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MONEY MISTAKES PEOPLE MAKE


MONEY MISTAKES PEOPLE MAKE

Money Mistake 1
Never borrow money that accrues huge interest to start a
business. That is to say, 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: "Janet or
Rose, come to my office tomorrow at 9am and pick
₦30K"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 save what remains.
Normally what remains is zero because as long as
money to spend is available, the numerous things you
can spend it on are also available. And things to spend
on even incite their 'relatives' so that you spend even
more than you had planned. When money to spend is
not available, we naturally find a way of doing without
it. That's why I've learnt 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, 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. 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 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. I am not necessarily talking about
putting the money in a business, because you can
easily lose money in business. I am talking about
putting it in an investment.
Money Mistake 6
Never lend someone money you are not willing to lose.
By the time you lend someone money, be contented in
your heart that should the person fail to pay, you will
not die. You should not even lose that person's
friendship if they fail to repay the money you lent
them. If you feel the person might fail to pay you and
this will not affect your relationship with them, then
lend them money. If their failure to pay would make
you hate this person’s entire clan, please advise the
person to go to the bank.
Money Mistake 7
Never oppend 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 money you don't intend to use in the
short-term within easy reach. For instance, don’t walk
with ₦100K in your pocket when all you plan to do in
a day costs ₦20K. Like I mentioned in Money Mistake
3, there are always expenses available to gobble any
money that is within reach, so if you don't want to lose
it, put it away in a safe place.
Money Mistake 9
Avoid keeping money in 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
in a bus ... impulse buying is a devil that will keep you
busy!
Money Mistake 10
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 11
Paying an amount for something that's not the
minimum you can get that same value for. In other
words, if you are along east Legon road and you pay
₦5K for a shoe that you can get at ₦3K at Makola
market, that's a money mistake except for those who
have achieved financial freedom.
Money Mistake 12:
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. Hence, we
have to always ensure we are widening the inlet while
narrowing the outlet – all the time. Your side hustle
comes in handy!
Money Mistake 13:
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 of time 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 in the near
future. Now, let's ask ourselves: Having 30 acres of
land and no money to feed your family or take a child
to 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? Are
they thinking about the long-term needs?
Let’s take stock of our finances. How many mistakes
are you guilty of? Do you now feel better equipped to
do better with these tips?
My advice...
Save part of your income for your short term need and
invest part for your long term need.

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