4 Fundamental ways towards financial productivity




In general the financial arrangement of a common man is like a rat wheel.  We earn, we spend, we earn again, we spend again and thus we remain on the wheel running not getting any productive outcome. Financial productivity is about having an arrangement of resources that will lead to a continual process of financial cash flow. Numerous steps can be taken from an individualistic point of view.

Robert Kiyosaki in his famous book "Rich Dad Poor Dad" illustrated the financial trap within which we all sort of get trapped in. It state that in a rat wheel  a rat keeps on running but remain on the same place after all of its efforts, similarly our relentless hard work towards earning may  keep us on the same place if we do not arrange a financial system that is self sustaining and productive.  Here are some basic and can do ways by which any individual can attain a productive financial arrangement.

1. Diversify

Diversify, diversify and diversify. Yes, in spite of the ongoing debate on diversification of financial source is a viable option or not, in reality it may be the key to ensuring a financial arrangement system.

For example: If you have a 9-5 job and you get a basic salary at the end of the month and that is good. However, if you diversify your source through buying bonds, stock, real estate or investing your money in any kind of recurring business then at the end of the month you will have your basic salary and a recurring income for sure. The decision of investing in stock market can be debatable but even if in current situation of the stock market, through understanding and long term focus an individual can ensure a recurring amount from this source.

Deposits in banks are too mainstream and the rate of return is diminishing and full of complexities, it can be also a feasible option if proper rate of return is available considering the time duration that will take to make a profitable result.

Last example of diversification is investment; you can invest in start ups, in other ventures, lend money to someone and even invest in your ongoing business for expansion. Money is not only for saving and investing; you do make use of money through increasing your standard of living but in the same time keep a portion for investing in possible sources. As Warren Buffet said " Do not put all eggs in one basket". Utilize your hard earn money through consumption, and fertilize your money through investment.

2.  Be a resource

The process of long term financial productivity is turning oneself to a valuable resource. By this the individual will create value for others through providing them service through the resources that are possessed by the individual and thus the cash flow of the individual will continue to increase. For example: You are a student, you can turn yourself into a resources through having multiple practical and useful skills. You can still be a student, simultaneously develop skills to get part time or outsourcing oriented tasks and if you really keep on trying success is for sure to come. Consistency in making oneself a resource will enhance the financial productivity in the long run.

3.  Focus Long Term

Rome was not built in a day, but they were laying bricks every hour. Similarly, financial success is a long term achievement. You have to put in your effort day in and day out even if it is a minute amount but eventually the result will flourish. Frustration and giving up will not lead towards financial productivity rather the journey has to be through consistency, persistency, and patience. Giving up on an opportunity or a financial venture will result in nothing. So, holding on to your financial arrangement is a must because it is better late than never.

4. Develop Knowledge

The brightness of intelligence shines over the darkness of ignorance. Financial productivity can be availed through the development of knowledge regarding the financial factors.  Assessing one's current financial situation, identifying the sources of finance that can be utilized, reading financial books to develop intelligence, discussing with experts and investors will develop the necessary knowledge that will make an individual capable of understanding the ways and methods towards  financial productivity.

When we can enhance our conventional thought and action process our life becomes limitless. Working our way up to the ladder of financial productivity requires pure dedication and focus.  Adapt with the opportunity, utilize the chance and accomplish financial productivity.

 

Editor's note: Use our personal loan calculator to find out the best personal loan for you.

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About the Author

About: 

Nafees is a business student, a freelance writer and a top-notch public speaker at dhaka toastmasters club.