This is your “Get Out Of Jail Free” card — always good to have one around.

Read more:  Build An Emergency Fund To Avoid Financial Crisis

5. Save, invest, and borrow to achieve your financial goals

After you get all the basic stuff out of the way, now it’s time to get serious and work toward your short-term and long-term goals. This step discusses saving for retirement, college savings, saving for a down payment, etc. And yes, you may need to borrow to achieve some of your goals.

Read more: Save, Invest and Borrow To Achieve Your Financial Goals

6. Protect your finances against risks

Uncertainties and risks are your biggest enemies. They can throw you off track and destroy your progress. However, there are many ways to mitigate these risks and prepare for uncertainties. This step covers financial risk management ideas and concepts.

7. Build wealth and give

Now that you have your various financial goals covered, it’s time to build wealth and give. Building wealth just to have more is a hollow act, and there’s no point in that. The ultimate wealth and success is how you can positively affect the lives of others.

8. Leave a legacy

Regardless of how rich or poor, we are all mortal. This step covers various things you need to do to prepare for that final day.

Well, that’s the outline of the plan and a short description of each step. Please let me know what you think. As I mentioned in my earlier post, I am learning too and your feedback is greatly appreciated.

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Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

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