Monday, 8 May 2017

Money mistakes to avoid

Yes there are ways to be rich and if you follow these guidelines you are actually on your way to riches. Here are some common mistakes that people make about money.

 Money Mistake 1

Never borrow money which has interest on top of it with the intention of starting a business (except for salary loans); only borrow to grow your business. This is because business takes a long time to grow and begin making profit, yet for most of the loans you begin paying back a month later or even earlier. Hence, never borrow to start a business expecting that business to be the one to pay back the borrowed money plus the interest. It cannot work like that.
If you need money to start a business you can apply for a grant. Most of which are free and do not require any pay back. Even though some require pay back they don’t add interest to the capital given to you. One grant giving organization in Nigeria is the Tony Elumelu foundation TEEP you can register here: Tony elumelu grant program

 Money Mistake 2

 You must have heard the saying. Do not count your chicks before they are hatched, or a bird in the hand is worth more than 100 in the bush. Never spend money you haven't received. For example do not collect product based on expected money. Don't even promise someone money based on a promise you have from someone else. Don't hear somebody say, "Ezra come to my office tomorrow at 9am and pick 2m" and you go and buy items on credit hoping to clear when the promised money comes. It does not work like that. When you get the money do whatever you want to do. The summary is that work based on what you have at hand.

 Money Mistakes 3

If you want to ever save any amount of money, whenever you receive money ensure you don't start spending before taking out the savings hoping that you'll save what remains. Take out the savings first before spending. That way you don’t get to touch your savings, normally what remains is zero. And things to spend on even incite their 'relatives' while when money to spend is not available we naturally find a way of managing. Check out how to manage your money here: How to stay out of recession
Or Your role in stopping recession

Money Mistakes 4

When you get an opportunity to meet a very wealthy person never ask for money. Rich people know that only a poor person that will always itch to ask for money anytime they see a rich man. That is why they always avoid the poor.  Ask for how to be rich or better still; ask for ideas on how to make money. They can even choose to give you money on their own after seeing that your ideas are great, but let getting money from them never be your objective.

Money Mistake 5

Keeping your seed instead of planting it. Many people stop at saving the money and just watching it grow big. Realize that the money being saved if a seed, and a seed only brings harvest when it is planted and watered. It's very, very difficult to save and have all you need to maintain your lifestyle especially after retirement. When you save, your savings are seed; plant it. When you just keep it some seeds begin to die (eaten by inflation and the likes). That's where I recommend that you read about the different types of investment you can use to grow savings. I am not necessarily talking about putting the money in a business because you can easily lose money on a business. I am talking about putting it in an investment.

 Money Mistakes 6

Never lend someone money you are not willing to lose. By the time you lend money, be sure the money has left you be contented in your heart that should the person not pay, you will not die. You should not even lose the person as a friend. If you realize the person can fail to pay you and you are ok then lend. If you find you would even hate the person's entire clan, please advice the person to go to the bank.

Money Mistakes 7

 Never append your signature to guarantee someone on a financial matter if you are not willing or able to pay the money. Do I have to explain that one? No. It's self explanatory.

Money Mistake 8

Avoid keeping within easy reach money you don't intend to use in the short term. Don’t for instance walk with 100k in your pocket when all you plan to do in a day cost 20k. You will always spend it no matter how self controlled you are.

Money Mistake 9

Avoid keeping money at inappropriate places e.g. in socks, under the pillow, in a pit, in the sitting room, in the bra, in a travel bag that you will place somewhere e.g. when in a bus. It will always get missing.

Money Mistake 10
Do not spend money on an item that you can do without (at least for the time being). These days when I pick money from my pocket, before paying for something I ask myself: What would happen if I don't buy this? If I find I can live with the consequences of not having that thing, I smile and walk away.
In other words spend your money on necessities not liabilities.

Money Mistake 11

Paying an amount that's not the minimum you can get that same value for. In other words, if you pay 70k for a shoe at Top man that you can get at 30k at Kejetia/Kanta. Arcade, that's a money mistake except for those who have achieved financial freedom.

Money Mistakes 12
Wanting to be the savior of the world by helping those  in financial need. My sister, brother you are not Jesus. If you find it so hard to say No to a financial demand, you may think you are practicing generosity when in actual sense what you are practicing is (financial) suicide.

 Money Mistake 13

 Consistently spending all you earn or more than you earn is like having a drum where you have an inlet that's smaller than the outlet. It will never get full. And should the inlet ever reduce significantly the drum will run dry. If you do it the other way round and the inlet is bigger, it will get full and even overflow. Hence, we have to always ensure we are widening the inlet while narrowing the outlet - all the time.

Money Mistakes 14

Thinking about short term only and forgetting about long term or thinking about the long term and forgetting about the short term. What of those who find they are one paycheck away from salary? Are they thinking about the longterm needs?

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