“Master your cash flow®.” It’s just four simple words, but, taken to heart, it’s a concept that can change your life in ways you could never imagine!

In fact, until you become the master of your cash flow you’ll never have full control over your financial future. And if you don’t have control, someone else will.

So where do we begin? By the time clients come to see me, many have made a lot of poor financial decisions: Some have made disastrous ones. From avoiding debt at all costs to putting all of their eggs in one basket (such as real estate or stocks), most people have a hard time seeing the effects of poor decisions.  They feel out of control and just know they are not making it financially.  Retirement looks far off if not impossible to reach.

Savvy business owners view cash flow a lot differently than most and you can too. They think in terms of profit, of the bottom line. Every decision they make is made with that goal in mind.  They don’t “hope” that the bottom line is there, they target and make it happen.

And about the cash flow needed for your current lifestyle?  It is not even close to how you wish to live.  So why do you keep on putting off doing something about it?  Like to know you will keep on going to work forever?  I didn’t think so.  So, you have mastered your profession.  Now Master Your Cash Flow®.

Unlike “goal-based” financial planners, I’m a “cash-flow” financial planner. Cash is king, right?  It’s a lesson I learned the hard way early in my career when I was failing financially, and it’s how I help others avoid the same mistakes. I teach you to look at every aspect of your life to find more cash flow.  And I find plenty.  Like it did for me and the thousands I have dealt with over my career, you reach financial independence earlier, working less in life and you get to live the life you want, not only in the future, but along the way.

To master your cash flow, there are three key areas you’ll want to be on top of at all times:

Know what you’re spending

If you have no idea, you’re not alone. Many people I have dealt with, who you might consider very smart –– lawyers, doctors, business owners and even CPAs! –– have no clue what they’re really spending. But without this key piece of information, it’s impossible to create a sound financial plan. It’s like losing weight: you can’t begin until you know your current weight!

Start by looking at what you spent last month or over a three- or six-month period. If you need a CPA or simple software to guide you, it’s worth the investment. Now ask yourself, is what you have coming in adequate for covering expenses or are you borrowing to make ends meet? Or more importantly, is it enough to cover how you want to live, pay your taxes and save for retirement?  Knowing how make money and the decision you made to spend it gives me plenty of fertile areas to find areas of wasteful spending (virtually every time), but also untapped sources of investable cash. And this is not by cutting your lifestyle.  In fact, I am out to enhance that as I find more cash flow.

Without a careful eye on every transaction, it’s easy to miss out on enormous opportunities. One busy client who owned multiple properties was paying $20,000 for homeowner’s insurance thanks to a claim they’d filed several years back. We were able to reduce that bill to $8,000 –– with better protection! It’s not all that unusual, believe it or not.

Where is your money slipping through the cracks? Revisit this exercise annually. Betcha you will find money.

Make friends with debt

Being debt-free sounds great. It feels great! But the truth about debt is that it’s simply not black and white. Learn to use debt smarter.  Hey, Warren Buffet’s companies have debt.

If you’re carrying high-interest credit card debt, should you pay it off? Of course, you should as soon as you can. But what if you’re a business owner who’s paying off equipment as quickly as possible, say, over three years instead of six? If you’re putting large sums of money toward your home mortgage that could otherwise free up your cash flow, funding 401k and pension plans, you might be missing out on increasing cash flow by saving incomes taxes or leveraging your wealth now to invest and build new wealth.  At the very least, you may now have cash reserves.

Every time the market crashes, we see clients, even high-net-worth people, who failed to set enough cash aside to ride out the storm. Paying off debt is admirable, but if you’re paying it off at the expense of cash flow, saving, paying more in income taxes or smart investments, you could be sentencing yourself to working harder and longer in life and not living the way you want now.

So, if the fear of holding debt is holding you bac, from maximizing your wealth, it may be time to find out how to use debt smarter …..and safer.

Have a Bottom Line Mindset: Think like a business

Most people think of personal finance this way: They see cash coming into their lives each month and flowing back out through three main “funnels”, each funnel taking cash away.

• The first amount flows out through the tax funnel (taken out of every paycheck, poof just like that!).
• The second chunk flows out to debt or expenses that have to get paid (mortgage, car payment, credit cards).
• Finally, money flows out through the lifestyle funnel (food, entertainment, vacations, clothes and other everyday costs).

What’s left (if there is something left!) you can now put into savings, right?  Maybe not if you do not earn enough to pay all monthly expenses.  But hopefully, something is left over for your 401k or savings for retirement.  Does that sound backwards? For most it is daily life, but it is not right and well-run businesses don’t work that way!

Savvy business owners view cash differently, and you can too. They think in terms of profit, of the bottom line. Every decision they make is made with that goal in mind.

In terms of personal wealth, you need to create your own “bottom line” and work towards meeting that goal. Decide what you must have, after expenses, to save, invest, and build wealth. If you’re not quite making it, then either your spending or your income must be adjusted. Maybe a new job or a new profession.

Even high earners can find themselves in this predicament. By spending most of what’s coming in, cash flow can easily be strangled. So wherever you are in life, it’s always good to have a precise plan –– a cash flow bottom line –– that priorities YOU, the one who earns the money.

Without it, just hoping there’s enough left over each month, each year, will have you running in circles and getting nowhere.

I was lucky enough to master my cash flow that I reached my financial goals decades ahead of normal retirement.  I believe so strongly in mastering your cash flow that it’s the title I gave my book. Are you excited about getting in the driver’s seat now? Be in control of where you are going in your life… and work less years and get to your goals sooner.

If you’re ready to learn more about saving on taxes, investing, hiring experts to help, and building wealth, check out my book Master Your Cash Flow®.