BUSINESS INSIGHT: THE FOUR FINANCIAL CIRCLES
Have you thought about why it is a struggle for many of us not to spend business money on personal needs, even with all the talk about financial discipline? As simple as this question may sound, it would take lots of people several months if not years to answer.
Whether we are counting millions or thousands, buying or selling, saving or spending, the subject of finances is one we can never stop learning about. Without exaggerating, I would say we are confronted by different financial challenges daily but for some reason, most people consider financial topics too sensitive. This is the reason why you find a good number of persons especially entrepreneurs rarely discuss their financial struggles and secretly search for ways to survive.
The quest for survival has put a reasonable number of emerging entrepreneurs in a difficult position when negotiating payment terms with clients. They often sell themselves short in exchange for any amount just to meet their present needs. This has ultimately inhibited the growth potential of so many ventures.
From critical observations backed up with research, I have summed the financial circle into four. Every individual and entrepreneur can be categorized under one of them. I have come to believe that the circle or stage one is determines their financial decisions. Here are the basic four financial circle;
SURVIVAL: This is the base level where folks practically struggle to get through each day as it concerns basic necessities like food, transport fare, shelter, etc. Folks in this circle are usually the first casualties when there’s hike in the prices of general consumer goods. However, there’s a grading within this circle just like all others, not everyone is exactly at same level.
COMFORT: This circle is just above the previous, basic things of life isn’t much of a problem here. People in this category just want to be comfortable enough to live in a good home, buy the gadgets they want, send their kids to good private schools, afford one or two trips abroad, and so on. There’s also a grading in this circle, not everyone is at the same level. Beyond that, some people shuttle between this circle and the previous one, others remain here perpetually while some others proceed to the next.
SUSTAINABILITY: At this level, comfort is no longer a person’s quest, it is settled. Folks here are more concerned with how to maintain their quality of life and create a fortune for their heirs. People here take investments more seriously; they want to own properties and assets, anything that gives them some level of security.
LEGACY: This is the stage where money isn’t a problem anymore. The world’s top billionaires belong here. They are hungry for impact; something with their names crested on it; own a football club or something of that sort, set up a foundation tackling one major problem the world laments about, or re-engineer the business itself to offer greater value to the world. By all means, they embark on legacy projects. So long as it takes money, there is nothing they cannot afford.
Not everyone starts from ground zero by the way, but everyone belongs to one out of the four circles at each point in life. I am an advocate for people to live within their means and be contented with what they have per time even when hoping and working to improve their lot.
Which financial circle do you fall under and what plans have you been making to progress in order to build your enterprise?
Written by Maple Dappa
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