USE YOUR BANK ACCOUNT TO CREAT WEALTH

When you start out down the road of entrepreneurial success, one of the last things you are thinking about is preparing your books for the tax man, via the accountant. But if you organise your bank accounts and credit cards well, not only can this help your wealth creation activities, but it can save you a lot of money at the end of the year.I needed a blueprint on how to design a supportive environment using my bank accounts.
One that would be almost automatic, one that would "work".The first glimmer came when I read a great article by US life-coach Mike Neill called the "Freedom Fund" which was just perfect for employed people who want to leave their job and start a business. It covers setting up your bank account as if you were already self employed and Mike kindly gave me permission to reproduce part of it in this article.Then, over Christmas I was reading Mary Hunt's book "Debt Proof Living" (which is excellent by the way), and she goes into bank accounts in great detail. A light bulb moment. Wow! I realised that if you combined this stuff with Mike's Freedom Fund tip, it would be a great blueprint for how to set up your bank accounts to be a support system, a new "environment" to help you evolve into your new financial lifestyle.So here it is, with thanks to Mike Neill & Mary Hunt.__________________________________________________________________10 Steps To Financially Intelligent Bank Accounts - Part #11. Start with creating a Freedom Fund.So you want to be self-employed . My bank manager says that most companies fail because of a lack of profit or bad cashflow management, so let's see if you can run your company finances right now, as if you had already started.Look at what you typically earn now, per month, and then think about that as the total income for your company (as if it existed already). Then think about what realistic amount you could manage on, if you cut out some unnecessary luxuries.
Think about this amount as your "salary" to yourself. Aim for paying yourself a salary of 80% less than your company's gross earnings (your current monthly income).Set up a high interest deposit account with 90 days notice for withdrawals, transfer your monthly income over, to be paid into the new account, and set up a standing order to transfer the 80% - your new salary - into your usual account. Live on that for a while. It'll be worth it because you are proving that not only are you a good boss because you can manage the company's money, but you will be creating a Freedom Fund. (www.freedomfactory.com)2. Paying "Upstairs" or Paying It ForwardAnyone seen the great film "Pay It Forward"? The concept is that you should always do great things for others in the certain expectation that your kind deeds will make an amazing difference to the world. And that, , in some roundabout way, via maybe fantastical and unlikely routes, a kind deed done by someone around the world somewhere else, will find its way to you. It's a variation on the "Good Karma" theory, if you like.Most wealth creation experts agree that if you give or "tithe" a certain part of your income regularly, you will start to create abundance in your life. Mary Hunt says that "Giving teaches my brain that I have more than enough" and I agree with her that, when you give, you are starting to move beyond scarcity. When you live in financial scarcity mode, this is one of the hardest things to do. But it's a fact that all of the world's great wealthy people give. They give their time, their money, set up foundations and do a lot of fundraising. I am convinced that, if you want to become truly wealthy, you must decide right now that you will systematically give to others a set % of your income, no matter how tiny to start with. Do it by standing order or direct debit, out of your freedom fund bank account, but calculate it on a % of your 100% not on a % of your 80% salary. Create some freedom for others, from hunger, from abuse, from disease, from fear.3. Pay Yourself FirstIt's hard when you are struggling, to get your head around this next concept - Pay Yourself First. Robert Kiyosaki explains it very eloquently in his book "Rich Dad, Poor Dad".Poor and middle class people tend to pay everyone else first. They pay the government in the form of their taxes, the car loan company, the mortgage company, Sainsbury's or Tesco's for food, the garage for car repairs, off-license owner for wine at dinner, even McDonalds for the kid's Saturday afternoon jolly. Paying everyone else first.So why are those people or companies more deserving of your hard earned money than you? Especially the government. Did you know that, if you are employed and paying PAYE, you are typically working until April every year just to pay your tax and national insurance?Every time you hand over cash or write out a cheque, especially while you are not yet creating one of the Funds below, remember you are paying that person or company first, before you are paying you.Tip: A good figure to aim for here is 10% of the 80% or so that you have decided on, as your salary.4. Your Catastrophe Fund.