It was the 18th century American businessman and politician, Phineas Taylor Barnum who said “money is good for nothing unless you know the value of it by experience” many years ago before Alvin Hall, a respected financial advisor and author later said that “the key to making better choices about your money begins with understanding your approach to earning, spending, saving and investing. Unfortunately, many youths especially do not understand these four keys to financial success.
Earning is your ability to gain or receive money through a given process or effort.
Spending is your ability to consume or pay out money and as well live frugally at the same time.
Saving is your ability to reserve money or reduce your cost of spending in producing a surplus.
Investing is your ability to live with delayed gratification and making your reserve/surplus grow without your direct effort.
Your earning power is fundamental to your livelihood as that is what determines how well you survive with your basic needs, and in like manner, spending becomes inevitable in a bid to meet these basic needs. Saving, on the other hand, is learning to keep a disciplined spending habit and investing is making your money (savings) work for you. Majority of people seem to understand the first three but that cannot actually make you wealthy. The last is what actually helps you to build wealth.
You can develop your financial capacity
Almost every major decision by an average Nigerian adult involves money and these decisions have a significant impact on their entire lifestyle and not just their finance. Unfortunately, people forget that their earning capacity does not grow much over time but expenses seem to grow rapidly over time. Since the majority of people live on their salary and may not be able to keep up with overwhelming expenses, it is only wise to begin cultivating some savings and investment culture.
Below are two powerful tips that can help you build wealth steadily
Save before Spending
It is only ideal to learn financial literacy from one of the richest men in the world, Warren Buffet, a renowned investor who once quoted that ”Do not save what is left after spending, but spend what is left after saving.” This, I have found out from experience, to be one of the most difficult things to do with your money. There will always be bills to pay and needs to meet which is why you must constantly remind yourself why you are saving so you don’t spend all your income and have nothing to save.
If you truly desire to build wealth steadily, you have to learn to save first before spending from whatever is left. If you try it the other way round, you will soon be found in debt. Platforms like Piggyvest, Wealth.ng, and Cowrywise offers you the opportunity to automate your savings and withdraw at due dates.
Consider short term and long-term investment
Who doesn’t like to get money alerts while sleeping or on vacation? Only investments offer you such privilege. This is the surest way to build wealth and achieve your life goals. There are different ways to doing this, such as investing your money in Stocks, Treasury Bills and Government Bonds, Properties, Businesses, Fixed Deposits, and even through other online platforms such as Piggyvest, I-invest, Wealth.ng, and Cowrywise which allows users to invest in pre-vetted, low and medium risk investment opportunities as going for the right investment can be a daunting task for many.
But how do you make investment a culture? A good way to start is considering a certain percentage of your income, 15-25% as savings towards investment and after a period of time, when the money would have increased and investment opportunities come knocking, you won’t be found grumbling for lack of money. Worthy to note that it is equally important to constantly study the latest market patterns and investment trends to successfully grow your wealth.