3 Examples of Financial Success Systems for 2021
No doubt it is the desire of everybody to achieve financial success in 2021, having been faced with Covid-19 which has affected the world in its entirety. For some, they want to increase their financial success while some are yet to achieve financial success but are working hard to achieve this financial.
Whichever category you fall into, you need three financial success systems which will determine how slow or fast you achieve this financial success are they are elaborated below.
1. Capital Preservation System
The first step to take in the process of financial success is earning additional income. The income you preserve for yourself is what creates wealth. To be able to achieve financial success, it is advisable that we save more and spend less. Sadly many today tend to spend more of their income than save them making them become unstable financially. To be able to persevere your income you must consider maximizing two main components namely; investment and savings.
Savings: you can maximize your saving component by saving a large part of your earning monthly. It is advisable to maximize your savings by at least 1% of monthly.
Investment: there is no investment without saving, so what does investment entail?. Investment is a calculated action of allocating the income saved in a well-strategized manner in order to attain the predetermined goal, that of making a profit in return.
Secondly, be assured that the money saved and invested does not suffer any future loss, which is why you need to be guided in your investment as it is unwise to venture into unguided investment. These investments must be set up in a way that makes room for future deposits to take advantage of cost averaging.
2. Capital Multiplication System
Capital multiplication system is one system that maximizes wealth, though our achieving great wealth through savings and investments has its limitation, as it is dependent on personal effort. You need to go beyond our personal efforts and setting up systems like Leverage which can maximize wealth.
What you should know about Leverage
Leverage refers to a person’s capacity to engage in a one time work and be paid for life. It also involves carrying out a particular job in a certain location or place and having it spread over the country and the world at large.
The possibility of leverage depends on the right system of distribution, good media platform and finally the right relationships. The limit to how much money you can earn depends on your ability to build your own leverage system. Let us illustrate this to get a clearer understanding of what leverage is;
We are considering two persons in two different professions, acting and teaching. In teaching, one is confined to a classroom and is required to teach the same thing to different students continuously. No doubt the person in the teaching profession creates value by solving the problem of ignorance through education.
In this case, the teacher is isolated from the wider society while he makes his own earnings from the direct effort he puts in teaching students. Undoubtedly, his leverage is low as their income is limited but the value created is very high. This means that value needs leverage to create massive wealth.
Now let us consider the person in the acting profession. A person who is into acting dedicates days, weeks, months and in some cases years in shooting and producing a certain movie. Unlike the teacher that keeps repeating the same thing for a lifetime, the actor will not have to act the movie again.
After the movie has been produced, it is now marketed and distributed all over the country, he is also watched in the theatre, DVDs, cinemas, making a ton of money from selling the movie. Through the movie, the actor now becomes very popular, thereby creating a solid fan base which increases the level of his popularity.
Now comparing this two persons in the different professions, we no see that the actor only worked once and is paid continuously, probably for a lifetime, he now has greater leverage coupled with value than the teacher. So we now see the importance of leverage Which goes beyond personal efforts and value.
3. Multiple Income System
This type of system consist of three primary components namely; source of income, main income and finally type of income.
• Main income
N/B: if you spend more of your main income than you save then it means that you have a low-quality income, but if you save more than you spend, then the quality of your income is high. As such it is only a high-quality income that can make you wealthy.
• Source of income
Some people have one source of income while others have multiple sources of income. If you intend to fast-track your financial success, then you need to have more than one source of income. Having more than one source of income gives you high chances of saving.
• Type of Income
Under the types of income, there is passive and active type. Passive income is the money gotten from investments while active income is the hard-earned money gotten maybe at the end of the month or weekly or daily, in exchange for services rendered.
To be able to achieve a solid financial success, you need to ha e a strong passive and active income, and your chances of attaining financial success can be fast-tracked by depending on the passive income instead of active income.
If you are among the millions of people who are yearning to achieve financial success in 2021, the three systems needed to achieve a solid financial success which has been discussed in this article, are just what you need as the year 2021 will soon be ushered in.