How To Profitably Manage Your Income And Grow Rich

How To Profitably Manage Your Income And Grow Rich

The life of a civil servant in Nigeria is enmeshed in a cyclical regime of working and not being adequately compensated for the work done and when seemingly well compensated, the employer i.e. Government in this case often find it difficult to pay the salary in full as at when due. Such salary debt is pushed forward for payment at a future convenient time that is why the arrears vocabulary will hardly disappear from the thought and tongue of the civil servant. Recent events in the health sector further attest to this. Health workers were being owed salary arrears of up to one year or more.
The spiral effect of this on the affected workers left much to be desired. Government could not cater for the basic salary needs of its workers. It followed that workers find it difficult to feed their families and pay the school fees of their children talk less of caring for their dependants and ageing parents. Poverty stared many in the face and almost captured many people.
If I were to make a choice, I will prefer not to belong to such a discouraging environment where you are prone to de-motivation and low productivity. Do not think that the scenario reported above will not happen again. There is greater likely hood of its recurrence than otherwise.
You should find a way of getting your financial fortune out of the control of Government. This you can easily do if you take to advice of financial experts who emphasise that your financial freedom is not dependent on how much you earn but how you manage whatever amount you earn. The major goal you must set from now is to learn how to manage your money and beat inflation, grow financially as you progress in your career and prosper in any economy whatever the policy of Government may be.
I must warn you here not to think that your financial fortune will improve if only your salary is increased. That claim is not true. Experience has shown that most salary earners increase their liabilities whenever their salaries are increased that is why they are never tired of grumbling and borrowing heavily whenever Government withholds their salaries.
If you learn about how to effectively manage the money you earn, you will gradually snatch yourself from the claws of wage inconsistency and draconian Government policy.
Robert G. Allen in his book multiple streams of income emphasise on the need to acquire good money management habits as the 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 to your character money wise and your financial destiny.
Chief Nathaniel Idowu is a silent and humble millionaire in Nigeria today and also a great philanthropist but there was a time in his life when he was in the dungeon of poverty and financial failure because of his bad money habits. He thought that his life was being manipulated by diabolic means; you call it the work of the enemy but it was not so. He was his own financial enemy. He later went to a financial adviser who requested to know how the chief spent his salary as a teacher. He was jolted! There he learnt his first money management lesson. He could not give account of how he spent his salary. I mean he did not know the various outlets where his money went and for what purpose.
The financial expert advised him to start writing down on a paper item- by- item how he spent his money and that was how he began his journey to wealth as he later discovered through what he itemized that his money has been spent on frivolities i.e. pure liabilities. He understood that he was the one responsible for his financial woes and not any witch.
Now back to Robert Allen. His book spoke much 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 That You Can Gracefully Retire To Enjoy…



Money Habit 1: Value and Control It
The very first skill you must acquire is to value the money you earn. The money in your hand is likened to a seed. That seed could germinate and grow several money trees that will yield durable fruits in the future.
The one naira in your pocket is a potential million naira. You call that an exaggeration? Okay listen to this. Recently an analysis was done in the United States to know the actual value of a dollar several years ago as compared with its current value at the New York exchange. That one dollar was estimated to be more than $1 million. The money was put in instruments that overgrew inflation over the years.
You can now see why you must not undermine the value of that naira in your hand?
To practically achieve this goal, you must as a matter of urgency get acquainted with how you spend every naira you earn.
Strive to know more about your personal account. Categorise your expenditure outlets and spend your salary in that order. Have a record of your personal finance in a durable book.
I learnt this lesson very early enough when I started my working career. I quickly bought a hard cover ledger book where I record my money spending habits to keep track of how my salary is being 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 Government. I feel a kind of confidence and measure of power of that knowledge which has helped me to acquire financial discipline. I now know the true meaning of asset and liability.
Anything you spend your money on without the prospect of making more money is a liability. Period!

Money Habit 2: Save It
This one is not new to most civil servants. They know how to do this very well. Nevertheless, I must point your attention to how to do it for maximum benefit. Your savings should be a tangible percentage of your salary. Financial experts suggest you save up to 10% of your income and if you can do better than that, good for you.
One thing you must however work against is to allow your savings to be eaten up by inflation.
Your goal should not be only to save but to ensure that your savings in not left at the mercy of master inflation. Keeping devalued money is not worth the effort.
You should adopt the principle of saving sufficient amount capable of sustaining you and your family for 3 months even if you are not paid your salary. The left over should be channeled to the next money management habit…

