DEBT DIAGNOSIS

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Kiyosaki is right, dol­lars have no intrin­sic value.

If you are going to try to accu­mu­late dol­lars, you are wast­ing your time as dol­lars have no value other than that which we and other peo­ple place on those’ lit­tle green pieces of paper with pic­tures of dead pres­i­dents on them’.

Bank­ing is not about accu­mu­lat­ing, it is about uti­liz­ing money (how­ever one defines money) to cre­ate wealth.

Wealth is NOT money!  Gold is a com­mod­ity, just like sugar, corn, choco­late, or Twinkies.   Com­modi­ties to be valu­able must be traded for some­thing both exchang­ers find of value.

Bank­ing is about the effi­cient move­ment of money (how­ever one defines it) from one place to another, in the most timely and effi­cient man­ner possible.

The bank­ing process is a part of every­thing we do and every exchange we make.  You can buy gold and sit on it (accu­mu­late it), but even­tu­ally you will have to con­vert it to some­thing you want more than you want the gold.

Be care­ful with ‘accu­mu­lat­ing’ as accu­mu­lat­ing can rapidly turn to dead or life­less assets which then become toxic and become lia­bil­i­ties.  That process is the exchange process, which bank­ing facilitates.

Ask­ing whether some­one should buy sil­ver or not is like ask­ing if they should by sugar, or gaso­line.  If they want the sugar or gaso­line, or gold, then the answer is yes.  If you think it is an invest­ment, then think again.  Gold only goes up when the pur­chas­ing power of the dol­lar goes down.  As an invest­ment, it is a lousy invest­ment… as a hedge against infla­tion, it is as good as buy­ing the new for­ever postage stamp, sugar or Twinkies. Jim K.

I am not licensed to give any advice on invest­ing to any one for any rea­son.
I am life insur­ance licensed but do not need a license to dis­cuss bank­ing and why becom­ing your own banker is a great advan­tage.  The state­ments above are not my words but they helped me under­stand money fur­ther.
The big ques­tion here is — Do you want your money in some­one else’s bank, where they are prof­it­ing from your money, or, do you want your money in your own bank­ing sys­tem where you can mimic the strate­gies banks use to profit from your money, only you are now able to profit from your money?
Banks under­stand money and you should too.

What’s the point in earn­ing money if you don’t spend the nec­es­sary time learn­ing how to best look after it. And where do you go to learn any­thing? Did school or col­lege teach you all about bank­ing? Who are the experts? The finan­cial insti­tu­tions them­selves??? The TV Guru’s???

It is the flow of, or the move­ment of your money that can cre­ate wealth for you.

The two rich­est banks in this coun­try move more than a tril­lion dol­lars of money every day. It just moves around on paper. There is noth­ing to back it up. But with­out bank­ing, busi­ness would not be able to func­tion. Bank­ing has been around for over 5000 years. It is here to stay. But there is no rule that says you can­not put your money into your own bank­ing sys­tem rather than some­one elses’ so you have the lever­age, you have the liq­uid­ity, you have the con­trol, you have the safety, and you earn the prof­its from mov­ing your money.

In fact, IRS code 7702 is the rea­son you can legally and eth­i­cally own your own bank­ing sys­tem. Become Your Own Banker today. At least begin to research a dif­fer­ent way than what you have been taught to believe is the only way.

See my offer now and begin your inves­ti­ga­tion NOW.

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Cash Flow — The Pulse of Your Business

Unfor­tu­nately, many small busi­ness own­ers do not fully under­stand their cash flow state­ment. This is shock­ing, given that all busi­nesses essen­tially run on cash, and cash flow is the lifeblood of your busi­ness. Some busi­ness experts even say that a healthy cash flow is more impor­tant than your business’s abil­ity to deliver its goods and ser­vices! That’s hard to swal­low, but con­sider this: if you fail to sat­isfy a cus­tomer and lose that customer’s busi­ness, you can always work harder to please the next cus­tomer. But if you fail to have enough cash to pay your sup­pli­ers, cred­i­tors, or employ­ees, you’re out of business!

What Is Cash Flow?

Cash flow, sim­ply defined, is the move­ment of money in and out of your busi­ness; these move­ments are called inflow and out­flow. Inflows for your busi­ness pri­mar­ily come from the sale of goods or ser­vices to your cus­tomers. The inflow only occurs when you make a cash sale or col­lect on receiv­ables, how­ever. Remem­ber, it is the cash that counts! Other exam­ples of cash inflows are bor­rowed funds, income derived from sales of assets, and invest­ment income from inter­est. Out­flows for your busi­ness are gen­er­ally the result of pay­ing expenses. Exam­ples of cash out­flows include pay­ing employee wages, pur­chas­ing inven­tory or raw mate­ri­als, pur­chas­ing fixed assets, oper­at­ing costs, pay­ing back loans, and pay­ing taxes.

Note: An accoun­tant is the best per­son to help you learn how your cash flow state­ment works.

