When it comes to wealth, all that you see doesn’t always tell the whole story….

Many people like to show the fruits of their labour. It makes them feel good to know that the things they buy from working hard and what they’ve earned makes them feel good. Most of all, it is important to realize that what we buy is first decided upon based on how we feel or how it will make us feel before and after we buy it.

I took an emotional intelligence course not long ago and realized during the course that everything we do is emotionally driven first. This emotionally driven force is sometimes referred to as our ‘gut feeling’. Sometimes it is deeply rooted in our subconscious. And other times it is based on some of our feelings growing up in situations that had a big influence on our feelings towards money and things as we became adults.

 How we feel determines our motivation to work and earn an income; including how we spend our money and what we spend it on. The things we buy and value are sometimes what others see. For many, it appeals to our self esteem when others close to us look on and acknowledge our accomplishments based on what we buy and surround ourselves and our environment with. Whether it is a nice car, nice clothes and accessories, a nice house, the latest gadgets or grownup toys, it matters to those who buy them and sometimes to those looking on in acknowledgement.

 For example, sometimes people who feel emotionally empty or loss will fill their life with stuff to replace the emotional loss they feel. The feeling lasts only a moment until the next purchase and the purchase after that until the emotional cycle gets out of control. One popular example of this is hoarding. Hoarding has become even more popular thanks to a program by the same name on The Learning Channel and A&E. A second example is someone who wants to prove to others through a win/lose situation, like separation and divorce, that they can make it on their own. After the life changing event concludes, they’ll usually have the most to prove to themselves and to others and they’ll spend their money on a big ticket item or make a significantly large purchase(s) that is not in their character. It will be an emotionally driven action and it will give them a feeling of having their life in their control again and that they can make it on their own. Unfortunately, the action will be void of any rational reasoning as the reality of their emotionally driven spending eventually sets in and all that is left are only the big bills or big ticket items to keep them company. It can also leave a huge hole in their pocket books and in a situation that makes them feel even worse than they did before the purchase; long after the life changing event has concluded.

 The thing to realize here is that there is always a deeper story or reason as to why people spend their money in ways that fulfill emotional needs or voids. It is important to stop, think, and understand the feelings behind the reasons why we spend our money and how it makes us feel. Putting emotions before money is never a good recipe for building wealth or acquiring things. Doing so can have short term gratification but serious long term consequences if little thought is put into spending your hard earned money. It is important to stop, think, give yourself some time to consider all the options, and then make that purchase of what you want. A positive feeling is to make a purchase and have no regrets afterward, even if you see it for a lower price later on down the road. You should be able to afford it fully when you buy it, it should add value to your life now and well down the road, and it should make you feel happy in the long run because you assessed your emotions and your financial situation before you spent your hard earned money.

 I always tell people that “there’s value in everything if you invest the time to look for it.” It won’t hurt you financially to look for value. You’d be surprised how a little effort to look for value can have a huge pay back. Putting in the little effort to look for value puts you back in control of your financial situation and builds your self-esteem and confidence that you make good financial decisions. And that should make anyone feel good about spending their money.

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Your health should be as important as your wealth.

I’ll admit that more people today are working longer hours to make ends meet. You hear about it on the news and read about it in newspapers. But what does this trend tell us exactly?

We hear reports that diabeties is on the rise globally and that people are weighing more than they should for their height and body type. Unhealthy eating and a sedentary lifestyle can lead to excess weight gain; often setting people up for a greater succeptibility to diabetes, heart disease, stroke and ultimately death. When we work longer hours and sacrifice sleep to do so, we tend to eat in order to cope with the stress put on our lives, especially if we’re working towards being able to afford to put food on our tables and keep a roof over our heads and so on.

As a student of many years of kung-fu, my Grand Master once said “stress is the number one killer of all human beings around the world.” It resonated with me when I thought about all the byproducts that stress produces. It has also been shown in mice that similar stresses produced the same results shown in humans. We have sympathetic responses to stress that show up as symptoms like obesity and addiction, that can be treated and managed under medical supervision and with a good support system.

But what good are we to ourselves if we’re unfit to the point where we have to stop working and go on disability when it could all be prevented?

Finding a good work/life balance can be challenging at times, but it is extremely necessary, in order to maintain the balance we all need in our lives to be healthy, happy, and productive human beings that contribute positively to society.

Maintaining your wealth should be just as important as maintaining your health. Because without your health, you really aren’t worth very much to anyone if you’re too sick to enjoy life and the company of loved ones.

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The importance of doing a budget and sticking to it. Do it once. Maintain it regularly.

