15 Ways To Stabilize So Your Dreams Can Materialize


Set and Then Forget… (at least for a little while)

As an aggressive entrepreneur, I was ready to conquer the world at a very young age. My plan was to out-work, out-innovate, and out-run my competition at all costs until I was financially free.

I started a lawn mowing business… then a custom T-shirt business… and then a motivational poster business…
After several years of intense entrepreneurship, I had reached my mid-20’s… and I was still broke.

Stabilize Your Finances

Financial stability starts with steady income and low expenses, NOT with a great investment or the next great entrepreneurial idea. It took me awhile to realize this, but it’s only when you have a strong base to stand on that you can take big risks.

I always wanted to put risk before stability, but it’s actually the other way around. In America, we’re romanced by the stories of great entrepreneurs. We learn that you have to take risk to receive reward. What isn’t on the front pages is that most of these success stories started with a strong base. Without the security of stable finances to fall back on, these entrepreneurs wouldn’t have been able to weather the ups and downs of entrepreneurship and investment.

15 Ways To Stabilize So Your Dreams Can Materialize

1. Get/Keep Your Income… A Job is not necessarily bad

As a free spirit, I’ve always hated “workin’ for the man.” Every time I had a J-O-B, I dreamed about setting up a business and leaving that place behind. The feeling was overwhelming and eventually, I would succumb…

I’d put in my resignation and set out on my next business adventure. Unfortunately, because I’d jumped ship too early, I’d be right back at the job after several months.

Entrepreneurs: Don’t Jump Too Soon
As an entrepreneur coach, I see the same situation over and over again. People come into my office, ready to start a new life. They say, “OK, I quit my job… now what?”

My advice is always something they don’t want to hear:

“Try to get your job back…”

Realize that entrepreneurship is risky.

The Moat Theory
Risk is not something we want to take until we have a stable foundation. Mitch Stephen, a friend and author of the book “My Life and 1000 Houses” calls it The Moat Theory. Get your basics covered and surrounded by a moat before you set off over the draw-bridge with your horse and joust.

Then… if you’re not successful… you can just retreat back to your little castle, pull up the bridge, and regroup.

Financial Gravity
The fact is: you have a much better chance of being successful if you’re operating form a place of security as opposed to a place of desperation. It’s part of financial gravity… people can smell it when you’re weak.

2. Take Inventory… As Painful as it Might Be

The vast majority of people have no idea where they are financially. They might have a vague feeling of “I’m broke”, or “I’ve got some extra money”… but if you asked for their net worth or cashflow statement, they’d just give a blank stare.

It can be a painful process to pull together all of your statements and fill out a financial statement… but the end result is liberating.

Even if it’s bad news… at least you know where you are! Finally, you can start taking steps forward.

Here’s the gist of financial statements:

Balance Sheet
(Your Net Worth)

Add up all of your assets and then subtract your liabilities.

Assets (find the current value of the items below if you were to sell them today)
Home
Savings Accounts
Stocks & Bonds
IRA/401K
Life Insurance
Businesses Owned
Personal Property

Liabilities
Home Mortgage
Credit Card Debt
Student Loans
Auto Loans
Other Loans
Other Debts/Collections

Income Statement
(Income Minus Expenses)

Income:
W2 Income
Real Estate Cashflow
Interest Earned
Business Income

Expenses:
House Payment
Car Payment
Utilities
Insurance
Food
Entertainment
Miscellaneous Expenses

3. Increase Income/Axe Expenses until You are at Least $200/mo Cashflow Positive

Whew, that feels better…

Now that you know where you are, you can take the first step toward tightening up your finances.
If the bottom line of your income statement was positive… great! You can move to the next step (as long as you keep it positive!)

If your bottom line was negative, it’s important to get it into positive territory as soon as you can. Increase your income and/or decrease your expenses until you’ve got an extra $200 a month.

