Author: Kingsley Mayor Omenaiko
Often times, our habits as human beings serves as a major propellant to our destination in life. With regards to finance, this is also applicable. Certain money habits can make one rich or poor.
The way a man works, earns, spends or saves money possess major influence to his financial health.
In order to build wealth, one must strive to imbibe the following habits :
1) Control the way you spend
There are no financial gains to reckless spending. One must strive as much as possible to imbibe the habit of saving.
One must as a matter of fact, avoid the act of impulse buying. Buy only things that are critical to you or things that you truly need.
A situation whereby you buy things that you never planned to buy is often referred to as impulse buying. So try to avoid them.
In order to avoid impulse buying, develop a personal budget for yourself and spend according to it. Your budget comprises of your revenue and expenditure.
Don’t allow your expenditure to be higher than your disposable income. Budgeting allows you to develop a disciplined spending habit.
2) Initiate a ” pay yourself first strategy “
This might seem a little bit complicated and difficult. But in order to take a bold step towards living a wealthy life, then it is a habit you must inculcate.
Try to keep a part of all your earnings to yourself. In the book : “The richest man in Babylon ” , Arkard said : I found the road to wealth when I decided that a part of all I earned was mine to keep.
As a salary earner, the number one rule is to set aside part of your monthly income in a saving plan irrespective of the enormous expenses you might be facing.
If possible, automate your saving by instructing your bank to move part of your salary to another account and make sure the account will be a fixed account.
When you save money it gives you the upper hand to invest which of course is the beginning of your journey to financial freedom.
3) Don’t just save alone, invest as well
The easiest way to multiply your money is through investment. If you want to become wealthy, then what you save must earn.
Just like a tree, wealth grows like a seed that has been sowed into the soil. One of the ways to invest could be to open up a business venture that is based on your passion.
You can as well invest in stocks, bonds, treasury certificate & bill, real estate, Agriculture, etc.
4) Model a financial goal blueprint
A financial goal will enable you to have a budget and as to initiate an investment plan. For Instance you could have a financial goal to build yourself a house, probably in 3 years time.
Once a particular goal have been achieved, then set up another one and keep on expanding your worth.
Focus more in acquisition of assets and not liabilities.
5) Avoid debt
Debt is one of the things that is capable of drawing you back from your goal. Despite any challenge you might be facing, avoid debt.
Too much of debt destroys your self esteem, shortens your power to make wealth and as well limits your creative thinking ability.
Always pay in cash for the things you purchase in order to stay away from debt. If you cannot purchase a particular commodity that is of interest to you, then save up and buy it. Avoid debts.
6) Set aside fund for exigencies
Man’s life is unpredictable. Nobody knows when emergencies will come up. Therefore it is advisable to keep some funds available for unprecedented contingencies.
7) Make sure you diversify
Diversification in this context means creating more sources of getting money for yourself.
In whatever you do, try not to lay all your eggs in one basket. Have various streams of income.
This will enable you to grow financially and as well give you lots of experience.
8) Self development
An investment in making yourself better is one of the best decisions one can make. No matter how fulfilled you are, no matter the level you are, always strive to make yourself better.
Read, learn, educate yourself in order to be able to run your investments and work smoothly.
Attend seminars, workshops, conferences about business. Mingle with Successful entrepreneurs and learn from them.
Try to distinguish between assets and liabilities, needs and wants. For Instance: Buying a land is an asset. A land bought at the price of N2,000,000 could be resold later at a price of N3,000,000
Buying a car worth N4,000,000 does not mean that you will resale it at a price of N5,000,000. Rather the price goes down whenever you plan to sell it.
Your needs are important because you cannot live without them. But your wants are your desires which definitely you can live without. So know the difference.
Learn to sacrifice the pleasure of today for the treasure of tomorrow. I will draw the curtain to a close here.Goodluck in your journey to wealth. Kind regards.
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