When I get on the topic of budgets with people during casual conversation, a lot of them often tell me that they wish they knew where all of their money was going. They find my answer a bit of a put-off when I ask them “have you actually bothered to look?”

A lot of people I’ve encountered get themselves into financial hardship because they truly haven’t bothered to actually look at where their money is going. They will pay their mortgage, their bills, buy groceries, put gas in their car, and go out and have a good time, but will have no clue as to where their hard earned money is actually going. For people in this situation, the predisposing factor that leads them down this road is usually an emotional one. When they look at their bank account getting smaller and their bills getting bigger over time, they become emotionally overwhelmed and stop looking at their bank account all together in order to numb themselves from the reality and gravity of the situation they’ve created for themselves.

Creating a budget and sticking to it is a sure fire way to right their financial boat in order to keep it afloat and headed in the direction that they’d like it to keep sailing in.

Unfortunately for most people, doing all of the leg work before putting together a sound financial budget is almost as painful as having their arm sawed off with a blunt object. Sure, it may sound a bit extreme, but when I tell people the information I require from them in order to do a realistic budget for them, it very well can be an extremely painful and daunting task. Often times they feel they don’t have enough time to fix their financial mess (usually debt) and that the leg work will take too much time to do for their budget, before their financial situation can be resolved. The stress of time to pay off debts can create a lot of anxiety for many who are in a lot of debt. But debt, no matter how much one has, can be managed and dealt with when action is taken to come up with a plan and put it in place to deal with it; hence the need for a budget. Other times they simply have never done a budget before, and have never been shown how to, and are relieved when I patiently sit with them and enter all of the information they’ve painstakingly put together on their own into a MS Excel spreadsheet. After all, it is their budget and their financial future that requires planning for their success. Not mine. And I do it on a voluntary basis only if they’re willing to see it through to the end and do the leg work necessary to complete and maintain their budget.

For those that I help do a budget, I always tell them that they’ll see results in the first 30 days, because the budget is done on a monthly basis. Warren Buffet once said that “the only thing you have to build equity (wealth) is time.” This is also true for accumulating debt and alternately getting it down and out of the way for good. Doing a budget will allow you to have a plan put in place to realistically and surely get rid of your debt until it is either manageable or all gone. When you have a plan in place and stick to it, you will feel better knowing that you either are already taking care of it or already have the money for it. Some extreme cases may require much more leg work and very difficult financial choices to make like selling their house, or getting a second job, or leaving their spouse that puts their family in financial turmoil with wreckless abandon towards money; but the choice to ignore the reality of their situation and do nothing often produces an even greater negative result for their personal financial situation. Sometimes these extreme personal financial situations will change their life for a very long time; sometimes forever. But they need to be addressed during the planning of their budget and adjusting their budget when situations change.

Your budget should cover these basic areas of your personal finances:

- What you earn

-What you save

-What you invest (from your savings)

-What you spend

-What you owe (debt + interest)

-All your assets (including life insurance)

It’s that simple and should be prioritised in that order. Your net worth follows the simple equation:

What you’re worth = (What you earn + What you save + What you invest + All your assets) - (What you spend + What you owe + Applicable interest on what you owe)

The simple equation above sums up basically what any good budget spreadsheet will be able to calculate automatically for you to let you know where you stand financially on a monthly basis. Simple addition and subtraction.

A budget allows you to see many months or years into the future where you stand financially so that you can plan for the things you want like a new car, bike, house, vacation, wedding, new baby and so much more. It keeps reality in check and allows you not to have to lose sleep worrying over money. You will sleep better at night knowing you have a plan in place and that you’re working towards your goal of a sound financial future. Because it includes savings, you can tell yourself that you already have the money, should a financial emergency come up like your car needing emergency repairs, or you need a new stove because the one you have just died and isn’t worth repairing.

I’ll be sure very soon to post the steps required and the information needed for making a realistic budget that you’ll be able to stick to and also a copy of my budget spreadhseet that you can modify to suit your budget needs. I’ll also post  a sample filled in spreadsheet so that you can see how the numbers work and how it is calculated.

Like my mother taught me many years ago, the best and most simple budget is one you can do simply on a piece of paper once a week when you know your numbers and keep a close eye on where your money is going at all times. Knowing where your money goes for your budget puts you in control of your personal financial future and allows you to plan to buy the things that you need as well as the things that you really want.

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When it comes to wealth, all that you see doesn’t always tell the whole story….

Many people like to show the fruits of their labour. It makes them feel good to know that the things they buy from working hard and what they’ve earned makes them feel good. Most of all, it is important to realize that what we buy is first decided upon based on how we feel or how it will make us feel before and after we buy it.

