#10 - 5 Uses of Money

 

The following concept was the main point that stuck with me after going through the CKA® training. It is practical and straightforward. Ron Blue, the presenter, made the case that there are five uses of money:

  1. Giving

  2. Taxes

  3. Debt

  4. Lifestyle

  5. Savings

Most, if not all, of our money transactions can fit into these five categories.

 

The case was made that budgets should be constructed in this order. Giving first, taxes next, and so on. If you switch debt and lifestyle, you could get into trouble. For example, you can see how if you set your gas and eating out budget (lifestyle expenses) before taking into account your mortgage payment that could be problematic.

 

Inevitably if you start with your income and then begin subtracting out these categories, you will end up with either a deficit or an excess at the end. If there is a deficit, you need to walk back through and figure out how to zero it out. Can you increase income in some way? Can you eliminate debt by selling an asset?

 

What happens if there is excess? This is a question I have been pondering and occasionally talking to my wife about (everyone say poor Allie).  My natural default has been to save (invest) the excess. Others natural default may be to apply it to the other categories (giving, debt, lifestyle). Is there a universal right answer? More on this later.

Interesting Article(s) or Video(s)
A Wealth of Common Sense - When Performance Leads Assets

  • Ben Carlson looks at two examples in history comparing fund performance and the correspondingly fund inflows. “There have always been performance chasers and there will always be performance chasers.”

Youtube - How Eliud Kipchoge Ran a Sub 2 Hour Marathon

  • On October 12th, Kipchoge made history by running a sub 2 hour marathon. Mike Boyd goes into detail about how great of a feat this was and how Kipchoge made it happen. This was too fascinating not to share

Thank you for reading! What should happen if there is excess? I would love to hear your thoughts!

 

 

 

 

 

 

 

 

 

 

Share on Facebook
Please reload

#2 - Filling Buckets

1/2
Please reload

Sycomore Financial, LLC (“Sycomore Financial”) is a registered investment adviser offering advisory services in the State of Indiana and in other jurisdictions where exempted.  Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Sycomore Financial in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption.

All written content on this website is for information purposes only. Opinions expressed herein are solely those of Sycomore Financial, unless otherwise specifically cited.  Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. The owner of this website takes great care to thoroughly research the information provided to ensure that it is accurate and current. Nonetheless, the content on this website is not intended to provide tax, legal, accounting, financial, or professional advice, and readers are advised to seek out qualified professionals that provide advice on these issues. All information or ideas provided should be discussed in detail with an advisor, accountant, legal counsel, and/or other pertinent professionals prior to implementation. In addition, the owner cannot guarantee that the information on this website has not been outdated or otherwise rendered incorrect by subsequent new research, legislation, or other changes in law or binding guidance. Neither Sycomore Financial or it's owner shall have any liability or responsibility to any individual or entity with respect to losses or damages caused or alleged to be caused, directly or indirectly, by the information contained on this website. In addition, any advice, articles, or commentary included on this website do not constitute a tax opinion and are not intended or written to be used, nor can they be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.

This website contains links to third party websites. Neither Sycomore Financial or it's owner is responsible for the accuracy of the third party website. We encourage you to review the privacy policy and other disclosures of every website you visit. The privacy and security practices of the third party may differ from our practices.

In regards to the free tax estimate, this is an estimate only. Actual tax liability or refund could vary perhaps to a significant degree. This should not be construed as investment, legal, and/or tax advice. Please seek out a relationship with a qualified professional to receive investment, legal, and/or tax advice. In addition, any interaction or commentary provided by Sycomore Financial, LLC or its owner does not constitute a tax opinion and are not intended to be used, nor can they be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The advisor agrees to work on the tax estimate for 1hr for free. If the tax estimate will take longer than one hour the advisor may refuse to complete the tax estimate.

Sycomore Financial does not receive any compensation from third parties for the sale of Sycomore Financial shirts.

PHONE

765-335-6673

EMAIL

tdodsworth
@sycomorefinancial.com

OTHER
SYCOMORE SATURDAY

Weekly email from Treavor on money and life. Learn more about Treavor's approach.