How much you earn is not important, we live in an ostentatious environment where people are ranked, elevated and positioned based on how much they earn. How much you earn is not important; what is important is how much is left. The difference between your income and your expense defines your cash flow. Your cash flow is your ticket into your next level. What matters is what is left.
We live in a funny society, where we evaluate our friends on the basis of their salaries. If he’s earning huge figures, he’s a big boy, if not, he’s not. We are excited about the high sounding numbers, and forget one critical law called Parkinson’s law.
Parkinson’s Law simply states that expenses will always rise up to meet income. At the end of the day, the high income rarely survives the equally high expense. High income earners usually end up as high spenders, whatever is left, is all that anybody can use to take advantage of the next opportunities coming her way. It might not even be far fetched to say your driver may have a higher cashflow than you, if this is the case, then you are not better, at least not financially. I normally would say that there is no difference between a GM – General Manager and a GM – Gate Man, in as much as there is no difference in their cashflow. If the GM earns N1,000,000 and spends N990,000 monthly, he is really not different from the other GM who earns N40,000 and also spends about N30,000. When opportunity comes their way, their response will be the same.
Parkinson’s law is actually not a new law, the good book also says that when wealth increases, they increase also that eat it. You will find yourself attracting more people the moment your income increases. The lifespan of the excitement based on salary increases is 3 months. It’s a natural phenomenon that expenses must rise up to meet income. To not be a victim of the natural, one needs to be deliberate. What matters is not how much you earn, what matters is how much you have left.
Don’t be deceived that because you are earning millions a month or even have billions stashed in your account that it is sure for you. It is not sure! There is no amount of money that cannot become history within a space of three years. Lottery winners averagely return to status quo within 3 odd years. It’s not how much you earn that’s most important in defining your financial intelligence, it’s the discipline to have a reserve, the discipline to every month establish a differential with which you can take advantage of opportunities.
I-E =C gives you a positive cash flow with which you can take advantage of opportunities. I have people tell me how can you tell me how much I earn is not important, isn’t how much I earn what will determine what I can do? Yes how much you earn is important when you start. What is important is that you form the discipline to ensure that you are able to manage your income, keep your expense lower than your income, have positive cash flow and then begin to stockpile it to your escrow account or what you would call a storehouse. I tell people your storehouse fills you with confidence, fills you with energy, fill you with a sense of making progress. It also affects your ability to confess you don’t have money, because you have a storehouse. It affects you internally and ultimately make you attract to yourself the kind of people and the kind of income that you truly deserve.
The first thing that needs to change is how much is left, once you can form that habit consistently, life has a away of ensuring that you attract more income and then how much you earn can begin to grow. Now, what you have left determines your financial future, there are different categories of people, there are people who don’t know what their monthly expense is; I tell people if you don’t know what exactly it is you spend on a monthly basis, you cannot say, this is my monthly budget then you are gradually heading for some kind of disaster. Bankruptcy is when you income is less than your expense and then you have a demand that you are unable to meet. There are also people who know, but live above their means, the stage of mastery starts from having a reserve.
What is left is what God blesses, your storehouse is made up of the cash that is available. I tell people it does not matter how much you sow, if God in response to your prayers sends the rain and the rain does not meet your seed in the farm you will not benefit from the rain. All your prayers and supplications will be to the advantage of your neighbor and not to your own advantage. Just as if you want God to bless the works of your hands, you must have the works that your hands are doing, the same way it is crucial that you have a reserve if you want the blessing of your storehouse to be beneficial.
Very simple principle so once you are earning income, increase your income and control your expenses, so that whatever is left is not being consumed nor sold away. Store it where it can multiply, because the ideas you will get, the opportunities that will come your way, the favors you will receive will be channeled back to the cash reserve you have and that is what you will use to take advantage of the next opportunity. This is how it works!