The Personal Income Statement
A personal income statement is a document which details revenues, expenses and profit or loss that a person has obtained a period of time.
Having a personal income statement allows a person to understand and analyze the income, expenditure and profit or loss (difference between revenue and expenditure) has been obtained for a period of time, and based on that analysis, to make decisions (for example, to reduce expenditure in particular item) or financial planning.
Also, a personal income statement allows a person to compare the results achieved in a period, with the results obtained in previous periods, and thus, for example, whether it is meeting its financial goals.
To better understand the concept and the usefulness of a personal income statement, see below how to develop and take advantage of one in three steps:
1. Income Detail
We must first make a list of all revenue that we earned over a period of time (for example, for a month, six months a year, etc..) Regardless of the time they become effective charges, For example, if we sold some assets, we record the sale, even though half of it just go to collect the following month.
Between incomes include: wages, business, investment, etc.
2. Detail costs
After detailed our revenues, we began to detail all expenses we made during the same period equally, regardless of when they are made the payments, for example, if we bought an asset, we record the purchase even though half of it just go to pay the next month.
Among the expenses include: food, education, health, transportation, clothing, recreation, services, interest, etc…
3. Develop personal income statement
Once we have the necessary information, we began to develop our personal income statement (preferably in an Excel spreadsheet).
Gross profit is for the sum of the income, while net profit is the difference between revenues and expenditures, there is no profit when revenues are greater than expenses, and no loss when expenses exceed income.
Doing Business Opportunities
Many people think that business opportunities are increasingly scarce, either because competition is increasing, it is impossible to compete with transnational corporations, or because everything is invented.
However, business opportunities are always present: the markets constantly change, needs change, tastes change, customs and habits change, and new opportunities appear.
Whether the market is in boom or crisis, there will be opportunities that could benefit from, and to better exploit these opportunities, see below a few tips:
Patience to wait for opportunities
The first advice is to wait patiently for opportunities, if we want to start a business or invest, but do not know what business or where to invest our money, rather than force things and invest in something that we’re not so sure that will successful, we must be patient and wait for a good opportunity.
But be patient and wait to see a good opportunity not mean we should stay with his arms folded and wait, but we must be alert to the emergence of opportunities, but we must also look.
To do this, we must remain attentive to market changes, new trends, the emergence of new trends, the emergence of new needs, changes in the economy, etc.
And while we await the emergence of an opportunity, we can keep improving our ability to finance and other business issues, so that, as is this a good opportunity, we can make the best possible way.
Act as soon as possible
We must have patience to wait for business opportunities arise, but as soon as they appear, we must not waste time and act as soon as possible.
As it presents a good opportunity, many people try to analyze it thoroughly, trying to gather as much information as possible and try to anticipate all possibilities, to the point that always end up finding an excuse for inaction or, worse, leave the opportunity ends up being used by another person.
So the recommendation is that appears as a good opportunity, we gather information about it, analyze it, prepare and act in the shortest time possible, without attempting a full analysis, gather all available information, or provide for all possibilities.
And for this, we rely mostly on our instincts, and know that once a decision is taken, there will be time to gather more information to better prepare, or to make corrections as necessary.
Act despite fear
With the emergence of an opportunity, many people are dominated by fear, and waiting for it to decide to leave or that in any case, reduce, to the point that, as in the previous case, end up wasting the opportunity.
As this advice is that even if we are afraid at the time of having to take a chance, if your instincts say it is a good opportunity, we must act and take it without waiting for the fear to leave or decline.
We must take a little courage, dare and act despite the fear, knowing that it is usually only present at the beginning, and gradually will fade as we put into practice our idea.
Do not wait for the right time
Many people who are a good opportunity and that already have an idea that allows them to take advantage; often decide to wait for just the right time to start putting into practice his idea.
You may sometimes have to wait for the opportune moment to act, but in most cases, timing is always the moment is how to seize an opportunity.
So whether you want to start a project, start a business or acquire an investment, rather than wait for the right time, the recommendation is that we try to act as soon as possible, probably decide to wait for the right time, it never come.
Do not pay much attention to others
Most of the good opportunities are not obvious and, in most cases, to seem foolish, for what is common to hear criticism or discouraging comments from others when one intends to take a chance.
And what is worse is that many people end up ignoring these critical and discouraging comments from others, and eventually miss good opportunities.
As the last advice is that as soon as a good opportunity, rather than listening to the opinions or comments of others, listen to our own instincts, and seize the opportunity, knowing that most people who achieved success with a project rare, always heard these criticisms at the time.
How to Invest My Money?
Once you have saved enough money, there’s probably time to start investing, that is, to use the money saved on a vehicle or investment vehicle that allows us to make it grow.
If you’re in this situation, we present below a brief guide that shows you step by step the proper way to start investing your money:
1. Ready to invest
The first step is to prepare for investment, which does not mean you have to become a professional investor, but simply familiarize yourself with some financial terms related to investments such as profitability, risk management, diversification, etc.
Also, if you have not yet decided where to invest your money, you should familiarize yourself with some of the vehicles, equipment or existing investment alternatives such as business, real estate, stocks, mutual funds, etc.
2. Find an opportunity to invest
The next step is to find an investment opportunity.
To do this, you should be aware of market changes, new trends, the emergence of new needs, changes in the economy, investigate the market, find and interview contacts, and more.
The higher your preparation has been the subject of investments, the better prepared you will be to identify opportunities.
3. Gather information
Once you’ve identified an investment opportunity, you must gather all possible information about it.
You gather information about their characteristics, their potential for profitability or returns offered, the characteristics of its market, its market projections, the status of the asset owner (if you have one), etc.
A tip here is that it seeks to gather all possible information on possible investments, but without wanting to end come to know all about it.
