Wealth-Building Power Math: The B.A.S.E. Method (Part 4)
Image sourced by Dylan Gillis @dylandgillis
Welcome back!
Thank you for your terrific feedback on last week’s post: BAGR: Wealth-Building Power Math: B.A.S.E. Method.
Based on reader comments, we bring you the next segment in this wealth-building series – Wealth-Building Power Math.
Let’s dive back into How to Organize Your Money, Control Your Spending, Control Your Money, Achieve Your Personal Budget and Build Mountains of Wealth, While You Sleep!
One of the best ways to build wealth is to organize your money, organize your finances, track your money, save more money and make continuous progress towards your financial plan.
In effect, You want to control your money. To make sure that you use your dollars wisely and put them to the best possible use in an effort to balance enjoying life – spending money – and achieving your financial goals!
In Part 1 of this wealth-building series, we explained Compound Interest and Compound Returns and explored how you can capture their its power and. . .
In Part 2, we covered the Rule of 72. These two techniques offer great ways to manage your money, track your money and build wealth smartly and efficiently.
In Part 3, we covered The B.A.S.E. Method of Money Management.
You can also use The B.A.S.E. Method to track packages of events or programs.
In essence, you want to “Get Your Money’s Worth.”
Recently, my friend Melissa became a certified Yoga instructor.
She prices her classes as follows:
$20 per class when you pay by the class; and,
$150 for ten classes.
The ten-pack lowers your price to $15 per class from $20, a nice savings – 25% in fact:
$20 minus $15 = $5 divided by $20
Just like perishable foods, buying the ten-pack is a good investment IF you will use all ten classes by their expiration date or the date when Melissa stops holding Yoga classes.
You can use The B.A.S.E Method to track the number of classes you took and the number of classes you have left in your package.
Suppose that you set a New Year’s Resolution and on January 2 you purchase a ten-pack of Yoga classes for $150.
Before you take your first class, clearly, you have 10 (ten) classes available:
| Number of Classes Left | Date You Took the Class |
|---|---|
| 10 | N/A |
| 9 | January 5 |
| 8 | January 8 |
| 7 | January 12 |
Unlike the examples in Part 2 of this series where we tracked account balances, the idea here is to track the number of classes you have left before your package runs out and you have to buy more classes.
But the number of classes used and remaining translates into dollars.
Accordingly, I have input the number of classes remaining in the ten-pack in descending order.
After you attend (use) the 10th class, you won’t have any left.
Putting on my accounting and CPA hat for a moment, an auditor would reconcile the number of classes purchases – the ten-pack – and the number of classes taken and how many classes the Yoga Studio owes you.
Similarly, Example #4 in Part 1 in this series illustrated how to track your money regarding a savings goal – accumulating the down payment on your new car.
And Example #3 where we explored how to manage discretionary spending and stay within your personal budget and meet your financial plan.
A few years ago, I lost $180. My ex-girlfriend had purchased airline tickets for us to go to Hawaii. Due to COVID, we canceled the trip; I think the Governor shut down the country and blocked visitors. United Airlines gave us a voucher good towards another flight. I was unaware that the voucher expired on December 31, 2022. I’m sure she told me about the voucher at the time but I wasn’t aware that there was an expiration date. I wasn’t tracking it. New Year’s Eve came and went and the United Airlines voucher expired. Which was Annoying actually because I went to visit her during the Christmas break. Oh well.
Putting on my accounting and CPA hat again for a moment, an auditor tracks money, numbers and other financial stuff.
That’s the ticket to getting your money’s worth; saving more money; freeing up cash for investment; sticking with your personal budget; meeting your financial plan and building wealth!
Whether you use The B.A.S.E. Method of Money Management or another system, systems work.
They help you automate your personal budget and financial plan and save more money and accumulate more wealth!
While you’re at it, to free up more money (cash) for investing to help you reach your financial goals bigger, better and faster, take these easy steps to save more money on groceries. Click here.
That’s all for now.
See you next week,
Arthur V.
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