 I took an emotional intelligence course not long ago and realized during the course that everything we do is emotionally driven first. This emotionally driven force is sometimes referred to as our ‘gut feeling’. Sometimes it is deeply rooted in our subconscious. And other times it is based on some of our feelings growing up in situations that had a big influence on our feelings towards money and things as we became adults.

 How we feel determines our motivation to work and earn an income; including how we spend our money and what we spend it on. The things we buy and value are sometimes what others see. For many, it appeals to our self esteem when others close to us look on and acknowledge our accomplishments based on what we buy and surround ourselves and our environment with. Whether it is a nice car, nice clothes and accessories, a nice house, the latest gadgets or grownup toys, it matters to those who buy them and sometimes to those looking on in acknowledgement.

 For example, sometimes people who feel emotionally empty or loss will fill their life with stuff to replace the emotional loss they feel. The feeling lasts only a moment until the next purchase and the purchase after that until the emotional cycle gets out of control. One popular example of this is hoarding. Hoarding has become even more popular thanks to a program by the same name on cable TV. A second example is someone who wants to prove to others through a win/lose situation, like separation and divorce, that they can make it on their own. After the life changing event concludes, they’ll usually have the most to prove to themselves and to others and they’ll spend their money on a big ticket item or make a significantly large purchase(s) that is not in their character. It will be an emotionally driven action and it will give them a feeling of having their life in their control again and that they can make it on their own. Unfortunately, the action will be void of any rational reasoning as the reality of their emotionally driven spending eventually sets in and all that is left are only the big bills or big ticket items to keep them company. It can also leave a huge hole in their pocket books and in a situation that makes them feel even worse than they did before the purchase; long after the life changing event has concluded.

 The thing to realize here is that there is always a deeper story or reason as to why people spend their money in ways that fulfill emotional needs or voids. It is important to stop, think, and understand the feelings behind the reasons why we spend our money and how it makes us feel. Putting emotions before money is never a good recipe for building wealth, taking on investment risks or acquiring things. Doing so can have short term gratification but serious long term consequences if little thought and planning is put into spending your hard earned money. It is important to stop, think, give yourself some time to consider all the options, and then make that purchase of what you want. A positive feeling is to make a purchase and have no regrets afterward, even if you see it for a lower price later on down the road. You should be able to afford it fully when you buy it, it should add value to your life (utility) now and well down the road, and it should make you feel happy in the long run because you assessed your emotions and your financial situation before you spent your hard earned money.

 I always tell people that “there’s value in everything if you invest the time to look for it.” It won’t hurt you financially to look for value. You’d be surprised how a little effort to look for value can have a huge pay back. Putting in the little effort to look for value puts you back in control of your financial situation and builds your self-esteem and confidence that you make good financial decisions. And that should make anyone feel good about spending their money. 

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Why was the blog Add Value Always created?

Hello and welcome to my personal blog called “Add Value Always”.

I hope to help people that have been looking for some answers to some of life’s most common challenges when it comes to personal financial management, money, the role it plays in our lives, what we’re taught about mony from childhood, and our ongoing relationship with it when we become adults and beyond.

I may go off topic a bit, but it will usually be done to emphasize a point about our relationship with money and the kind of life it affords us to have (or not have); depending on how we ‘feel’ about it and value it.

I’m not a CMA, CGA, CFP, or hold any professional financial designations after my name (at the moment), but what I do have is a very deep interest about personal financial management and how it affects people’s lives on a daily basis. I always invest the time to learn and understand what I read infront of me when it comes to financial matters. As a part-time undergraduate student of economics, I make good the access and resources available to me there, in order to learn more about personal financial management and investing. I hope to share with you what I’ve learned and experienced in hopes it will add value always to you too.

Some of you may read my blog and realize that some of the content pertains directly to you, to someone you know, or to your current situation. Well, that’s okay. I’m sure all of us have been in one situation or another with respect to money that we can all relate to at some point in our lives or have experienced ourselves. You’d be surprised how we all go through life making the same mistakes when it comes to personal financial management. Talking about money these days has almost the same stigma as talking about sex; as it was almost 50 years ago. With the proliferation of the internet, sex and sexual messages are all around us. Sex and sexual images are used to sell goods and services around the clock that we don’t really need; yet we still give into it and buy them. From the day we are born until the day we die, we are all touched by the effects of money and the value of things as our lives continue to grow and evolve onwards.

I encourage everyone that visits my blog to share your stories and your comments, in hopes that others will read it and be able to find the answers and solutions to some of their own personal financial challenges that keep them from living the life they truly want and deserve.

So, let’s get started….

Mark Donaldson

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