How to Develop Winning Money Management Skills

Is it true that more money will produce more fortune? Unsure. The life stories and habits of the rich do not support the popular belief that the more you earn, the rose bush will become your life. If money were to create fortunes for life, lottery winners could have remained very rich years after winning a lot of money. What about the great boxers whose fortunes have suddenly plummeted? Hollywood celebrities of yesteryear are currently living in abject destitution as a result of a lack of money management skills. You probably don’t want to stay in the rat race your whole life.

Robert G. Allen in his book Multiple Streams of Income emphasizes the need to acquire good money management habits like wealthy people do so that you can become wealthy and financially free. Your money habits will determine your financial future. Your money habit is the key factor for your character regarding money and your financial destiny. You will continue to experience long-term hardship and financial deficiencies until you learn the skills of profitable money management.

Now back to Robert Allen. His book talked a lot about what you should do with the money you earn during your working years…

6 Profitable Ways to Effectively Manage Your Hard-Earned Money

Throughout your working years so you can retire gracefully to enjoy…

Money habit 1: Value it and control it

The first skill you must acquire is valuing the money you earn. The money in your hand is like a seed. That seed could germinate and grow several money trees that will bear lasting fruit in the future.

Do you know that the only dollar you have in your hand is a potential million dollar? You call that an exaggeration? Okay, listen to this. An analysis was recently made in the United States to find out the real value of a dollar several years ago compared to its current value on the New York Stock Exchange. That dollar was estimated to be over $1 million. The money was put into instruments that outperformed inflation over the years.

Now you can see why you shouldn’t undermine the value of that naira in your hand.

To achieve this goal in practice, you urgently need to familiarize yourself with how you spend every dollar you earn.

Strive to know more about your personal account. Categorize your spending outlets and spend your income in that order. Keep track of your personal finances in a durable ledger.

I learned this lesson very early when I started my working career. I quickly bought a hardcover ledger where I record my money spending clothes to keep track of how my income is spent over the years. The mere knowledge of how I spend my salary in the last 5 years has opened my eyes to several other things like the determination to take my financial future out of the hands of the Government. I feel a kind of confidence and measure of power from that knowledge that has helped me gain financial discipline. Now I know the true meaning of active and passive.

Anything you spend your money on without the prospect of making more money is a liability. Period!

Money Habit 2: Put it away

This is not new to most public officials. They know how to do this very well. However, I must draw your attention to how to do it for maximum benefit. Your savings should be a tangible percentage of your salary. Financial experts suggest saving up to 10% of your income and if you can do better than that, good for you.

One thing to work against, however, is allowing your savings to be eaten up by inflation.

Your goal should be not just to save, but to make sure your savings aren’t left at the mercy of inflation. Keeping devalued money is not worth it.

You should adopt the principle of saving enough amount to support yourself and your family for 3 months, even if your salary is not paid. Any leftovers should be channeled into the next money management habit…

Money Habit 3: Invest it

This is what most salarymen never know how to do well. Some rightly avoid it for fear of losing their hard-earned money, and yet what they didn’t know was missing is the right information on how to be smart investors.

I have taken it upon myself to speak to some senior officials on this matter; What I found left a lot to be desired. Some of those who invested put their money into companies that will keep them in bondage after retirement. When are you going to enjoy your life if you continue the same way you worked for the government after retirement? Your strength diminishes with old age so you must learn to invest your money in monetary instruments that have the potential to multiply money while you rest.

Robbert Kiyosaki, an American financial expert, spoke at length about the 7 levels of investors which I will briefly share with you to further sensitize and empower you to put your financial destiny in your hands.

level 0

These people have no money to invest. Either they spend everything they earn or they spend more than they earn. There are many “rich” people who would fall into this category. Unfortunately, this zero level is where about 50% of the adult population would be classified.

Tier 1: Borrowers

These people solve financial problems by borrowing money. Often they even invest with borrowed money. His idea of ​​financial planning is to steal from Peter to pay Paul. They live their financial lives with their heads in the sand like an ostrich hoping and praying that everything works out. While they may have some assets, the reality is that their level of debt is simply too high. For the most part, they are unaware of money and their spending habits.

Level 2: Savers

These people save a ‘small amount of money usually on a regular basis’. The money is in a low-risk, low-return vehicle, such as a money market checking account, savings account, or certificate of deposit.

They often save to consume rather than invest (for example, saving for a new TV, car, vacation, etc.). they believe in paying in cash, they like the safety of money in the bank.

Level 3: Investors

There are 3 different types of investors in this group. This level of investor is aware of the need to invest. They are generally intelligent people who have a solid education. They make up what we call the middle class. However, when it comes to investing, they are often not educated…

Level 4: Long-Term Investors

These investors are clearly aware of the need to invest. They actively participate in their own investment decisions. They invest in their education before buying any investment.

If you’re not already a long-term investor, do it as quickly as possible. This means that you sit down and come up with a plan. Get control of your clothing expenses. Minimize your debt obligations. Live within your means and then increase your possibilities.

Level 5: Sophisticated investors

These investors can “afford” to pursue more aggressive or risky investment strategies because they have good financial habits, a solid money base, and also investment knowledge. They are focused, generally not diversified. They often buy investments wholesale rather than retail. They are well educated in the world of investing and are actively seeking new information.

Tier 6: Capitalists

Few people in the world reach this level of excellence in investing. In the United States, less than one person in a hundred is a true capitalist. The purpose of a capitalist is to make money by synergistically orchestrating other people’s money, other people’s talents, and other people’s time. It is the capitalist who provides the money that creates the jobs, businesses, and goods that make a country prosper. These are the Kennedys, Rockyfellers, Fords, J. Paul Gatty, etc.

There you go; my menu in the 7 levels of investors. Read it again and again to find out where you belong and how you can improve your money habits. Let’s continue now with the skills of money habits….

Money Habit 4: Do it

Earning money is completely different from investing it. This is the business side of money. If you are not yet an entrepreneur, learn how to become one. Everyone will need to create multiple streams of income in the future. The truth is that no matter what profession you belong to, today’s global economy does not favor a monolithic career in one lifetime. The yearning to downsize and reengineer or reform globally by government and private establishments requires you to retrain and acquire more marketable and profitable skills.

Opportunities in computer communication technology abound for anyone who wants to improve their family’s financial fortunes. He must learn the skills of being his own boss, even if he is working for a solid corporation and plans to retire there. The world is too insecure to make a long-term plan with just one company.

You can make money with what you are good at. Get on purpose. Do what you love and the money will follow.

Money Habit 5: Protect it

Making money is a skill set. Maintaining it is another. As you work toward your financial goals, you’ll need to learn how to preserve the wealth you’re creating.

You must learn how to hide your homes, cars, and business entities through corporations, trusts, and family partnerships to build financial strength around your assets. He does not create problems for his wife and children after her death. Take care that they do not fall prey to greedy relatives who went to reap where they did not sow.

Money Habit 6: Share it

This is the last money management skill that I will share with you. Remember the history of Harvard University, which was rated the best in the world. Most of its installations are not from the US government but from wealthy Americans. You multiply what you have now through giving. The more you give, the more you keep getting too. It’s better to give than to receive.

Be a consistent giver. Pay your title regularly and consistently. Identify those in need around you and show them mercy. Remember that the ultimate goal of having money is to help others.

Dear friend, here again is the summary of the money management skills that will guarantee you a financially free future:

(1) value it

(2) save it

(3) reverse it

(4) do it

(5) protect it

(6) share it