It is difficult to look at the financial landscape and not be a little concerned about the next 10 years of potential financial stress. The telltale signs of a deep recession are everywhere, yet these forewarnings seem to have little impact on the financial habits of most households.
As much as we scream about external factors causing our financial distress, I have found that 99% of one’s path to financial ruin is an inside job.
There is an anatomy of financial ruin.
Anatomy: separating or dividing into parts for detailed examination.
Ruin: a. a state of complete destruction
b. the state of having lost money, social status, etc.
– Merriam-Webster
If you find you are on the opposite side of financial success and wealth, you need to know with certainty there IS a way out.
Financial Ruin could be defined as a state or condition where one has scarcity of money, has suffered large losses of income, where investment value and assets are overleveraged, where credit is stressed and there is burdensome debt (including credit cards and student loans), where there are no apparent immediate solutions (and bankruptcy seems reasonable), where financial resources are limited or non-existent and seemingly all hope is lost that one’s current financial condition could possibly be rehabilitated.
Here is the formula for “ruin”: CONFUSION followed by continued DESTRUCTIVE ACTION = RUIN.
Ironically the derivation (root) of the word confusion comes from the 13th century Old French “to overthrow, ruin” and Old French as confus “dejected, downcast, undone, defeated, discomfited in mind or feeling”.
Of course, most of us do not intend to be in a condition of financial ruin. However, we can trace a definitive sequence of actions such as spending beyond income, excessive credit card debt, bad credit, and other unhealthy bad financial habits that one has engaged in to lead him down this destructive path.
This financial confusion can manifest itself in many ways on an individual level leading to destructive actions and ultimately financial ruin. Let’s examine some examples:
• “I don’t know how to increase my income to pay for my lifestyle.” – (confusion)
• “I’ll just start spending some of my reserves and retirement and use it now.” – (destructive action)
• “I’ll invest in crypto and real estate because that is where everyone tells me I can build wealth and make a lot of money.” – (continued destructive actions)
This of course could lead to huge financial losses, penalties, possible bankruptcy, and eventual financial ruin in your business. Examples are as follows:
- “I don’t know why I always have problems covering payroll and not paying myself.” –(confusion)
- “I will stop the marketing and consulting services so we can save financial resources.”
– (destructive action) - “I know my office manager is lazy and incompetent, but I just can’t confront firing her.” – (continued destructive actions)
- “I will just work less hours and let some people go just so I don’t have to deal with the complaining and workload.” – (continued destructive actions)
- It’s an insidious contagion that will eventually lead to an insolvent business, more financial stress, lack of wealth, and inevitably financial ruin for your business and you personally.
The anatomy of ruin is not exclusive to personal finances. It also applies to other aspects of your life. The primary reason people use drugs, alcohol, or psychiatric medication is because there is some confusion in their lives that they don’t know how to handle or confront. This is why it’s so important not to sweep confusion under the rug.
Remember, earlier I stated I have observed that 99% of one’s path to financial ruin is an inside job.
The good news is, identifying and admitting what you have done that caused the financial ruin is your silver lining of hope that you can find your way back to building supportive financial resources and wealth.
The truth is, most people in this country are in financial confusion – but YOU don’t have to be one of them.
Confusion is simply a symptom of not having a clear and precise objective, correct knowledge of the subject, and methods of tracking progress. As applied to finances, the formula is defining exactly what the Optimum Financial Condition looks like, mapping out and aligning all efforts on how to achieve the optimum, using a method to track progress and results and then of course maintain a strict discipline of good habits to achieve it (and you may even want to hire a professional to hold you accountable).
Here’s the first step to help you GET OUT OF CONFUSION and back on the path to financial success.
Here is how to handle it:
- Take a pen and paper and write down a list of everything you are confused about in your business and your personal finances.
- Look at the list and determine just one item you can confront and do something about. Call your business consultant and your financial advisor if you need help.
- Cross that item off the list and find another item you can handle.
- Continue until you don’t feel confused or overwhelmed anymore.
To help you see your financial life in a snapshot, we created a revolutionary financial assessment to help you spot exactly where YOU are in your financial life compared to an optimum in 9 areas – it’s called The Financial Prosperity Index®. Visit www.financialprosperityindex.com.
The next step would be to create a strategic plan of action and find out what areas you need to address. You will likely need an expert who understands your business and how it creates both opportunity and liability to your household. Once you see the big picture and you know the destination, you will have less financial stress. You’ll begin building wealth and additional financial resources, you’ll pay off credit cards and improve your credit, and you’ll be on a path toward financial freedom.
There is no reason for you to feel the effects of financial confusion – no matter what economic pitfalls are waiting around the corner. Just follow the steps to get out of financial confusion – that part isn’t hard. The 1% are not confused and you should be in the top 1% of all Americans. Get your money right and the whole world opens up to you.
Let the team here at Econologics Financial Advisors help! It’s what we do!
About Econologics Financial Advisors
Econologics Financial Advisors is a Registered Investment Advisor firm and insurance agency serving the financial planning needs of healthcare practice owners, nationwide, including veterinarians, physical therapists, optometrists, and dentists, etc. helping them gain confidence in their financial future and achieve financial freedom. By helping practice owners plan a path toward financial success, Econologics Financial Advisors shows owners how to run their household like a business and treat their practice like the investment asset that it is through tailored financial planning techniques designed to get results.
Econologics Financial Advisors is also home to multiple licensed financial advisors and a staff who are committed to helping practice owners achieve their business and personal financial goals. After working with an Econologics Financial Advisor, a practice owner informed how to harness the profits of the business, to build multiple income streams of personal wealth, prepare for retirement, protect and expand their income producing assets, and plan a financial legacy expeditiously.
Econologics Financial Advisors, LLC (‘EFA’) is registered with the Securities and Exchange Commission as an investment advisor. (Such registration does not imply a certain level of skill or training.) This communication is not an offer to sell or effect any transaction in securities. Neither EFA nor its affiliates provide legal, tax or accounting advice. Please consult a qualified attorney or accountant.
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