Understanding money matters

HR-shutterstock_398451685-[Converted]Nigerian business writer Kenneth Doghudje offers his wisdom on financial success

Money is the oil that drives the engine of a smooth and successful life and many of us desire plenty of it. Sadly, few are able to reach the financial heights they desire and fall way short of achieving their financial potential. The reason for this may actually be simple – many do not understand money. Conventional schools shy away from it, while parents who failed to acquire it themselves are unqualified to teach their kids about it.

Truth be told, you cannot amass plenty of what you don’t understand. You need to go on a personal adventure studying wealth building strategies and even wealthy people if you want to be wealthy.

My personal study of money has led me to understand that:
1 Money-making is a process that takes time:
There’s no such thing as a ‘get rich quick’ scheme. Wealth is built step by step with loads of perseverance, belief and faith in your abilities to succeed.

2 Conventional education does not translate to wealth:
The current educational system produces highly educated people who are not necessarily financially literate – the richest people are not always the most educated.

3 Money must be put to work to produce more money:
The purpose of money is for multiplication, not spending. Money should be engaged in productive activity, with the objective of producing more wealth. It is imperative you set money aside so that it can produce more.

4 Money is a reward for solving problems:
The richest people are productively engaged in solving problems for the most number of people. People are looking for solutions and are willing to exchange their monies for it, thereby enriching solution providers.

5 Building wealth starts from the mind:
Wealth is the product of thought. In order to build wealth you must think wealthy thoughts, and convert them into reality by executing actionable plans towards their fulfillment.

6 We all need more than one source of income:
Current economic realities necessitate actively seeking opportunities where you can earn multiple streams of income because having just one income stream is grossly inadequate. Spare time can be utilised effectively to set up additional income streams.

7 You need to pay yourself first:
Wealth builders take out a portion of their income for themselves first before paying bills and other expenses. The poor spend everything on their expenses, thus leaving little or nothing for themselves. The portion that is taken out is meant for investment.

8 Savings goes with investment:
Saving money cannot make anyone rich. While it is important to have an emergency fund made up of at least six months’ living expenses, any other savings must be invested in profit- making ventures.

Try following these principles as the first step towards understanding and making more money. Set yourself a goal to better understand money in order to turn your financial fortunes around. Remember, increasing your wealth is not difficult when you have a better understanding of money.