Be Strong
This is where #13 “Get Rid of Insecurities” really kicks in…

If you’re an insecure person, it will be hard to get rid of luxuries in order to be cashflow positive. You have to dig deep and realize that you are making short-term sacrifices for long-term gain.

4. Make a Pact Never to Decrease in Net Worth Again

Now that you’ve proven to yourself that you can maintain a positive monthly cashflow, it’s time to commit.

As long as you always make more than you spend, your net worth will always increase (provided you don’t invest in risky assets… see The Equity Goose and Cashflow Golden Egg)

Take time at the end of each month to fill out your balance sheet and income statement. Check to see that you have a positive number on the bottom line of your income statement and your net worth is higher than it was the month before.

Even if your net worth only increases by $100, you are always moving forward. It’s much harder to catch up from a loss than it is to make a small gain.

When you stabilize, you will notice that your net worth will begin to accelerate.

5. Pay your savings and bills the minute you get your paycheck

Here’s a tip that really helped me do away with “surprise” bill payments. Each time you get your paycheck, make the following transactions in this order:

1. Put at least $200 in your untouchable savings account.

2. Pay all of the bills you owe for that pay cycle.

3. Take out a budgeted amount of cash for all of the day-to-day spending you will incur until your next paycheck.

6. Build a $1,000 Emergency Account

I owe Dave Ramsey for this powerful tip:

Save up to $1000 in your “emergency account” before you make any other financial moves such as paying down debt or making an investment.

It took me awhile to “see” the wisdom (again, I was thinking too hard…), but it’s very powerful.

There is no way you can predict all of the expenses that will appear in your life. Most people spend every dollar they have, and when something “unexpected” happens, they have to borrow to pay for it.

Once you realize that “unexpected” expenses are a part of life… they will no longer be unexpected.

7. Get Your Credit Above 700

After you stabilize your income statement and put away an emergency account, you can start working on your credit.

DISCLAIMER: We’re not building credit so that you can buy more “stuff.” Credit is a fragile tool that we can use to buy income-producing investments.

There’s a complex formula (that’s way above my head) to increasing your credit score. Trying to figure it out will only confuse you. I would recommend finding a reputable credit consultant who can work on your credit on your behalf. (Be careful, there are a lot of credit repair scams out there.)

8. Focus on Building Your “Equity Goose”

Once you’ve built up to a 700 credit score, you can start building your net worth with assets such as real estate. The idea is to buy an asset such as a house at a discount, fix it up, and either rent or sell it.

If you’ve bought the asset correctly, you’ll make $20-40,000 every time you repeat this process.

Never Touch the Goose!
Take those chunks of $20k and put them back into the system…

Never live on the equity of your investments (the goose), only the cashflow (the golden egg).

Stabilize Your Life

I started this article by writing about finances. My intention was to keep your attention, not to suggest that finances are the most important part. Most people like the tangibility of financial advice so that they can apply in their life.

But, the reality is: your financial fitness often mirrors your social, physical, and spiritual fitness. If you’re struggling financially, it may be an indicator of an imbalance somewhere else in your life.

Even though these areas can be harder to measure than finances, ultimately they are the entire reason we seek more money in the first place.

9. Exercise at Least Three Days a Week

The easiest and most immediate way to see improvement in your life is to improve your physical fitness. All of the other areas of your life (including mental, social, and spiritual) are affected by your physical being.

The trick with fitness is simple:

Consistency is more important than intensity.

Getting some moderate exercise three times a week for the rest of your life will do more for your overall well-being than jumping into intense exercise cycles that will eventually burn you out.

A good book to illustrate this point is “The Compound Effect” by Darren Hardy. He points out that massive changes can be made in your life by making consistent, small efforts.

10. Realize that You’ll Be Fine No Matter What Happens

When I face great stress in my life… I always resort to something I learned early in my adulthood:

After all is said and done… you’re going to be fine.

Look back at times in the past when you’ve faced trials and tragedy. In the end, you were okay.

