Don’t Save.

Well, Don’t JUST save.

Hello everyone! Happy Pre-weekend! lol…well, think of pre-wedding pics, today is Thursday, a “pre” to the weekend…Ahaha! So this is a continuation of my last Sunday rant of September 30th, and today is October 18th? I really need to get my blogging act together. 😦

Don’t save. Don’t JUST save. Which do you prefer? Well, personally I think they mean the same thing. We have all been bombarded by the “need to save” message. From our parents, friends, books, banks (saving account), social media, apps, financial programs and so many more, the general advice everywhere is to cultivate a savings culture or habit. And so a lot of us hope that we can save our way into becoming wealthy or financially free. But the truth is often told halfway, especially when it comes to money abi? When you and I look at our monthly paycheck, bills we have to pay and everything in between, we often get distressed. I have often wondered if just saving alone can bring the wealth I desire. Many times, the distress leaves us so discouraged that we just give up and spend our money. After all, you live only once. Better to enjoy this money now than be trying to save it and then die in the process when you have not even enjoyed anything. In fact, just work hard and play hard. lol

Well, one of the lessons that has quite sunk in recently for me is this statement: Don’t save. Maybe I have mentioned it here before. Saving is a trap that keeps you in a scarcity thinking. Just think about it. Saving makes you count your pennies. Saving makes you feel as though you have a long way to go and you could or may never get there. Saving makes it very easy to get discouraged and give up. Instead I want you to start changing your thinking from “saving” to “investing“. Believe me, I wish I knew what I know now some 5 years ago. My financial life would have been a lot more different. Everywhere you have “saving” or “save” written in your life, please change it to “investing” or “invest”. Instead of opening a savings account, open an investment account. Instead of “saving” 20% or whatever percent you choose of your salary every month, write down in your budget “invest 20%”. Make “investing” a bill you pay every month. Erase “saving” from your life and replace it with “investing”.

It is radical but it works. You know what that does? Investing makes you think about possibilities, abundance. It makes you search. It makes your ears open to opportunities. You are not just hearing but you are listening. You are interested. Your eyes are open. You want to know more. You want to learn. Your see the world with a different perspective. People see things that are dead. You see dead things that can bring value. You get my gist?

Now, don’t go rushing throwing away your money into every form of investment that comes by you. Knowledge is key here and we will discuss more on that later. Here is what I want you to know: You are loosing money when you keep it in a savings account. Why? Because the interest rates on a savings account in most cases is far lower than the inflation rate. So? It means that the value of your money is dropping everyday as long as the interest rate remains lower than inflation. Therefore, the value of #5000 in your account today is way lower than what it was last week and the interest your #5000 has earned has not helped you make up for that loss in value. So where should you keep your money? Investment accounts. They offer rates that are higher than the ongoing inflation rate. It means your money is not just sitting pretty but is at least increasing its value against the loss in the economy.

Where to start? Money Market Funds are a good place to start. Money market fund is an open-ended mutual fund that deals in short-term discount securities such as treasury notes, bank bills and promissory notes. Ok, I won’t bug you with the technical jargon. Just know that they are a safe way of saving investing your money and at the same time, easy to liquidate should you need cash for life emergencies. They offer interest rates that are much higher than your regular savings account, the inflation rate and you can count on the returns. This way, that 20% that you would usually “save” should just be transferred directly to your money market account where it goes to earn value.

How do I get started? If you are in Nigeria, many banks and insurance companies offer money market fund accounts that you can open within seconds. You can ask your bank if they offer any investment options such as Money Market Fund account. Just make sure they don’t trick you into something else…lol

I wish I knew this all along. I would not have multiplied savings account everywhere…lol…it would have been just one money market account. Anyways, as they say, It’s never too late to start again.

I hope I made some sense today. Feel free to ask questions or leave a comment. We are all learning. Here’s a sweet little video for good measure. Happy weekend!

