Utilization Verses Accumulation
Developing a wealth utilization mindset, verses simply an accumulation mindset, has been fun and beneficial for clients and advisors alike. While traditional planning tends to focus on net worth and accumulation, we’ve learned to inspire cash flow ideas and better utilization of wealth with our clients, and they’re seeing dramatic benefits.
Rather than having your money "imprisoned" and tied up for many years until retirement, doesn’t it make more sense, and isn’t it more beneficial, to also have that same money meet your financial needs of today while simultaneously earning interest & dividends, and growing your wealth for tomorrow? And the more you used your money for today’s needs, the more you would accumulate?
Who couldn’t benefit from using their accumulating funds for car purchases, or for home improvements; WHILE those funds kept right on earning, as though you never touched a looney of it?
If banks find it so profitable - it’s their number one source for wealth - to take deposits and at the same time lend money, doesn’t it make sense for you and I to set ourselves up for the same type of profitability?
When someone buys a car, and pays cash for it, doesn’t one have to start from scratch and start saving all over again to build it up; and wouldn’t it make sense to instead have the cash still working for you, and have the car too?
Do you need to be utilizing your money differently? Utilizing it for cash flow? Banking is about cash flow.
Nelson Nash, author of Becoming Your Own Banker, says: “It’s all in how we think…..The whole idea is to recapture the interest one is paying to banks and finance companies for the major items we need in a lifetime.”
As financial educators, we must challenge the status quo and tutor our clients to cultivate a mindset where one dollar can do many jobs, where there is abundance as opposed to scarcity; and where, in the end, we discover a whole new financial world of wealth utilization and cash flow, not just accumulation and net worth.