You must gain control over your money or the lack of it will forever control you-Dave Ramsey. Here are eight truths that might just change your life.
- Watch the stories you tell yourself. The voice in your head can be your greatest friend as well as your greatest enemy. Too many of us fill ourselves with the noise of why we cannot do it, the resources we lack… Eventually, that is exactly what we end up seeing. We also tend to plug into people and conversations that reiterate the same message. If you want money to work for you, it’s time to change your story.
- Take Responsibility. You are largely where you are because that is where you have chosen to be. This is a very hard pill to swallow. There are some things outside our control but our financial situations are largely a result of our choices. Nobody put a gun to your head and told you to live where you live, eat what you do and even borrow. When you accept responsibility you also know that it is up to you to resolve your problems, not your employer or family or the world.
- Understand the difference between being a factory owner and a factory worker. You can look very good being a factory worker but if that income disappears you cannot afford your lifestyle. Should the same thing happen to the factory owner– he or she has a factory (assets) to sustain her/him even when not working. True factory owners often look like factory workers contrary to popular belief. They may not dress in the best suits, drive the fanciest cars or have nice sounding businesses. But all in all, they are in a better position. Begin thinking and working like a factory owner better yet start your own factory.
- Reframe what it means to do well. There are many of us speeding down the highway to poverty in a luxury vehicle. There is absolutely nothing wrong with the nice car but far too many of us have entered the never-ending trap of buying things for social approval. To win over attention which we often mistake for respect. There will always be a latest, better, faster car so this is a game that can never be won and will keep you in the rat race.
- Understand the value of time. What is your hourly? Take your monthly net salary and divide it by the hours that you work. How quickly do you spend that amount? If you are like most people it often doesn’t even take you an hour. So the problem is we spend money faster than we earn it. We can increase that amount by using time well. When not working do something that will add value to it along the way e.g. taking a course, learning something new etc. Also when making your next purchase don’t just look at the money but also ask if it is worth the time you have spent earning that money. Spend your time intentionally.
- Work backward and ask yourself what will be important to you in the next ten years or twenty years. In some of our Centonomy programs, we do it to even ninety years. This will start to show you what you truly value. In my book, Making Cents, I have talked about money not being the life but rather a tool or resource for life. This exercise helps you define what that life looks like and hence how money fits in.
- Create multiple income streams. Your job is one. Income from your business is one. There could be others. In our classes we are big fans of identifying non-financial assets such as skills, talents, hobbies etc. that can be monetized. It doesn’t have to start off as a big amount. The idea is to just start.
- Understand the difference between assets and flossets. Assets will appreciate in value, give you an income, and at times keep money safe. Flossets look very good but will often depreciate and cost you money. Assets can fund flossets. Assets will eventually provide you with an income that can sustain your lifestyle. They are your factory. Prioritize building assets.
Many of us wish we started getting our act together earlier. If you could start all over again, what would you do differently? Well just start doing that. It’s never too late. If not now, when?
Waceke’s book Making Cents is on sale. To grab your copy get in touch through waceken@centonomy.com Twitter@cekenduati/ Facebook Waceke Nduati