4. Analyze investment opportunity
After gathering all possible information about a possible investment, you should analyze it and determine whether the investment is really an opportunity.
When analyzing an investment, you should determine as accurately as possible their profitability, their performance, recovery period and risk capital, and thus whether the investment is really an opportunity.
A tip at this point is not to take too long to analyze a potential investment, trying to anticipate all possibilities, because you could fall into what is known as “analysis paralysis” and get to miss the opportunity.
5. Invest
Once you have discussed the possible investment and you’re convinced that this is really an opportunity, the next step is to invest.
If the capital that accounts do not suffice to seize the opportunity, you could find an investor or a partner who wants to invest with you.
Or in any case, seek financing and a loan to the bank or any financial institution, or to family or friends, but always making sure that you will be able to pay the debt on time.
6. Continue investing
Finally, the product earned money on your investment, you must reinvest and increase your winnings, and / or use it to acquire new investments.
A tip here is to diversify, i.e. do not invest all your money in one investment, but distributed in different investments to minimize risk.
If you concentrate all your money in one investment, you run the risk that the investment get bad results and lose all your money or most of it, however, if diversified, so you can get to lose your money, more of your investments should having bad results at the same time.
Business Plan in 9 Steps
What should you include a business plan that captures your attention? After talking with several investors, all of them said the same thing: If he catches me in less than three minutes, the plan is good. That is, all investors give you an attention span of a few seconds for them to sell your idea. To do this, do your business plan or business plan in 9 easy steps. Do you think that is not enough? Entrepreneur magazine offers longer alternative. But if you do it longer is because you want….
A good business plan must have:
1. Give it a name: the name of your business idea should be attractive. Do not leave anything to discard. Take into account your type of business. Is it a private company public, a project? Is small, large, medium?.
2. Geographical situation: where is your business idea? Will you carry it out in your city or another?. Will an international project? If so, describe all the places where will your business.
3. Project Description: Try to describe your project in a concise manner. Put in this paragraph all products or services that claim to have your company and your main view (where you want to come). Even if your idea is very simple or very complicated, try to draw it so that it is more understandable.
4. Description of the target: Set if individuals or not, if a local, national or international, housewives, business (large, medium or small), public sector, etc… …
5. Highlight the added value of your business: This step is very important. Here you must show why your company is better than the others. Think about this: What gives your business that will make others earn (money, time, comfort, quality …)? If I do win something, and that way, you’re the only thing I can offer, I’ll buy.
6. Vision: Describe where you want to go. Many times the end is what justifies the means.
7. Describe the team: A business must always be initiated by someone. Describes who is leading the project, even if you’re the owner. For example: Who / is promoting the project is / are (and describe the qualities of the person or team, for example, are an experienced team of information technology and management teams.) Mario Diaz, a graduate in Economics from the University Juan Carlos I, with more than five years of experience in…….. Sara Bosch, has a degree in Computer Science and MBA from ESADE, with over 7 years experience in computer programming business.
8. What do you need and what you have? It is the first thing they’ll ask. Many entrepreneurs go with the idea of asking, but rarely mention him by fear. Concisely describes what you need your project to be initiated. And do not talk about money, but concrete things such as: For the opening of the business need two seats, one in Madrid and one in Buenos Aires. To function properly, we created an intranet and CRM crossing our services and customer base. Investors know how to calculate the size of the project, even without figures.
9. Investment required and Recovery: Describes the initial investment by breaking down the most important: local, empowerment, equipment (or computer equipment), maintenance and development of equipment, staff costs, other.
Tips for Getting Out of Debt (I)
Because the facilities that exist today to access credit, and a growing trend for consumption today, the debts are a problem that afflicts many people.
There are certain debts known as “good debt” that are helpful and even necessary to grow financially, for example, debts incurred to buy a home, to start or grow a business, or to purchase an investment.
But other debt, known as “bad debt” do nothing but prevent us grow financially as well get in a state of tension, for example, debts incurred by loans or personal loans for consumption.
If you are currently many “bad debts” and the situation will become unsustainable, then we show you some tips to help you reduce your debt or out of these:
Calm down
Getting to accumulate high debt may mean for many people an overwhelming and stressful situation, but to get out of debt is to relax the first requirement.
This requires you to put you in the worst case, i.e., think about what is worst that could happen, and know that whatever happens you’ll ever a place to live or at least know that never will go to debt prison.
Only with peace of mind is possible to have the clarity necessary for thought on how to reduce debts and therefore, instead of worrying about your debts, you get to devise a plan to get out of them and put into practice immediately.
Failure to continue to acquire more debt
If you want to reduce your debts and leave, you should certainly keep digging deeper, that is, you should certainly continue to acquire more debt.
You must resist the temptation to acquire more debt for consumption, and get into the habit of buying in cash and no credit, you must learn to buy after getting the money, not buy and then get it.
If at any time you do not have enough money to buy something, simply must not do, unless it is an emergency.
Control the use of credit cards
Due to its ease of use and high interest rates they charge credit cards are probably the main cause of the problem of debt that afflicts thousands of people today.
So if you want to reduce your debts or leaving, another important tip is to learn how to control the use of your credit cards.
This implies being aware that the credit cards should be used only in cases of emergency or out of trouble, and not to be charged as food, clothing or entertainment.
Some advice about credit cards are cut all the cards except one, pay them month for them to use, and pay on time to avoid late payment charges and increased interest.
Make a plan to get out of debt
To do this, the first thing to do is to list all debts you have right now, and with each debt, noted how much the interest rate that it costs each.
Then you specify how you get the money to pay those debts, for example, allocating 10% of your total income.
And then determine how you will pay the debts, for example, if you’re starting to pay more than those that are costing you (those with the highest interest rate), or by those with the lowest balance.
