You heard me right. Stay broke but don’t be poor. I know you must be wondering what is the difference between broke and poor. There is a big difference between broke and poor. When a person is broke, the person is lacking sufficient resources. But, when a person is poor, there are no resources at all.
Being broke is not bad. What is bad or worse is when someone is poor.
For your information, I got this analogy from Grant Cardone’s book, ‘The Millionaire Booklet’. It is all about increasing cash flow and building wealth. Someone can be broke, but never poor.
Staying broke for most people (including me) is a financial strategy for attaining financial freedom in the long term. It is just temporary and sometimes advisable. Staying broke means having to follow your tight monthly budget, you are not in a rush to attain riches which means you don’t eat your proceed but reinvest whatever income you get into yourself and your business for the long term.
This analogy is for wealth builders and if you don’t agree with me, you ain’t part of the club. You must have heard of countless stories of athlete and entertainers who were earning a huge sum of money but years later were filing for bankruptcy. There are so many stories of athlete that became poor after a big paycheck.
They started by buying expensive toys, throwing parties, making wrong business decisions and going for expensive shopping.
If you check out Wikipedia for famous people that became bankrupt after winning a big contract, you will see that there are people that made a huge amount of money but chose not to stay broke.
Please, don’t get me wrong. I am not telling you to start living like you don’t have money. Staying broke involves discipline. It is the mindset of focusing 95% of your time in building assets rather than flaunting money to impress your peers. I don’t have time with how much I generate monthly, I focus my mind on my asset column.
I constantly ask myself questions like, ‘How can I grow my asset column?’ ‘When should I add another asset to my asset column?’ So many online entrepreneurs want to show off immediately they start making good cash. This is where they get it all wrong. The first stage of your business is not the time you should start flaunting what you have. It is the time to remain on your budget and reinvest into your business.
Aspects of staying Broke
- Cash Flow Plan
This is one aspect where you need to stay broke till you reach that Warren Buffet or Bill Gate stage of life. As a person that strive for financial independence, you need to be able to give an account of your cash flow. Know where every dime is going. Send every dime an errant. Money that doesn’t have a task assigned to it get used in the wrong expenditure.
Tracking how you spend your money keep you away from financial trouble. Money that hangs around with no purpose gets spent, wasted, or blown. You should work with a budget to stay broke. I personally use an app to track what I do with my money and it helps me stay on track financially.
- Delay Gratification
When I started making money as a freelance writer, I would spend my surplus anyhow because I did not budget for it. I saw every surplus as my money that I can spend on anything I like. That was a big mistake I was making until I realized it. I did not see it as money I could save or reinvest it on myself or business.
I was always balling out with friends. Trying to impress friends to let them know that I was making good money. I was not staying broke and unfortunately, I became poor with no asset to back me up.
Forget about impulse buying for now. Leave your life and don’t try to impress people that don’t care if you are making millions. Put whatever surplus you make out of your business back into the business to create more revenue stream.
Go get more big clients. Success demands constant grinding until you start making 6 figures from your assets with 10% input.
- Increased Income
Income matters when talking about financial freedom. Remember, to stay broke is not a forever plan. So, as you are at the stage of staying broke, increasing your income should be an exit plan. When revenue increases, business succeed. Look for how to increase revenue in your business and not how to spend the income coming on the only revenue stream that you have.
- Sacred Accounts
Hey, do you make extra income in your business? Put that extra income into a sacred account. A sacred account is an account that you are not supposed to touch. The money in your sacred account is meant for acquiring assets and not luxuries.
I have a real estate account that I have not touch for years now. I put a portion of my income into the account monthly and I don’t touch it. This is one way I stay broke for the now so I can live that luxurious life in the future.
Your sacred account must not be just for real estate, it can be for a second business or anything that can increase your income. The good thing about having a sacred account is that you are not just saving, you are saving and studying your next investment.
Understand it could be years before you pull the trigger. I have saved in my real estate account for 2 years. I am studying in the area I want to invest in. Study while you save.
Success takes time. If you need to invest in coaching to get better, then do it. I don’t know how long it will take you to achieve your target income. But what I know is that it will take you hard work, persistence, faith, discipline to reach financial freedom where you can boldly declare that you have arrived!
I won’t tell you to stay broke and continue to grind. I won’t tell you that you will be making a good decision if you choose to do so. I respect your decision and your hustle. So, I will leave that for you to decide. But, what I want from you is to never become poor. God bless you!