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Upgrade your financial sense

By Gbenga Adebambo
12 November 2022   |   4:08 am
Graduating from a university only shows that you are literate academically. It does not guarantee that you are financially intelligent.

Graduating from a university only shows that you are literate academically. It does not guarantee that you are financially intelligent. Some people erroneously believe that financial freedom is just going to school, getting a good job and saving for retirement. This is a blatant lie! Until you get to a point where you no longer work for money but money works for you, you are not financially free. It is not how hard you are working for money but how hard your money works for you that determines your financial freedom.

The difference between the rich and the poor is the decision they make with their money. In order to be wealthy, you will need a ‘special education’ on how to make, manage and multiply money. What did school teach you about money? The pathetic answer to this question for many graduates is actually ‘nothing’. Many graduates are struggling financially because school was not designed to teach financial intelligence. If you want wealth, you don’t have to be a genius, but you must be willing to do one thing – get financially educated. We’re taught in school to be employees and work for money rather than to be entrepreneurs and investors and have money work for us. You don’t build wealth by working for money; you build wealth by allowing money to work for you.

Money is definitely not the most important thing in life, but every important thing in life will require money. Relationship needs money. Peace of mind requires money. Your physical and mental health needs money. Your purpose, vision and dreams need money. Your general welfare needs money. Being a blessing to others needs money. Being responsible requires money. Propagating the gospel of God needs huge money. The list is actually endless! There are four levels of relationships in life: The first is your relationship with God. The second one is your relationship with people. The third one is your relationship with ‘self’ and finally, your relationship with money. The purpose of this piece is focused totally on your relationship with money because this is crucial and critical to your financial freedom.

It is lack of financial intelligence when people design their lives around their salaries. The poor rely on salary while the rich rely on profit. Living a salary-centric life is a sure path to financial frustration and bondage. Hear this: You can be an academic genius but a financial imbecile! You can be a graduate and still be financially illiterate. Likewise, you can be uneducated and employ graduates because of your great financial skills. Academic qualification is different from financial sense. I have seen a man working as a personal driver building his own house while his boss was still living in a rented apartment. This explains why we have more illiterates as landlords and graduates as tenants. Your financial future will put a great demand on your financial intelligence. In order to secure your financial future, it is not more money, certificates or degrees that you need but more financial education. Your first step to financial freedom is having the right mind-set about money. Don’t be a financial imbecile. Take conscious efforts to awaken your financial genius.

Money doesn’t make you rich, your money habits do. Your financial habits and not necessarily your degrees and certificate will determine whether you will be rich or perpetually poor. Some people believe that financial freedom is just going to school, getting a good job, saving for retirement and getting out of debt. Until you get to a point where your money works for you even when you are asleep, then you are not financially free. Many graduates don’t have financial freedom because they were never taught in school. Putting your money to work for you, instead of working for money is the only true path to wealth. Financial freedom is when you no longer work for money, but your money is working for you. That means, instead of money and finances controlling you, you are the one in charge. There is no real freedom in life without financial freedom.

The rich run their lives; the poor get run over by life. Robert Kiyosaki said: “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for”. The cure for poverty begins with financial skills and literacy. Many graduates are living under financial bondage because they depend on their employer or the government for their financial future.

Many graduates are poor because of poor financial and investment decisions. While poor graduates work for money, the exceptional make money work for them. Poor people get paid based on time; rich people design systems that pay them. The rich don’t trade their time for money, they acquire assets that make money for them. Poor people focus on saving; rich people focus on investing. Saving culture is good but must never be your destination. Your destination is in investment and giving back to the society. Saving is for financial discipline but intelligent investing is for financial abundance.

As a youth, you need the right money mind-set. Your relationship with money matters a lot. The major difference between the poor and the rich is their mind-set towards money. Your approach to money determines whether you will squander, maintain or multiply it. The poor see money only as a tool for purchasing while the rich see money as a tool for investment. When you give a poor man more money, his ‘purchasing power’ will increase, but when you give a rich man more money, his ‘investment power’ will increase. The rich has ‘investment edge’ while the poor has ‘consumer edge’! Most graduates are poor because they lack investment edge. You need knowledge and skills that will empower you to make informed financial and investment decisions.

Many youths are living in debt because they lack financial intelligence. You don’t need more money to stay out of debt. You simply need financial discipline and intelligence. I have seen a banker earning N200,000 borrowing from a teacher earning N30,000! It is not the size of your salary that determines your financial peace and freedom, it is the depth of your financial discipline and intelligence. It is a pity to see many graduates phones studded with money-lending apps. We live in a time where graduates borrow money with absolute impunity. Debt can lead to stress and serious psychological breakdown. In fact, there is a link between borrowing and sorrowing. Though there are good and bad debts, I advise us generally to have a healthy hatred for debts as this will make us become a more cautious borrower.

In simple terms, a good debt, which is one that is a sensible investment in your financial future, should leave you better off in the long-term and should not have a negative impact on your overall financial position. Examples of good debts are: Student loan, investing in your own business and mortgage payments. Someone with a good debt will also have identified the cheapest possible way of borrowing that money. Bad debts are those that drain your wealth, are not affordable and offer no real prospect of ‘paying for themselves’ in the future. Examples of bad debts are: Borrowing money to pay bills and or other credit, buying a brand new car you don’t need and planning a luxury holiday you can’t afford.

Your goal must never be job security because it doesn’t exist. Your goal should be a life-time of financial liberty. The rich get their money from assets, not jobs. An asset has the power to put money into your pocket whether you work or not. The rich make money from assets while the poor sell their time for money. You need to get to that point in your financial journey where you no longer sell your time for money and start making your money work for you. Get financial sense. Stop accumulating liabilities and start accumulating assets.