By Okugo Ben for Heartmenders Magazine | Contributor, Africa
Money is a tool, not a goal. What do you use a tool for? We use it to make work easy (leverage). You cannot make money unless you understand how money works. Money has a universal characteristic. If you can’t make money in Nigeria, Pakistan, India, Togo, or Ghana, you won’t make it anywhere else. You’ll need to change your mindset to make money anywhere. The day I understood that money was an idea, that was when everything changed. Here are some lessons I took from the book, Rich Dad Poor Dad. They can change how you think about money.
1. Don’t work for money:
The Rich don’t work for money. If you work for money, your mind will start thinking like an employee. If you begin to think like a rich man, you will perceive things in a new way. The Rich’s assets are their employees, each worth good money to them.
2. Don’t let emotions control you.
Some people’s lives are always controlled by the two emotions of fear and greed. Fear keeps people trapped in a cycle of hard work and earning money. They hope it will reduce their fear. Secondly, most of us have the greed to get rich quickly. Yes, many people become rich overnight, but they have no financial education. So, educate yourself and don’t be greedy or fearful.
3. Get assets:
Don’t buy liabilities on your way to financial freedom. People buy liabilities and think these are assets, but they are not. Many people buy luxuries first, like big cars, heavy bikes, or big houses. But the rich buy assets, and their assets buy luxuries. The rich buy houses and rent them, and the assets pay for their Lamborghinis. The poor or middle class buy luxuries first, and the rich buy luxuries last.
4. Remember the KISS principle:
KISS stands for “keep it simple, stupid, or keep it simple and straightforward.” Don’t overload your mind when you are going to start your way to financial freedom. Things are simple; keep them simple. Assets put money in your pocket. Liabilities take it out. That’s the key thing to remember. Always buy assets so they put money into your pocket.
5. Know the difference between assets and liabilities:
Assets are anything that puts money in your pocket. Examples are stocks, bonds, real estate, mutual funds, and rental properties. Liabilities are anything that pulls money out of your pocket. Examples are your house, car, and debt. People think their home is their biggest asset, but it is not. A house is an asset if it makes money, like when you rent it. It is a liability when living in it becomes financially burdensome rather than yielding you income.
6. Don’t be financially illiterate:
A person can be well-educated and successful but lack financial literacy. Financial education is very important for any individual. Our schools and colleges did not teach us financial education. Many financial problems arise from a lack of financial education. Start learning financial education, and read the book “Rich Dad Poor Dad.”
7. Increase your wealth:
Wealth is a person’s ability to survive for many days in the future. It is how long they could survive if they stopped working today. Think about your wealth. Would it last if you stopped working for a year? Or for thirty years? That is the measure of your wealth.
8. Mind your own business:
If you have a job, keep it, start a part-time business, and work it. Use the time you spend on your iPhone, at parties, or on any other activity to build your business. Never leave your job until you build your own business. Don’t struggle all your life with someone else. Start your own business and grow your business.
9. Train your mind:
Your biggest asset is your mind. Many watch for chances with their eyes. But if you train your mind, you can see them with your mind. If you train your mind well, it can create enormous wealth.
10. Learn technical skills:
Learning these four technical skills will raise your financial IQ.
Accounting: It is defined as the ability to read numbers. If you want to build an empire, then this is an essential skill. By learning this skill, you will be able to understand the strengths and weaknesses of a business.
Investing: the science of making money.
Understanding markets: the science of supply and demand.
The Law: Those who know the tax and corporate laws can get rich faster than others.
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11. Find opportunities that everyone else missed:
“Great opportunities are not seen with your eyes. They are seen with your mind. “
You can see many more opportunities with your mind than many people miss with their eyes. It is not rocket science; you need to train your mind.
12. Learn to manage risk:
Investment is not risky; not knowing the investment is risky. If you want to reduce the risk, then increase your knowledge. You won’t get this knowledge from college. It comes from reading books or talking to investing experts.
13. Learn management:
The main management skills are:
Management of cash flow
Management of the system
Management of people
Sales and marketing are the most essential skills. Selling and communicating with others are key to personal success. This includes customers, employees, fiancés, friends, and children.
14. Manage fear:
Make good use of your fears.
“Failure inspires winners. Failure defeats losers.”
Everyone fears losing money.
Heartmenders Magazine’s financial and investment editors contributed to editing this article. This article, previously published on Heartmenders Magazine website, has been updated and republished with an enhanced new title.
Okugo Ben is a financial expert. He studied accountancy and had a second degree in economics. Contact him via email at okugouche@gmail.com.