Devoted to small businesses and those who run them

Guest Post

By the author of The 3 Secret Pillars Of Wealth
James Burns

We’ve all heard the expression “cash is king.” Well, that happens to be true. Cash flow is critical to success in business and wealth building, and the most important indicator of financial health for both businesses and families.

Cash flow tells us how much we’re spending and how much we’re making, and while it isn’t the only financial indicator we should pay attention to, it certainly says a lot about the health of our businesses’ and families’ finances. If you want control over your finances, you need to understand how your cash flow works.

In my book “The 3 Secret Pillars of Wealth” www.3pillarsofwealth.com I advocate that people run their family spending like a business. Americans are notorious for living beyond their means, families are just charging on their drastic plastic (credit card).

No need to go overboard with this, but a family should employ a few of the practices that a business would use, like budgeting and doing a monthly cash flow statement to check on investments and measure liabilities.

This process is just to better understand what your family’s finances are doing and where you’re headed. Cash flow management is the process of monitoring, analyzing and adjusting your business’ cash flows and in the family setting, adjusting your lifestyle cash flows.

It’s like a visit to the doctor for your finances to make sure everything is ok. We’ve all heard that an ounce of prevention is better than a pound of cure and when the only cure might lead to filing a bankruptcy we really need to adopt this habit.

There is a great free service I discuss in the book where you can create a debt payoff plan. Every entrepreneur wants to be a millionaire but most do not have millionaire habits. Millionaires endeavor to understand investments and they observe cash flow discipline.

James Burns is the author of “The 3 Secret Pillars of Wealth” www.3pillarsofwealth.com. He is a tax attorney with two law degrees. He holds board positions in business and investment fields.