Increase Your Personal Profit

Here is an extremely simple principle that when really understood, over the long run will make you extremely wealthy:

Income - Expenses = Profit

Nearly everybody on the planet is aware of this, but few truly understand the significance of what it really means. If they did understand what it meant, they wouldn't be leveraging themselves to the hilt with credit card debt, highly geared mortgages, car loans, university loans that they cannot afford to repay.

My whole financial philosophy is to minimise or eliminate debt, unless it is used to gear an asset purchase (and only then in particular circumstances). Once debt has been eliminated, monthly costs can be reduced significantly due to not having to pay interest. By budgeting, monthly costs can be reduced even further leading to a positive personal profit.

Once you have this positive personal profit, you can begin to save it and ultimately invest it in assets that will generate a positive yield. It really is that straightforward. It does take a bit of work, however!