You strongly desire to see your money grow from one shilling to millions. You desperately want those fairy tale money stories that you have heard about Njenga Karume, Chris Kirubi, and James Mwangi among others to happen to you one day. You have dreamt about having a lot of money and still woken up broke.
Money stress is your portion each sunny or rainy day. You are aging, your expenses are inching up faster and your incomes aren’t changing at all. You have put life-threatening expenses such as medical cover on the back burner and you hope that no one in the family gets sick.
You are tired of this meager money game and you are yearning for a break. You do not know exactly what to do or where to start from, you are the son of a daughter of circumstances. You were born in adversity and you are perpetuating poverty in the good world. When the census for the financially poor is taken, your name features prominently.
Yet it does not have to be like this always! You can break through if you learn a few tricks that millionaires have mastered. Some of their tricks are shared here below;
Saving, sometimes referred to as “paying yourself first” refers to the habit of putting money aside each time you receive an income to be used to carter for your short-term emergencies and also fund your investments.
Create an automatic way to transfer your money from your income account to your savings account through a bank standing order. It is advisable to save anywhere between 10 to 30 percent of your income. It is a good idea to split your savings into an emergency kitty, meaning short term unforeseen expenses and investments which are long term in nature.
For example, if your total savings are 20%, you could choose to have 10% posted to your emergency kitty while the remaining 10% goes to your investment fund.
Lower Your Expenses
Easier said than done for sure. However, growing your money isn’t exactly a cup of tea, it takes immense sacrifice. In all the financial advising engagements I have been involved in and even looking at my own financial struggles, living below your means is one of the most difficult financial tenets to achieve. In fact, living beyond your means, which means spending more than all of your incomes every month is the reason you do not have money to invest.
To lower your expenses, you must deliberately cut down your expenses in a ruthless manner. If you have several subscriptions to TV providers for entertainment, cut off most of them and retain one, what is the use of having 50 pairs of shoes when you can’t feed your family consistently.
The aim of leaving below your means is to ensure that you’re making more than you spend. This is not a financial secret, it is amazing how many people know they should be spending less than they earn, but very few really practice it.
Rich people are committed budgeters who know exactly how much money they’re making and exactly how much money they’re spending. They’re living below their means because they know that’s how money really grows.
There are several budget apps such as BwanaPesa that you can download right to your phone to get a handle on your expenses and incomes.
Look at your expenses and find places you can cut. By cutting back some of your discretionary spendings, you could put away hundreds more each month to save or invest for your future.
Increase your savings steadily.
Listening to Lisa Nichols (American motivational speaker) recently, she went on and on about how she was broke and broken in 1995 and saved to fund her dream. She increased the amount of money she saved each week by ten percent for three years. It was phenomenal, but it can be done.
Every so often, for example, each quarter, increase your savings by 1 percent, you will hardly notice a change in your lifestyle but you will be amazed by how much more you will be able to put aside in your savings.
Invest your money
The end result of saving your money and living frugally within your means is to create the seed money that will be available to you to invest in whatever investment opportunity that appeals to you. Investment opportunities range from Agribusiness, Cryptocurrency, Stock exchange, Real estate, currency trading to virtually anything you can do in exchange for the other person money, without limits.
Choosing an investment opportunity is one of the most complex but yet the most rewarding if done right. In Financial Matters seminars, we break down these opportunities to help you choose which investment is right for you at your every stage of life.
Sign up for our Turning your shilling into millions seminar and learn how to multiply your money.
Diversify your investments
Investing your money in different vehicles is a sure way to mitigate against total loss of your money should the investment vehicle crush on you. If you have all your money invested in real estate and there is a bubble, you can be totally wiped out.
Have your money spread out over time and space, that way, you always have some investment doing well when another is doing bad and this overall ensures that your money continues to grow.
Create an emergency fund
The first and most important step before engaging in investments is to create a basic emergency fund because expenses are creepy and will pop up when you least expect them. Your family member may be taken ill or your car may break down in the middle of nowhere in a bad corner of the month. Keep this money somewhere you can access easily like a savings account or a liquid fund and even though it won’t be earning much in interest, the cash will be available at a moment’s notice. Once you establish your emergency fund, you should begin investing.
At Financial Matters, we encourage saving in easily accessible vehicles such as Finmat Sacco.
As you can read, it is the day to day habits that determine your financial fate and there is really no limit as to how much you can grow your shilling. Your most urgent task is to grow your ability to manage the money that you have now and invest to grow into millions. At Financial Matters, we will help you on that journey.