By Omale Peter Franklin
The saying that the love of money is the root of all evil " is not all true, as every evil deeds done in other to acquire money in most cases, it's not the love of it, rather, it is the lack of it(money).
It is amazing how money works, it moves from hand to hand, from one bank account to the other, one company to another and so on. Surprisingly, money flows in a cycle. We can relates its flow to a current that flows through an electric circuit. Since money is a means of satisfying human wants, and the desire to make money and grow rich is in all humans, how then can one break into this circuit so as to have money flow through them?
To provide answer to the above question, one or two questions like; what am I bringing to the table that someone is willing to pay for? How can I legitimately take one hundred thousand naira from someone's pocket without having to steal it? first needs to be answered. Perhaps, you might already be in this cycle but how large is the amount flowing to you? How large is the amount flowing from you? What is the ratio of the amount flowing to you to that of the amount flowing from you?
Well, it is important to note that before all these questions can be answered, you must first have a knowledge of how money works. If it is so as it is said that money is power" and that "knowledge (applied) is power" that means the amount of knowledge you have at your disposal of how money works, determines the amount of money you will make.
At The Opportunity Conference (TOC) that happened on the 14th of October 2017 at Ajose Lecture Theatre, Mr. James Maduekeh who spoke on Money Matters and Financial Literacy, discussed the five aspect of finance.
1. Income: from in / come, it means the amount of money that comes in. It could be in form of salaries for monthly earners, wages for daily earners. For students, it is in form of pocket money, gift money (scholarships, money from relative or friends)
2. Liability: this refers to anything that takes away money from your pocket. Examples; cars, clothes.
3. Asset: this is anything that brings money to your pocket. Examples; land, house.
4. Expenditure: this is the outflow of money. This includes the day to day expenses you make on food, transportation, clothing and so on.
5. Budget: this is the itemized summary of intended expenditure with expected income in mind usually within a period of a time. If these five aspect are well understood, plus the attitude of PAY YOURSELF FIRST, then, the road to financial freedom will become an easy one.
Paying yourself first, really deals with the choice you make over every income that you receive. It is the process that requires self-discipline, saving, investing, reinvesting, and commitment to it. Most people do not understand that you can't save after you finished spending, rather, you save first, then whatever is left can go into expense. It is not easy to climb on mountains like the one of pay yourself first, I call it a mountain because it is not easy to get to the top. You will need a lot help. That is why my advice for all those who want to embark on this journey, is to read a lot of books on finance, read books on savings, how to save, and investment, attend seminars that discuss money matters, if possible take courses on financial literacy, choose mentors who are on the right lane on how money works. With all these and continuous practice, in no time, the chain of "have not" will be far from you. On this note, let's look at how the money of the so called rich people flows, first they receive income, their income flows directly into their asset, then, from their assets they take care of their liabilities and expenditure.
Remember you don't need millions to make money but, what you need is to learn how to grow money.
The saying that the love of money is the root of all evil " is not all true, as every evil deeds done in other to acquire money in most cases, it's not the love of it, rather, it is the lack of it(money).
It is amazing how money works, it moves from hand to hand, from one bank account to the other, one company to another and so on. Surprisingly, money flows in a cycle. We can relates its flow to a current that flows through an electric circuit. Since money is a means of satisfying human wants, and the desire to make money and grow rich is in all humans, how then can one break into this circuit so as to have money flow through them?
To provide answer to the above question, one or two questions like; what am I bringing to the table that someone is willing to pay for? How can I legitimately take one hundred thousand naira from someone's pocket without having to steal it? first needs to be answered. Perhaps, you might already be in this cycle but how large is the amount flowing to you? How large is the amount flowing from you? What is the ratio of the amount flowing to you to that of the amount flowing from you?
Well, it is important to note that before all these questions can be answered, you must first have a knowledge of how money works. If it is so as it is said that money is power" and that "knowledge (applied) is power" that means the amount of knowledge you have at your disposal of how money works, determines the amount of money you will make.
At The Opportunity Conference (TOC) that happened on the 14th of October 2017 at Ajose Lecture Theatre, Mr. James Maduekeh who spoke on Money Matters and Financial Literacy, discussed the five aspect of finance.
1. Income: from in / come, it means the amount of money that comes in. It could be in form of salaries for monthly earners, wages for daily earners. For students, it is in form of pocket money, gift money (scholarships, money from relative or friends)
2. Liability: this refers to anything that takes away money from your pocket. Examples; cars, clothes.
3. Asset: this is anything that brings money to your pocket. Examples; land, house.
4. Expenditure: this is the outflow of money. This includes the day to day expenses you make on food, transportation, clothing and so on.
5. Budget: this is the itemized summary of intended expenditure with expected income in mind usually within a period of a time. If these five aspect are well understood, plus the attitude of PAY YOURSELF FIRST, then, the road to financial freedom will become an easy one.
Paying yourself first, really deals with the choice you make over every income that you receive. It is the process that requires self-discipline, saving, investing, reinvesting, and commitment to it. Most people do not understand that you can't save after you finished spending, rather, you save first, then whatever is left can go into expense. It is not easy to climb on mountains like the one of pay yourself first, I call it a mountain because it is not easy to get to the top. You will need a lot help. That is why my advice for all those who want to embark on this journey, is to read a lot of books on finance, read books on savings, how to save, and investment, attend seminars that discuss money matters, if possible take courses on financial literacy, choose mentors who are on the right lane on how money works. With all these and continuous practice, in no time, the chain of "have not" will be far from you. On this note, let's look at how the money of the so called rich people flows, first they receive income, their income flows directly into their asset, then, from their assets they take care of their liabilities and expenditure.
Remember you don't need millions to make money but, what you need is to learn how to grow money.