Sunday rants

Happy Sunday y’all! How are you doing? Well, it’s been a bit hot over here! It’s supposed to be the rainy season, but every now and then it gets hot and then it downpours like mad afterwards! Ah! I like that part! So, here’s to the upcoming downpour! lol

Remember, I’ll be sharing what I am learning on my financial journey right? So, today is going to be a rant on a few lessons that have quite sunk in recently…lol You know how you know somethings – head knowledge it’s called – and you know them to be true, and you even say them over and over to others and in your conversations but it’s like you maybe don’t get the practicality or it just hasn’t quite sunk in. Then one day, Bam! You have the “Aha” moment. You then properly understand what it is that you have been repeating over and over again, but this time around you know you are actually going to do it and not just talk it. Ok. Enough with the rant. Let’s get to the real deal.

1. Net worth.

I am sure I talked about this sometime on the blog (will link up to it later). So what is net worth? To be sincere I have always thought net worth is calculated by men of well-to-do (is that how they say it?). I mean, you can’t be calculating net worth when all you have is a few change in your pocket and maybe some thousands in your account with a few personal debts here and there. Even though I talked about it a lot, I never quite got to figuring out mine. I thought I’d keep the head knowledge till I have invested in some properties or businesses and maybe a few million bucks to my name. Then I’ll be able to afford an affluent accountant to help me calculate my net worth, you know, living the wealthy life. I am still ranting ba?

Your net worth gives you a picture of your financial health. It is your total assets put against your total liabilities. I am not going into details here. However, your assets can be classified into Short term (investments of less than a year. Very liquid – savings, mutual funds etc), Long-term (investments of a year and more. Not very liquid – real estate, stock market, bonds etc) and Personal assets (things that you own that you can trade for cash e.g jewelry, car etc). Liabilities on the other hand, are what you owe. They could be Short-term (debts to pay back within a year), Long-term(debts to pay back within a long term), and Personal debts). Your net worth (Assets – Liabilities) could be positive (so your total assets exceeds your total liabilities), negative (your total liabilities exceed your total assets) or neutral (total assets = total liabilities).

Why should you know your net worth?

1. It helps you know the state of your financial health. Look at it as the annual medical check up you do to know how fit you are or the state of your ongoing treatments. Knowing your net worth helps you assess how bad or how good you are doing. Like they say, if you find yourself in a hole, guess what? stop digging! That’s what knowing your net worth helps you do. It brings you to a screeching halt if things are going awry and it encourages you to move further in the right direction.
2.  It provides a good starting point to getting started on your financial journey. If you don’t know where you are, how do you even know where you are going? Or what direction to move? Or what questions to even ask?
3. It helps you set goals. That’s like the most important of all. I have discovered that when it comes to finances, setting goals is must. You can’t just say in your head, I’ll buy land. I’ll invest in bonds. You got to know what you really want from those things you are saying, set those as goals, with timelines and all.

Wow! I didn’t know rants could be so long! And I only got started! Ok. I will save my other points for next post. So next post alert: we are still ranting! lol…Enjoy!

May you have a great start to the week. Remember, know your net worth!

Get on up!

When I started this blog, I was excited about getting started on my financial accountability journey no doubt. I thought the journey was going to be a straight line from here to over there at the top. But like all things success, it is never a straight line. No matter how much of an exception you think you are going to make of yourself.

So here I am. Two years or so after I started this journey and this blog. Life has definitely happened. The best things actually: I got married to my friend. And we have been blessed with a beautiful boy who looks so much like me and reminds me to get back on track. And yes, the not so great also happened: losing track of my financial goals.

But you know, its not over until you win. And it is OK to have many starts, as long as you keep on and are not discouraged. Each time, you get better at your goals and you discard what does not work. And eventually, you get there.

So welcome back. If like me you lost track, well get on up and lets go again. And if on the other hand, you’ve kept track and are making some progress, then keep on the good work! We are back at this together again!

We have so much to learn, so much to do and no time to waste!

image from edmulholland.com