It takes an amount of spiritual maturity to realize it; but even if the worst scenario you can imagine happens… you’re going to be okay.

Take some time to ponder and meditate on this concept and it will free you to face life with more vigor and confidence.

11. Seek Guidance

As a strong self-determinist, I thought I could create wealth on my own through reading books and brute force… It wasn’t until I had a few years behind me that I realized the immense power of seeking guidance… and results started to follow.

Intelligence vs. Wisdom
I’ve always had a very strong intellect (I thought that was all that I needed). What I didn’t realize is that intelligence can actually be an obstacle to success without wisdom.

The difference between intelligence and wisdom is similar to the difference between leadership and management. To borrow from one of my favorite books of all time, “The Seven Habits of Highly Effective People” by Stephen Covey; the managers are down in the jungle, sharpening the blades, organizing a work schedule, motivating the workers, innovating new tree-chopping techniques…

The leader is the one who climbs the tallest tree… surveys the land… and yells, “Wroooong Jungle!”

Wisdom Comes From Experience
The reason it is so important to seek guidance is that wisdom cannot be manufactured through sheer brain-power alone. It can only be found in the minds of those men and women who have been there before.

The great thing is that it doesn’t have to come from your own experience… you can skip the learning curve if you are open-minded enough to listen to the advice of someone who has been successful.

Find someone who is in the financial, social and spiritual position you want to be in and ask them for advice.

Pride
It was hard for me to ask for help in my younger years because I let my pride get in the way. I wanted to become successful on my own.

When I started to seek guidance from people who where more successful than me, my own success increased exponentially.

The World Is Immense
I’ve had the blessing of being well traveled (I would recommend it to anyone). The more I traveled, the more I realized that the world is larger than a human brain can comprehend.

It is almost guaranteed that someone has faced the same obstacle that you are facing now… thousands probably have.

Instead of trying to figure it out on your own, it makes much more sense to learn the wisdom of those who have already overcome.

12. Set Your Intention

The easiest part for me was always knowing what I wanted… I read books on visualizing my goals and I became good at it. I was able to create the feeling of achieving the objective before I even began on the journey.

Having a clear picture of what you want is important to establish in the beginning. Take some time and imagine who you would like to be.

It doesn’t have to be some grand dream… If you’re having trouble with a goal, start with something simple like finishing a good book or smiling more at work.

Engrain it in Your Head
Once you’ve got an idea of what you want, it’s time to engrain it in your head by setting your intention. Realize that thoughts are fleeting… it takes real discipline to engrain a thought in your head. Here are a few ideas on how to set your intention:

• Write it down… the act of writing “crystallizes” your thoughts.

• Leave notes everywhere… on your bathroom mirror, computer monitor, steering wheel, etc.

• Meditate on it… clear your mind and visualize it as if it were real

• Keep a symbol in your pocket… every time you reach for your keys, you’ll bump into that rock or figurine

• Create a vision board… make a collage of magazine clippings symbolizing what you want to become

It’s important to “Begin with the End in Mind”, (as Stephen Covey would say); but it’s also important not to get stuck living in the future dream space. Once you’ve set your intention, set it aside and get back to working on your foundation.

13. Get Rid of Insecurities

Insecurity is a huge obstacle to success. Most people hold some level of insecurity in some aspect of their life. Those who learn how to manage and overcome their insecurities are much more likely to succeed.

A person who is secure with his or herself is able to give to others and create win/win relationships. An insecure person is always taking from others, attempting to fill a seemingly endless void.

Read “Sings of Insecurity” for more on this topic.

14. Participate in Your Hobby at least Once a Week

In today’s fast-paced society, work and making money consumes us more and more. Many people can’t remember the last time they took time to enjoy a hobby.

Taking time to shut off the work thoughts in your head and enjoy yourself “resets” the neurons in your brain, making you more efficient when you return to work.

