Physical Fitness depends on the frequency and intensity of physical exercises. Nobody underestimates the power of exercise to improve one’s physical fitness. This rule is applicable even for financial fitness. Financial exercises are necessary to improve your financial fitness! So what are these financial exercises?
I very often make financial projections about my cash flows in the next 3-5 years. I love doing exercises which open up my mind to my future savings. It helps me to dream much bigger than my current liquidity position. It prepares my mind for what is possible in the future and based on this future possibility, I start preparing myself today. I might not take a decision or make a financial commitment today, but I will start preparing a vision about my future today. Once that vision is formed, your mind starts thinking and attracting the desired outcomes into your life. This has been the foundation of my financial success
This is not day dreaming or wishful thinking. All large corporate make future financial projections. I have simply applied these principles of corporate finance to my personal finance.
I regularly assess my borrowing capacity by listing various sources of raising debt i.e. using my future earnings today. So based on projected savings in 3-5 years and projected capacity to raise debt in 3-5 years, I imagine what can be created out of such availability of funds.
I keep examining the newspaper classified columns to check on various opportunities available. Even if the opportunity appears to be out of my capacity I still evaluate it to see if it’s worthwhile. Each such exercise has resulted into some “insights” which can be applied in different scenarios. That is innovation in financial exercise.
Some of you must be familiar with terminology “financial engineering”. I love doing exercises where one has to use his imagination to raise funds from different sources to realize and give shape to financial projects. I generally start any exercise with an assumption “Yes, this is possible. Let’s evaluate it”, instead of saying “Forget it, it’s out of my reach, why waste time?”
The financial exercises keep my mind also in a positive zone and then the power of attraction too starts working. Nature has a rule-“Use it or lose it”. So the more financial exercises you do, the more you will be prepared to create the financial life that you would like to create. You will start forming a vision, a plan, a goal and then start implementing. This is an on-going exercise. You cannot do it once and forget about it.
Are you also working on your financial fitness? Leave a comment below to share your experiences.
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