There are various definitions of Inflation, but the one that I like the most is too much money chasing too few goods. When this happens, prices go up or inflate. How do you avoid the negative impact of inflation? Here are 4 simple unbreakable Kingdom rules to break inflation in any country or economy.
When it comes to strengthening our business and individual financial futures, most people start by focusing on making more money. However, as most businesses increase in profits, there tends to be a corresponding spending increase. Unfortunately, this type of spending creates a vicious cycle that can become a never-ending financial carousel.
Most people don’t have an income problem; they have a management problem. So the good news is that income and management are within your control. But what isn’t in anyone’s control is high inflation, the silent income killer.
Ever wonder why the price of goods and services is continually increasing? You’re not alone; many business owners and families often ask the same question.
Inflation is defined as the rate at which the cost of a good or service increases. Although prices can fluctuate for several reasons, inflation is generally a result of an increase in the money supply.
In short, as more money becomes available, the purchasing power of a single currency drops. As currency’s value decreases, the price of goods and services seemingly increases.
Inflation affects virtually every product and service. This way, your net profits seem lower, and your expenses seem higher with the same amount of work… the silent money killer is at work 24 hours a day.
For example, the cost of a dozen eggs surged more than any other supermarket item, from $1.79 to $4.25 from January 2022 to December 2022 in America. Could they get any pricier? Indeed, they could. U.S. President Joe Biden told America that food inflation was cooling when January ended. But egg prices had risen by another 13.5% by January 2023. Making eggs unaffordable for many American low-income families.
But there is good news: inflation may spin your head while shopping, but a small amount of inflation is healthy and suitable for businesses. For example, it could cause an office space mortgage or a car payment more affordable. Prices may be rising, but so is your ability to cover the costs.
Here, I discuss broad personal finance rules that can help beat and break high inflation regardless of the country where your business is located.
Manage Your Personal Inflation
A bit of number crunching can strengthen your financial position in the world. Start with a short-term goal, such as writing down seven potential new income streams.
Take some time to answer the following questions about what you most desire. Then, you may have a revised Business Life Plan in the making!
What are your business dreams? As the CEO, allow yourself some “dream” time to clarify what you want. Be as over-the-top as you like. Then, write them down. There’s no limit to the number of dreams or their size. Life provides opportunities to let go of specific goals and add new ones. Infuse your Business Life Plan with all your business dreams and goals.
What’s important? Whatever is crucial to you should be reflected in your Business Life Plan. For example, you’ve always wanted to have more education. You may have wanted to travel but need more time or money. Never be afraid to become a renter. With high-interest rates and high inflation, a renter may be an excellent temporary option until the economy cools.
What do you want to accomplish? What deeds do you want to achieve? Now’s the time to write down what you want to do with your life. Is working on a church mission something you aspire to do? Do you want to win a work performance award in your career?
Then, calculate your business’ net worth—the difference between what it owns and owes. To calculate your net worth, list your assets (what you own) and your liabilities (what you owe). Then subtract the liabilities from the assets to arrive at your net-worth figure.
Like your personal network, your company’s net worth represents where you are financially at that moment, highlights your successes, and identifies areas requiring improvement.
If you have money left over, you have a net profit, and you can decide how to spend, save, or invest the money. However, if your expenses exceed the income, your company must make some hard choices.
Manage Your Lifestyle Inflation
Most individuals seek better vacations, bigger houses, and nicer clothes, giving significantly to their church and other causes. In other words, many people want to increase their lifestyle to benefit the business. But, unfortunately, as their salaries increase, so do their expenses. This is a phenomenon known as “lifestyle inflation.”
One of the main reasons people allow lifestyle inflation to sabotage their finances is their desire to keep up with the Jones. Competitive jealousy and the spirit of entitlement kill anything excellent and profitable in your life.
What standard of living do you desire? Your answer will describe the life you want to lead. Do you want to live in a high-rise apartment in the city? Do you want to own your own farm in the country? You may prefer to live simply, pick up, and go wherever you want.
You may want to earn more money, live in a large house, drive an expensive car, and enjoy wearing expensive clothes. In essence, you seek the high life.
Thoroughly investigate what standard of living you want so you can include it in your Business Life Plan. Search your soul. There are no “wrong answers” when developing your Business Life Plan.
Manage Your Knowledge Inflation
Many people need more time, strategy, or knowledge to strengthen their financial future. In addition, many are busy with family, work, or running a business; this makes it challenging to keep up with the potential risks.
To overcome any financial weakness in your life, divine wisdom is found in Proverbs 11:14, “Where there is no counsel, the people fall; But in the multitude of counselors there is safety.” In my book, Never Chase A Paycheck Again.
A financial adviser can help you find financial safety, security, and strategy. Certainly, my company, Conquer Worldwide LLC, can help.
Manage Your Relationship Inflation
The most valuable currency during high inflation is Human Capital, people. So where do you go build significant and potentially profitable relationships? An empowerment organization for Christian Business Owners, like Kings & Priests, Inc, is one such organization you should frequent.
As you grow your business, are you spending time with friends and family? Generally, the happiest people make time for their family and friends. If this issue is important to you, include it in your plan.
Are self-improvements high on your list? Striving to excel helps keep you moving toward your life goals. Include short-term achievements for many areas of your life.
Develop your Business Life Plan soon, and feel free to change it as your wants and desires evolve while beating high inflation. Having a Business Life Plan keeps you focused on all your goals and will motivate you to reach for the stars.
Robert J. Watkins is the Chairman of Kings & Priests, Inc., a 20-year business and leadership organization to help professionals and ministry leaders create a profitable business and lifestyle while obeying God. And author of the bestselling book, Never Chase A Paycheck Again.
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