Cash Flow Ver­sus Profit

Profit and cash flow are two entirely dif­fer­ent con­cepts, each with entirely dif­fer­ent results. The con­cept of profit is some­what broad and only looks at income and expenses over a cer­tain period, say a fis­cal quar­ter. Profit is a use­ful fig­ure for cal­cu­lat­ing your taxes and report­ing to the IRS. Cash flow, on the other hand, is a more dynamic tool focus­ing on the day-to-day oper­a­tions of a busi­ness owner. It is con­cerned with the move­ment of money in and out of a busi­ness. But more impor­tant, it is con­cerned with the times at which the move­ment of the money takes place. The­o­ret­i­cally, even prof­itable com­pa­nies can go bank­rupt. It would take a lot of neg­li­gence and total dis­re­gard for cash flow, but it is pos­si­ble. Con­sider how the dif­fer­ence between profit and cash flow relate to your business.

Exam­ple: If your retail busi­ness bought a $1,000 item and turned around to sell it for $2,000, then you have made a $1,000 profit. But what if the buyer of the item is slow to pay his or her bill, and six months pass before you col­lect on the account? Your retail busi­ness may still show a profit, but what about the bills it has to pay dur­ing that six-month period? You may not have the cash to pay the bills despite the prof­its you earned on the sale. Fur­ther­more, this cash flow gap may cause you to miss other profit oppor­tu­ni­ties, dam­age your credit rat­ing, and force you to take out loans and cre­ate debt. If this mis­take is repeated enough times, you may go bankrupt.

Ana­lyz­ing Your Cash Flow

The sooner you learn how to man­age your cash flow, the bet­ter your chances for sur­vival. Fur­ther­more, you will be able to pro­tect your company’s short-term rep­u­ta­tion as well as posi­tion it for long-term suc­cess. The first step toward tak­ing con­trol of your company’s cash flow is to ana­lyze the com­po­nents that affect the tim­ing of your cash inflows and out­flows. A thor­ough analy­sis of these com­po­nents will reveal prob­lem areas that lead to cash flow gaps in your busi­ness. Nar­row­ing, or even clos­ing, these gaps is the key to cash flow man­age­ment. Some of the more impor­tant com­po­nents to exam­ine are:

• Accounts receiv­able. Accounts receiv­able rep­re­sent sales that have not yet been col­lected in the form of cash. An accounts receiv­able is cre­ated when you sell some­thing to a cus­tomer in return for his or her promise to pay at a later date. The longer it takes for your cus­tomers to pay on their accounts, the more neg­a­tive the effect on your cash flow.
• Credit terms. Credit terms are the time lim­its you set for your cus­tomers’ promise to pay for their pur­chases. Credit terms affect the tim­ing of your cash inflows. A sim­ple way to improve cash flow is to get cus­tomers to pay their bills more quickly.
• Credit pol­icy. A credit pol­icy is the blue­print you use when decid­ing to extend credit to a cus­tomer. The cor­rect credit pol­icy —  nei­ther too strict nor too gen­er­ous — is cru­cial for a healthy cash flow.
• Inven­tory. Inven­tory describes the extra mer­chan­dise or sup­plies your busi­ness keeps on hand to meet the demands of cus­tomers. An exces­sive amount of inven­tory hurts your cash flow by using up money that could be used for other cash out­flows. Too many busi­ness own­ers buy inven­tory based on hopes and dreams instead of what they can real­is­ti­cally sell. Keep your inven­tory as low as possible.
• Accounts payable and cash flow. Accounts payable are amounts you owe to your sup­pli­ers that are payable some time in the near future — “near” mean­ing 30 to 90 days. With­out payables and trade credit, you’d have to pay for all goods and ser­vices at the time you pur­chase them. For opti­mum cash flow man­age­ment, exam­ine your payables schedule.

Some cash flow gaps are cre­ated inten­tion­ally. For exam­ple, a busi­ness may pur­chase extra inven­tory to take advan­tage of quan­tity dis­counts, accel­er­ate cash out­flows to take advan­tage of sig­nif­i­cant trade dis­counts, or spend extra cash to expand its line of busi­ness. For other busi­nesses, cash flow gaps are unavoid­able. Take, for exam­ple, a com­pany that expe­ri­ences sea­sonal fluc­tu­a­tions in its line of business.

This busi­ness may nor­mally have cash flow gaps dur­ing its slow sea­son and then later fill the gaps with cash sur­pluses from the peak part of its sea­son. Cash flow gaps are often filled by exter­nal financ­ing sources. Revolv­ing lines of credit, bank loans, and trade credit are just a few of the exter­nal financ­ing options avail­able that you may want to dis­cuss with us.

Mon­i­tor­ing and man­ag­ing your cash flow is impor­tant for the vital­ity of your busi­ness. The first signs of finan­cial woe appear in your cash flow state­ment, giv­ing you time to rec­og­nize a forth­com­ing prob­lem and plan a strat­egy to deal with it.

Fur­ther­more, with peri­odic cash flow analy­sis, you can head off those unpleas­ant finan­cial glitches by rec­og­niz­ing which aspects of your busi­ness have the poten­tial to cause cash flow gaps.

Thanks to Pre­cise Tax & Account­ing, LLC for this arti­cle on Cash Flow — The Pulse of Your Busi­ness.