5 Money Management Tips When Financing Your Dreams to Reality

It is good to be driven and to have dreams that you want to turn into reality. As human beings, we are limited in resources—time, health, and money. I know something about financing seemingly unattainable projects, because eight years ago, I decided to come live in the US permanently, to live my American dream, and so far, I am not disappointed.

When you really want to do something, you need to plan for it. My family and I are looking forward to a family vacation in Florida in a few weeks, and so we have anticipated the needs. We have to take time off from our respective occupations, set aside money for gas, food, hotel, and extra cash for activities, and we also need to prepare for when we come back. The quote Failing to plan is planning to fail,” attributed to Benjamin Franklin, is exactly right, and once you have a plan, stick to it!

Here are five tips to help you jumpstart your dreams.

1. A dream is personal.

Some people’s dreams are so strong that at times they might feel as if they were yours. You must write down your own dream and develop it. Other people don’t need to know where it comes from, why it is your dream, or even agree with it. A dream is personal, and it is okay to communicate it to the world if you want, but only once you are well on the road to achieving it. At the time I am writing this blog post, I’m riding the MARTA train, and I feel like I’m riding into Nike’s, Adidas’, and Apple’s dreams, as well as those of other iconic brands. People walk proudly in these consumer brands, each of which started in the mind of one person.

Those individuals’ dreams were strong enough that you can wear them today, but don’t mistake them for your own dream. Other people’s dreams will only take you so far, and sometimes they push you away from what you want to accomplish.

2. Be honest with yourself: you need to know your financial account balances every day.

You should have at least four accounts: A cash flow account, a mid-term savings account, a long-term savings account (or 401K or IRA) and a credit card. These accounts have different purposes. Cash flow accounts are the ones that you use in your everyday life. In our family, we use it as a zero-balance account, meaning that we spend all the money that we have in it from one payment term to the next. These payment terms can be business revenue or paycheck cycles. Mid-term savings accounts are the extra money that we put aside every pay period; use this to plan for larger or unexpected expenses. As a rule of thumb, you need set aside at least 10% if you can, or more, depending on the projects you are saving for. Micro-savings can also work. I have been using Acorns to save and invest my spare change on purchases. Don’t fall into the trap where you don’t save anything at all! The third account is your 401K, IRA, securities account, or another savings account. We use these as investment vehicles. The fourth account is the credit card. Try not to go above 30% of your allotted credit limit, and if you must, have a plan in place to pay it back and get below 30% again as soon as possible.  You have liquid assets, mid-term assets, and long-term assets. Credit is NOT an asset; it is not your money. Credit is a liability.

3. Look at how your role models make their money, not at what (you think) they spend.

Don’t focus on what your favorite artists are wearing, unless it is a way for you to network better. Most celebrities don’t buy trendy goods—they are endorsing brands. I remember when the iPod Touch came out. Most of the music artists had this MP3 player in their video clips.

This is the same for the Beats by Dre headphones which many artists, the sports industry, and Lebron endorsed —He has his own category. Same story with Converse. Read this article if you want to learn more about their endorsement strategy.

It is true for most of the consumer goods—here you can see most of the consumer brand endorsement deals in 2018. And the result? All the kids want to buy Converse and drink Coke while rocking their Beats by Dre headphones powered by Apple. Steve Jobs made technology cool, as much as Woodruff made Coke the most popular drink after water.

Focus on how they manage their money, the investment deals that they are going after. People are focusing on Beyonce’s latest shoes, or Nicky Minaj’s most controversial statements, but did you know that most of these entertainment gurus have their own venture capital investing in high-growth companies?

4. Investing is not spending.

Types of spending are not all equal. Investing in a tool that makes you more efficient and allows you to advance your dream should not be considered regular cash-flow spending. The challenge for a lot of people is to distinguish what matters for their dream from just another distraction. We live in a society of consumption, and there are millions of ways for you to lose your focus and spend money in the wrong areas.

In some types of businesses, buying first-class tickets make sense, as it is a way to meet influential people who can help your business. In other businesses, it makes sense to buy $500 headphones that reveal special tonalities in music that are important to you. Adopting a me-too behavior, however, is expensive and doesn’t support your dream. You need to know what makes your dream special to make smart spending decisions.

5. Be honest with yourself: work on your dream a little bit every day.

Just like tip #2 and being honest with your money management, you need to be honest with your time. If you don’t work on your dream a little every day, it won’t come to fruition. It takes time to develop dreams and visions, and nobody but you can execute yours. Talking about your dream is not enough to make it a reality, and money is only a small factor in your success. You need to prepare and find the time for what you want to accomplish. You will always have reasons to procrastinate, but it should not prevent you from doing what you are supposed to do when you need to do it. Dreams take heart, courage, and dedication.

We all have resource limitations. I sometimes hear people expressing the wrong ideas about successful business people and their access to assets. These successful people have bigger plates to fill, and they maintain their focus on their dreams and projects. Dreams come true in stages, and to keep evolving, you need to keep challenging your skills and your knowledge.

 

“When I was a child, I talked like a child, I thought like a child, I reasoned like a child. When I became a man, I put the ways of childhood behind me.” 1 Corinthians 13:11

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