- Set Financial Goals for yourself. A city worker once asked to explain his purpose in life said ‘I dig the ditch to earn the money to buy the food to get the strength to dig the ditch’. Alas, no wonder then, the ditch gets deeper and deeper!
- Live on a BUDGET. Tell your money where you want it to go rather than be wondering where it went. Consumer debt has become a major crisis the world over. Master your relationship with money. Undisciplined lavishness is only a habit of vicious trap!
- Pay yourself a portion of your paycheck. This age old advice simply means that before you pay any other bills; you put money in SAVINGS first!
- Move from savings to INVESTING. At least 15% of your earnings should be diverted to acquire Assets. The ability to convert earned/active income into portfolio asset/ income will determine your degree of Financial Independence.
- Have clear comprehension of what an Asset is. My simplest definition would be: Asset: Puts money in pocket/ grows invested capital; Liability: Removes money from pocket/ eats from capital.
- Leverage yourself to use Other People’s Money, OPM, in building asset base. Note that this will be in the measure of how much you have accumulated yourself.
- Take advantage of any tax concessions available (Tax Avoidance). Tax Avoidance is legal, Tax Evasion is Illegal.
- Professional Management. Risks and returns are two side components of any investment. More often than not folks get exposed to risks they do not understand in the process of investing.
- Use your wealth wisely. Someone once said, “The reason most of us aren’t rich is that we’d spend it all on ourselves.” Give. Share. Help others. When you use money to make a difference, to have a positive impact, you get the chance to do more. Being greedy and selfish will not draw money to you. Investing in your community, will! Proverbs 19:17.
- Time. Time is of essence and the time to start was yesterday. The next best time is Now! One step at a time, at your level.
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Bernard Were is an Associate Financial Advisor at Waumini Investments. You can read his blog here and follow him on Twitter