When your brain is always engaged, it becomes weaker.

Read “The Power of Full Engagement” for more on this topic.

15. Take Time Each Week to Visit with Friends and Family

What good are possessions or experiences if we don’t share them with someone?

The relationships we make and maintain are the greatest investments we can make in our lives. Be sure to spend quality time with loved ones as a part of your weekly schedule.

In Conclusion…

When working on personal development, it can be tempting to jump straight to the more glamorous activities such as investing, entrepreneurship, and shooting for the stars.

None of those things matter unless we have a stable base to stand on. Start by stabilizing your life and finances before you move on to more aggressive investments.


Choose the tip size:

77 Responses to “15 Ways To Stabilize So Your Dreams Can Materialize”

  1. Angela October 9, 2012 at 10:09 am //

    Excellent post! You’re right Brian I think sometimes we aim for all the other stuff but stabilization is the key! Excellent and well written post! Thank you!

    #

  2. Marce - The Success Advisor October 15, 2012 at 3:07 pm //

    Nice blog post, what I find more interesting in a JOB is that you can have your money in your bank account each month, regardless the effort you put into it. That’s not bad but I agree that you are forced to feel the “lack of freedom” and that alone can hold you back, specially if you don’t like restrains. There are plenty of ways to accomplish a successful life, and according to my own experience, in a period of our lives is good to have the experience of a JOB and a boss breathing in your back telling you what to do.

    But only to have the experience, following Robert Kiyosaki’s teachings you will not want another fulltime job in your life, and I agree that you should seek your personal success in life, whereever it is.

    #

  3. Moyo @Inspiration for Living October 26, 2012 at 8:14 am //

    The theme is diligence. Personal development requires being able to do what you need to do to get the results you need in life.

    #

  4. Cherise St. Claire November 7, 2012 at 5:46 am //

    It’[s true start with stabilizing your life first and all else will follow.

    #

  5. Deepak Kr. Das February 5, 2013 at 11:15 pm //

    Really, awesome article. You are absolutely right entrepreneurship is more about your spirit and less about your actions. Sometimes, we get inspired to someone and decide to quit our jobs or take other foolish decisions. But we forget the real objective of entrepreneurship which is to achieve financial freedom. So before taking any foolish decision emotionally, we must analyze our situation, so that we can keep up our journey during hard times. Thanks for sharing such practical and valuable piece of advice. I found this blog just today and it is already subscribed in my browser. This is some of the most genuine self development sites, I have ever read. Keep it up!

    #

  6. Renaud Gagné February 14, 2013 at 7:40 pm //

    That is a great article. I have done the same mistakes…counting on my luck to pay the bills and overly optimistic in my income projection. The Habit of Saving is paramount to any long lasting wealth.

    Thank you

    #

  7. Maggie Amada February 20, 2013 at 9:25 pm //

    Wonderful post. I think it’s worth noting that whatever you do in life, even in entrepreneurship, steady wins the race. Making big moves every so often won’t get you where you want to go in much of anything. This applies to corporate stair-climbing, exercise, relationships, finances or even writing. Paying attention to markets, doing homework, doing research, listening to those with experience and working consistently works. It can be very difficult to do this while holding onto other obligations and there comes a point where a choice must be made. But, before that, it pays to prepare and plan, get as far as you can.

    #

  8. John March 11, 2013 at 8:09 am //

    Today it’s not easy to stabilized yourself. All answers come from within. Look for signs and pay attention to your gut feelings. You’ll hear two inner voices when you need to make a decision. The quiet voice is your higher self; the loud voice is your ego. Always go with the quieter voice.

    #

  9. Joe March 23, 2013 at 9:39 am //

    Great post. But I would add one more important aspect. Trusting and valuing other people. I have never worked for anyone many hundreds have worked for me and I would have struggled to achieve what I have without them. As a leader we must reflect on why we chose to be independent and create for our workforce an environment where they can feel empowered, respected and rewarded for their abilities.

