I would in no way claim to be a Personal Finance or Wealth growth expert. I’d just be sharing principles that I have learned, imbibed and regularly practice. As the Latin maxim states “Nemo dat quod non-habet”, when translated means, “You can’t give what you do not have!”
I have tried to break the tips into 4 sections, and truthfully they are actually very simple tips that we all know, have heard of, or practice already.
The defining difference between the rich and poor most times is the diligence and discipline to put to practice the knowledge they possess.
PRINCIPLE 1: FIRST WITHIN, THEN WITHOUT.
Our experiences in life are primarily a sum total of our thought life and our mindset. No matter what is resident in our spirits, as long as our minds have not been transformed to line up with what’s in our spirit, those things will never gain entrance into our everyday reality. Your mind is the gate.
Proverbs 27:19 (New American Standard Bible): As in water, a face reflects the face, So the heart of a person reflects the person. Proverbs 4:23 (New International Version): Above all else, guard your heart, for everything you do flows from it. Your predominant thoughts and belief system concerning money is what will naturally play out in your life.
Question Of Reflection: What are the wrong thoughts and belief patterns you have concerning money? Here are some:
- Money is the root of all evil
- What I have is never enough
- I need to get all I can, and can all I get
You should develop a healthy mindset concerning money (that is if we do not already). Make the necessary mindset readjustment concerning money. Here are some new thoughts to cultivate:
- What I have is more than enough to meet my needs and to have some more to give.
- I attract money. I attract opportunities to build wealth.
PRINCIPLE 2: KNOW THE STATE OF YOUR AFFAIRS
Peter Drucker said: “If you can’t measure it, you can’t improve it”. Proverbs 24:3-4 (Living Bible) also states:
Any enterprise is built by wise planning, becomes strong through common sense, and profits wonderfully by keeping abreast of the facts.
One of the most important and foundational principles for being financially healthy is to know the state of your finances. You should have a system for tracking what comes in and what goes out, where it’s coming from and where it’s going.
If this isn’t in place, you won’t be able to:
- know what your standard of living is
- know if you are living above or within your means
- make the necessary adjustments to plug and cut-off
- engage in proper financial planning to achieve set goals
Side Thought: I want to assume that we already know that financial health starts from learning to live within our means.
Have a Financial Budget
This is one of the most underrated healthy personal finance habits. I advocate having a monthly budget since most people (assumedly) earn income in a monthly cycle. Create a budget for your expenses and be diligent to live within that budget.
As a rule of thumb, what we practice personally, is to apportion our expenditure in percentages of our monthly income.
Here’s a rough idea of what should be covered:
- Tithe & Offerings
- Savings
- Rent Savings
- Givings
- Utilities (this covers your monthly upkeep expenditures – Feeding & Groceries, Internet, Cable TV, Electricity, Transportation (or Car Petrol as the case may be), etc.
I advocate also breaking the utility expenditure budget down into percentages of the total funds allocated to Utilities). Personally, apart from what is generally fixed percentages, such as Tithe & Rent savings, the others are arbitrary, subjective, and amenable depending on what the prevailing circumstances are.
PRINCIPLE 3: MULTIPLY!
Don’t just be fruitful. You must multiply. At a certain point, we need to stop working for money and make our money work for us. This is the path to growing wealth in the long term.
SIMPLE TIPS TO FOLLOW
- Look for other sources of income in addition to your primary source. Look to learn a new skill that’s in demand and monetize it. I advocate that you explore ways to market & sell your services beyond the shores of Nigeria and be paid in foreign currency
- Set aside a portion of your savings to channel towards investment vehicles.
Side Thought: Avoid get-rich-quick schemes. If it sounds too good to be thorough, it probably is. Don’t invest in trends. As a personal principle, I do not invest in vehicles which I do not fully understand, or if there is no tangible product being invested into.
- Here are some investment areas to explore:
- Stocks (both local & Foreign)
- Mutual Funds
- Agrictech
- Eurobonds (This is to hedge against the naira’s fall in value).
Please ensure you get expert advice before exploring any investment vehicle and determine your investment objectives and risk appetite before you delve in.
PRINCIPLE 4: BE AT REST
This last principle is one I adopt personally. Philippians 4:12 (New International Version) states:
I know what it is to be in need, and I know what it is to have plenty. I have learned the secret of being content in any and every situation, whether well fed or hungry, whether living in plenty or in want.
I have trained myself to be at peace and fully trust that God has my best interests at heart no matter what the external circumstances may look like. This is necessary in order to avoid making rash financial decisions that you may come to regret. This state of mind is also necessary to be able to condition your environment to attract the right opportunities.