What is the money mojo you ask? Well it is the point in your life when money is flowing like an open faucet. When you experience a day, a month, or maybe a year in this stage you will feel tempted to increase spending and ball out. If you are smart you could make your money work harder for you while in this stage. How do you ask? By continuing to live life as if you did not have a money mojo going on at the moment. Lifestyle inflation is something that creeps up on most people and spending takes over their lives. Many strategies can be utilized to assist you and will prevent wasting your money mojo and the future earning power of that mojo.
The Money Mojo:
Keep the focus in the right direction towards protecting income. (Realization Stage)
Harness the income to achieve as much as possible before it ends.
Keep sight of percentages based on old income not new income. (Focus Stage)
Automate finances, raise savings to match new increases in income.
Illusions of Grandeur, avoid lifestyle inflation, avoid big purchases and adding debt. (Danger Stage)
Remember not to rush into things, make sure to let time pass and savings add up before acting.
Add up all the Surplus income at the end of every month to invest into assets. ( Accumulation Stage)
These are all the steps you need to remember when in the money mojo stage thus keeping income at all time highs for a long time. Each one is geared to offer you something to keep you in sight and in focus with your money. When you finally realize what you have going, you will then see that it takes a great effort to not get off track due to your new-found dough. Many individuals begin to lose sight and go on spending sprees that were never in the discussion before. Like upgrading houses, cars, taking vacations before planning. What people should to efficiently handle the mojo stage is to fund all retirement goals first, like 401K and IRA’s. Then they should complete any money goals they had prior to the windfall, like saving for a down payment or paying off any old debts.
Third thing they should do is to spend 5-10% of the total income on a want as to not get burned out. Fourth step that should be taken in this process is to give to others who are less fortunate. Doing this will ground you and make you appreciate more what you are receiving and make others happy in the process. The fifth and final step is to add up the entire surplus to buy investable assets, which pay dividends in non-retirement accounts. Doing this final step will give you that extra buffer you will need in case you don’t reach your retirement number and goals. In this account you will then have the option to reinvest dividends or take the amount now. Obviously your best bet is to let things reinvest and compound with ferocity, but it is all your choice. I know some people who only reinvest 50%of dividends and collect 50%.
Income comes in spurts and sometimes in waves. But will you be up for the challenge to make the best use of it when you have it. If you do happen to make the best use of it, then that money will re-pay you back by compounding in hordes now and giving you a sustainable income stream for life later. This is what I envision happening to those who will not get caught up with the make more spend more money disasters happening every day. (There’s even a song based on the AKA Work hard= play hard)
Comment if you agree with the money mojo mentality that can lead you to win.
Rich Uncle EL
Pic credited to the Austin Powers movie.
