I think it’s best to start our week reminding ourselves some money mistakes that kept some people poor. If you must be rich; there are certain mistakes you must learn to avoid. You can avoid these mistakes – you know why? You have them beforehand! So, this should help you fortify yourself against them. This piece was posted to my private WhatsApp group by a member, and I felt I should share with us.
Money Mistake 1:
Never borrow money that accrues interest to start a business (except if you are paying for it through your salary); only borrow to grow your business. This is because business takes a long time to gain ground and begin making a profit, yet most loans repayments have to be made within a month of taking the loan or even earlier. Therefore, never borrow money to start a business expecting that the business will generate income to pay back the borrowed money plus the interest.
Money Mistake 2:
Never spend money you haven’t received. Don’t even promise someone money based on a promise you have from someone else. If someone tells you: “Paul, come to my office tomorrow at 9am and pick #50K” don’t go out to buy items on credit based on this promise, with the hope that you will pay off your creditor when the promised money comes; it may not come as promised and this will leave you in problems with your creditors.
Money Mistakes 3:
If you want to save, whenever you receive money, don’t start spending hoping that you’ll keep what remains. Normally what’s left is zero because as long as money is available to spend, the numerous things you can spend it on are also available. And when money to spend is not available, we naturally find a way of doing without it. That’s why I’ve learned to save with an INVESTMENT CLUB. Once I send money there, I assume I no longer have it. Before you spend any money, put your savings aside then spend what is left after saving.
Money Mistake 4:
When you get an opportunity to meet a very wealthy person, never ask for money. Ask for ideas on how to make money. They may even choose to give you money on their own after seeing that your ideas are great.
Money Mistake 5:
Keeping your seed instead of planting it. When you save, your savings are seed; plant it. When you just keep the seed (saving money) some seeds begin to die (eaten by inflation and the like). That’s why I recommend that you read about the different types of investment vehicles you can use to grow your savings.
Money Mistake 6:
Never lend someone money you are not willing to lose. By the time you lend someone money, be content in your heart that if the person fails to pay, you won’t die else advise the person to go to the bank or check elsewhere.
Money Mistake 7:
Never append your signature to guarantee someone on a financial matter if you are not willing or able to pay the money on their behalf. Do I have to explain that one? No, it’s self-explanatory.
Money Mistake 8:
Avoid keeping the money you don’t intend to use in the short-term within easy reach. For instance, if you need only #20,000 don’t walk with #100,000 in your pocket. If not, you will realize spending more that you budgeted.
Money Mistake 9:
Spending money on an item that you can do without (at least for the time being). These days when I pick money from my pocket or wallet, before paying for something I ask myself: What would happen if I didn’t buy this? If I find I can live with the consequences of not having that thing, I smile and walk away.
Money Mistake 10:
Paying an amount for something that’s not the minimum you can get that same value for. In other words, if you are in Ikeja and you pay #5K for a shoe that you can get at #3K at Oshodi market, that’s a money mistake except for those who have achieved financial freedom.
Money Mistake 11:
Consistently spending all you earn or more than you earn. It’s 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
Money Mistake 12:
Thinking about short-term only and forgetting about long-term or thinking about the long-term and forgetting about the short-term. For instance, Lydia was told that there’s money in land. She saved money over a long period and bought 30 acres of land. Now she has the land, but she is always broke. She is always complaining. She’s disgruntled, and she doesn’t seem to see herself earning from the land shortly. Now, let’s ask us: Having 30 acres of land and no money to feed your family or take a child to the hospital, is that wealth or poverty? I think Lydia only looked at long-term needs and forgot that she has short-term needs that require money. What of those who find they are one paycheck away from salary? Do they think about the long-term needs?