Smart Money Thinking

Money is a commodity that we will keep needing everyday of our lives. One day in class, my teacher asked a very intriguing question. She asked, “is money everything?” Some persons gave positive answers and some gave negative answers. A guy in my class said, “money is everything, you can’t eat, travel, pay health bills without money.” Of course he is right. Well we still cannot deny the fact that money is not everything. There are many rich families that want what money cannot give, like happiness and peace. When you marry wrongly, you will see that no matter the amount of money you have, you will never be happy. Well this is story for another day, let’s not deviate from the topic. How can we really manage money and also create money?

Expenses and savings

It is said that poor people are the ones always trying to show off, you will see them spending any money just to look flashy and cover up their present status. Rich people are always thinking of the next investment to make to increase their income. Have you ever thought deeply about the saying that goes, “the rich gets richer while the poor gets poorer.” Look around you and find out if it is true. A smart money thinker should make sure that his expenses are lesser than his savings. A situation where your expenses are higher, you need to check yourself, something is definitely wrong somewhere. I know some persons that once they get their salaries, they just spend it on vacations and parties. How can you spend 50% of your salary in one day? There are so many things that we love that will always tempt us to keep spending but we should learn to control those urges. You would not want to remain a tenant for the rest of your life. Managing your money the right way can make you a landlord someday.

Avoid buying unnecessary things. In life we just need three basic needs which are food, shelter and clothing. If you have all these, you have everything and every other want is secondary. You must not go for that party and you must not go for that vacation. When your friends tell you to go out with them and you know that within you it will call for expenses that you didn’t budget for, you can come up with something else in place of the outing. You can tell them, “instead of the outing, we can do a mini get together at my place, I will do the cooking.” That solved the issue and you killed two birds with one stone. of course they are your friends and you wouldn’t want to turn them down, so you retained the relationship and you saved your money. Well there are moments where you just need to give yourself a good treat and relax, don’t neglect such moments, but in giving yourself a treat, always make sure that your savings are higher than your expenses.

Invest

Rich-Dad-Poor-Dad said that saving money will not make you rich. In fact saving money reduces the economy of a country. Do you want to know how? Look at it from this angle, when you stock all those monies in the bank, money will be out of circulation, the government will have to print more money and printing more money means inflation. When there is inflation, the price of goods increase and people will begin to complain. So saving money deteriorates the economy. If people can learn about this and invest more of their monies into good businesses, buy shares, money will just keep flowing. See how fast China has grown, now they are the richest country. They started investing in humans who in turn reproduced their knowledge. A country will grow faster when there are lots of investors. I think we should stop blaming the government all the time for our predicaments. It takes many men to develop a country. You need to work on yourself as an individual and your impact will affect the economy. You can start a firm that will employ ten workers or more or you can even start by employing two workers.

Employing people means investing in humans and then creating more money. One thing about investment is that you can always start little. I read about a woman that started real estate business with just one house and now she has lots of houses. I also know the testimony of a woman who started her bakery business from her home with just one oven, now she has a bakery company and she has employed lots of workers. Don’t wait for you to have millions of money before investing, you can start little. You can buy shares from companies and so on. Are you working in a company already? You can think of an idea that will take the company to the next level, when this happens, your effort is recognised and more money is added to your account. Bear in mind that your investment money is entirely different from your savings. You need to have savings for unforeseen life circumstances. And bear in mind that sometimes when we invest, the result doesn’t come immediately, it takes time before you can reap your profits. So you would not want to use all the money you have to invest. You need to keep some for your everyday need and life issues, and then you can invest the rest.

Avoid having only a joint account

This is for our married pals and most of the singles in the house will still get married. Don’t make the mistake of having just a joint account alone. Apart from the joint account you have with your husband or wife, you should also have a personal account. I wish all of us a sweet and bountiful marriage but we should always tell ourselves the truth, life is inevitable.

I read this sad real life story where love grew out of the marriage, the husband started cheating on the her. They had a joint account and one day he eloped with his lover, with all the money in their joint account leaving his wife penniless. So let us be wise in making financial decisions with our spouses. It is not wrong to have a savings account apart from the joint account in your marriage. This is just something that needs to be discussed between both of you.

Invest more

Don’t relax after one boom of success, there is always more that you can get. Do that expansion in your business, get that promotion at work, learn extra courses that will help your job and your business. You just have to keep moving, avoid being stagnant. Have you ever farmed before? If yes, you will notice that a plant keeps growing, they first germinate, then grow out and then bear fruit. If you paid more attention, you will see that they didn’t just bear one fruit, they bore fruits. They bore more fruits as a result of good soil, sunlight and nutrients. You constantly need nutrients in your life, because your business will not grow from one level to another if you didn’t do anything to it. Get knowledge, listen to people that have succeeded, learn new things, do more courses, know what to add and what to remove. Just invest more.

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