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GUERRILLA WARFARE: YOU VERSUS YOUR PORTFOLIO

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annual expenses from your income. If you get a positive number, then this is your discretionary income. However, if you get a negative number, you are spending more than you are earning.

By analyzing your income and expenses, you will see exactly how much you are spending. Most of my clients find that they are spending much more than they thought. If you have negative discre- tionary income, you need to look at your expenditures to see where you are spending more than necessary. First make sure you didn’t double count anything. If you find that the negative number is cor- rect, you will need to curtail your spending, or you may find yourself going deeper and deeper into debt.

If you have a positive discretionary income, ask yourself if that seems right. For instance, you determine that your discretionary income is $6000 per year ($500 per month). Is that right? Do you feel like you have extra money leftover every month after you pay your bills? If so, how much of that money can you save? There still may be extra money that you are spending every month that could be redi- rected. If you feel that you would like, or need, to save more than what your cash flow is saying you can, take another look at your expenses. Perhaps you can redirect some of the money you are spending, thus saving it without feeling like you are spending any additional money.

Once you have concluded how much money you can save on a monthly basis, start doing it! It will add up much faster than you think it will. It’s never too late to start saving for your goals. What you want to be sure of is that you are saving and being proactive in relation to your goals and objectives. The only way you will fail to reach your goals is by failing to work for them.

A WORD ABOUT INCOME AND WEALTH

Many people confuse having a large income with being wealthy. Try not to. A client of mine makes hundreds of thousands of dollars every year. His wife doesn’t have to work, and they live a very comfortable life. To look at him, you would think he was a very wealthy man who could buy most anything he wants. However, as his advisor, I see things that others don’t. Over the years he has taken out so much

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