Money Habit 3: Invest It
This is what most civil servants lack the knowledge to do well. Some out -rightly avoid it for fear of losing their hard earned money and yet what they did not know is lacking is the right information on how to be smart investors.
I have taken it upon myself to speak to some senior civil servants on this matter; what I discovered left much to be desired. Some who invested put their monies on enterprise that will keep them enslaved after retirement. When are you going to enjoy your life if you still continue the same way you worked for Government after retirement? Your strength diminishes with old age so you must learn to invest your money in money instruments that has the potential to multiply the money while you rest.
Nigerians are becoming aware of the stock market potential but you must know the risk involved so as not to put your money in companies that will tie your money down and go belly up later going into extinction. Haven’t you heard of investors who bought shares in some companies that never communicate with them thereafter not to talk of giving them returns on their investments?
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Robber Kiyosaki an American financial expert spoke extensively on the 7 levels of investors that I will share with you briefly to further sensitise and empower you to put your financial destiny in your hands.

Level 0
These people have no money to invest. They either spend everything they make or spend more than they make. 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 categorized.

Level 1: Borrowers
These people solve financial problems by borrowing money. Often they even invest with borrowed money. Their idea of financial planning is robbing Peter to pay Paul. They live their financial lives with their head in the sand like an ostrich hoping and praying that everything will work out. While they may have a few assets, the reality is that their level of debt is simply too high. For the most part, they are not conscious about money and their spending habits.

Level 2: Savers
These people put aside a ‘small amount of money usually on a regular basis’. The money is in a lower risk, low return vehicle such as a money market checking account, savings account or certificate of deposit.
They often save to consume rather than to invest ( e.g. they save for a new T.V., car, vacation etc). they believe in paying in cash, they like the security 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. Generally they are 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 are actively involved in their own investment decisions. They invest in their education before actually buying any investment.
If you are not yet a long-term investor, get yourself there as fast as you can. This means that you sit down and map out a plan. Get control of your spending habits. Minimize your debts liabilities. Live within your means and then increase your means.

Level 5: Sophisticated Investors
These investors can ‘afford’ to seek more aggressive or risky investment strategies because they have good money habits, a solid foundation of money and also investment savvy. They are focused, not usually diversified. They often buy investment wholesale rather than retail. They are well educated in the world of investing and actively seek new information.

Level 6: Capitalists
Few people in the world reach this level of investment excellence. In America, less than one person in a hundred is a true capitalist. A capitalist’s purpose is to make money by synergistically orchestrating other people’s money, other people’s talents and other people’s time. It is the capitalist that provide the money that create the jobs, the business, and the goods that make a country prosper. These are the Kennedys, Rockyfellers, Fords, J. Paul Gattys etc.
There you have it; my menu on the 7 levels of investors. Read it over and over again to know where you belong and how you can improve on your money habits. Let’s now continue with money habit skills….

Money Habit 4: Make It
Making money is entirely different from investing it. This is the entrepreneural side of money. If you are not an entrepreneur yet, learn to become one. Everyone will need to create multiple streams of income in the future. The truth is no matter what profession you belong, the present world economy does not favour a monolithic career in a single life time. If the Nigerian Government could find it difficult to pay its medical professionals then that should teach you a vital lesson.
The crave for downsizing and re-engineering or reform by government and private establishments necessitate that you retrain yourself and acquire more money making, marketable skills.
Opportunities abound in computer communication technology for whosoever cares to improve his family financial fortune. You must learn the skills of being your own boss, even if you are working for a solid corporation and plan on retiring there. The world is just too insecure to make long term plan with one company.
You can make money from what you are good at. Get on purpose. Do what you love and the money will follow.

Money Habit 5: Shield It
Making money is one set of skills. Keeping it is another. As you work toward your financial goals, you will need to learn how to preserve the wealth you are creating.
You must learn how to get your homes, cars and business entities out of sight through corporations, trusts and family partnerships to build a financial fortress around your assets. Do not create problems for your wife and children after your death. Make sure they do not fall prey to greedy relations who went to reap where they did not sow.

Money Habit 6: Share It
This is the last money management skill I will share with you. You may not be able to set up education trust fund as Americans have done to their Universities. Remember the story of Harvard University which was rated the best in the world. Most of its facilities are not from the American Government but from wealthy Americans. You multiply what you have now through giving. The more you give, the more you too continue to receive. It is better to give than to receive.
Be a consistent giver. Pay your tithe regularly and consistently. Identify the needy around you and show them mercy. Remember that the ultimate purpose of having money is to help others.
Dear friend, here again is the summary of money management skills that will guarantee you a financially free future:
(1) value it
(2) save it
(3) invest it
(4) make it
(5) shield it
(6) share it

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Your Well Wisher

Benard Solomon
Investment Consultant