    #

  10. Joe April 6, 2013 at 6:19 am //

    I would ad one other comment here if I may! There is a big difference between being an entreprenneur and a businessman/woman. Entrepreneurs are ideas people who often need businessmen to run the outcome of their skill. That is why I valued those who worked for me someone had to follow, picking up the paper as I rushed headlong to the next venture.
    There is the old guideline which says, save 10% of everything you earn. Then you will never miss it. A friend developed on this; when we were all at university we were all short of money so why not save and invest everything you earn in the first year after graduating. It just means one more year in student mode but gives a cussion for life.

    #

  11. kayla May 7, 2013 at 2:27 am //

    This is a great article. I have done lots of same mistakes. The Habit of Saving should be practiced for life long.

    Thank you

    #

  12. Steve Hayes May 17, 2013 at 8:59 am //

    That is a great article… I have to tell you that I am a big believer that your dreams can come true if you work hard towards your goal. Visualization can play a major role as well but in normal circumstances you will still have to do what you have to do.
    Nice blog by the way.

    #

  13. Martin June 7, 2013 at 1:16 pm //

    Great tips, very helpful. “Realize that You’ll Be Fine No Matter What Happens” very powerful when realizing that.

    Rgds,
    Martin

    #

  14. Peggy June 14, 2013 at 11:06 pm //

    There are some seriously great tips here. Thanks so much for a great blog. I am going to share this with both of my sons who are currently trying to understand how to mix dream chasing with survival and more! I am so glad I found your blog. You have a dedicated new fan here today!

    #

  15. Tamera June 17, 2013 at 10:32 pm //

    This was a great post! Thanks so much for sharing. I especially loved the part about not quitting your day job before you start making some income on your new business. It’s so tempting to quit your old job right away but it’s not the smartest thing.

    #

  16. Martin Poldma July 31, 2013 at 9:41 am //

    Great post, thanks for sharing.

    It is always a good idea to prepare for anything that might happen and have something always in our savings account, unlike many others these days, being just one paycheck from being broke.

    #

  17. Manifest Your Desires August 1, 2013 at 6:24 pm //

    What a great article. I really appreciated all the steps to becoming an entrepreneur and think that this information is very wise in its ideas as far as not leaving your day job too soon and building an emergency account, just some of the great ideas in this article. Keep up the good work.
    Chris

    #

  18. Joaseph Dabon August 22, 2013 at 9:35 pm //

    Great post and advice. I feel sad though because I am retired and penniless. Looks like I missed the boat in a grand way.

    #

  19. Dilpreet Bhatia September 30, 2013 at 8:23 am //

    Wow.. THanks a lot.. You saved me from quitting.. A very well thought article… every step makes sense to me now :)

    #

  20. Joseph Dabon October 10, 2013 at 9:27 pm //

    I like the intelligence and wisdom thing. I call being bright and being smart. In all my years of working, being smart always wins in the end.

    #

  21. GT November 22, 2013 at 9:14 am //

    Glad you found some value…

    #

  22. GT November 22, 2013 at 9:22 am //

    I feel for you. It’s tough out there, and getting tougher for retired people.

    #

  23. GT November 22, 2013 at 10:22 am //

    Thanks Chris!

    #

  24. GT November 22, 2013 at 10:23 am //

    Amen.

    #

  25. GT November 22, 2013 at 10:29 am //

    Learned that one the hard way!

    #

  26. GT November 22, 2013 at 10:32 am //

    Thanks!

    #

Trackbacks/Pingbacks

  1. Stabilize First, Don't Lose Your Footing on Life - Personal Finance Round-Up - July 17, 2011

    [...] components stable enough to use as a foothold toward your dreams?Genius Types, in a post entitled 15 Ways to Stabilize So Your Dreams Can Materialize, discusses in depth some of the things you ought to do in order to prepare your life to pursue your [...]

Leave a Reply