Finance blogger, Arese Ugwu, in this evergreen piece, published on her website,smartmoneywitharese.com encourages single girls to take charge of not only their personal finance but their financial prosperity.
Read the interesting piece below:
You are probably in your mid 20s, out of university, decent starter job, living at home with no real responsibilities. You feel like your whole life is ahead of you, so investing and saving can come later. The truth is there is no better time than now to set financial goals and learn about what investment opportunities are available to you.
1. Get Money
In order to maximize your earning power and have the ability to invest, you need to pursue a career you are passionate about and create multiple streams of income. This does not necessarily mean you have to become an entrepreneur. The reality is, not everyone is cut out to be ‘their own boss’ and you need to learn this early on. Being a boss is not about working for yourself and avoiding the discipline of a 9-5. It is about adding value and being a high performer, wherever you are. There are two ways to be stuck. (and you don’t want to be stuck in your 30s or 40s) Stuck in a 9-5 job you hate and stuck in an entrepreneurial role you can’t do. Turning your passion into a paycheck is more complex than it sounds. You need to figure out what comes naturally to you, than it does others. Just because you liked planning your wedding, does not make you a wedding planner. Liking something doesn’t mean its your passion, being good at it and willing to do what it takes to sharpen your skills, is what will turn your passion to profit.
2. Create a game plan for your money.
In order to take control of your money you need to devise a strategy that helps you allocate your resources efficiently and cultivate the habit of spending less than you earn and investing the rest in assets that generate income. (i.e mutual funds, real estate, money market products) The longer you leave your money invested the better your average annual returns will be, so time is on your side.
3. Change your money mentality
Again, if you earn a N100m and you spend a N100m, what you have left is zero.
People are generally good at working hard and earning money but they are terrible when it comes to scaling their consumption. If you can spend N250k on shoes, you should be able to make N250k in investments to match it.
4. Establish your Net worth
Aliko Dangote is not the richest man in Africa because he earns $23.5 billion as his salary. He is the richest man in Africa because his net worth (assets- liabilities) is $23.5billion. Therefore, building wealth is about using the money you earn to make more money by investing in building assets. For example, Tinuke makes N10m, invests N3m in land and spends the rest, assuming she has no liabilities and no other assets; Her net worth has gone from N0 to N3m. It’s not the number that matters but the progress. Set a goal to increase your net worth by 10% every year.
5. Your budget is your friend not your foe
Stop thinking of a budget as something that restricts you; instead think of it as something that tells you all the things you CAN do with your money. An easy way to achieve this is dividing your income into three parts. Long-term financial goal, (20%) short-term financial goal (10%) and living expenses (70%).
Cultivate the habit of investing at least 20% of your income before you spend 1 kobo every month. It doesn’t matter if 20% of your income is N10, 000 or N100, 000 if you are saving and investing consistently you will definitely be richer in a few years than you are today.
6. Run your own race
Nigeria is fast becoming a place where, it’s more important for people (women especially) to be popular and LOOK like they have money, when in actual fact, they are struggling behind closed doors, to uphold an image they can’t keep up.
Buying things just so that you can look as though you have as much money as someone else is silly. When Tinuke buys a bag to top Ada’s bag collection, what she doesn’t know is, Ada owns several properties, as well as an investment portfolio worth 80m, so she won’t be ‘soaking garri’ after she buys a designer bag. Sometimes, the grass is actually greener so don’t compare your beginning with someone else’s middle. Instead of competing with her, use her as a point of contact “Baba God, my own go betta’.
If you are caught up in this mentality it's important to focus on surrounding yourself with winners. Friends, who genuinely support you in your endeavors (because friendship is not a competition) and mentors who can guide you on your walk to greatness.
7. Money and relationships
It is great to be Mrs. somebody but its even better to be a force in your own right so you can be a value addition to the right man. Even if your goal in life is to marry a rich man, being financially literate could help you see through the smoke and mirrors ‘before you go enter one chance.’ Some rich men are not necessarily generous (you don’t want to be the woman who can’t top up her phone without asking her husband) or in some cases not necessarily rich because the more you look, the less you see.
There are many instances of women who ‘thought’ they were marrying into wealth or miscalculated because they saw Family money, a Range rover and a Rolex, that are now ladened with the sole responsibility of paying the rent, staff salaries and children’s school fees.
The bible says that it is the man’s responsibility to provide. 1 Timothy 5: 8 ‘ A man that does not provide for his family is worse than an unbeliever’. So being financially independent is less about not needing a man and more about learning to be self sufficient like the Proverbs 31 woman and at the very least having plan B, because even the most independent woman appreciates a good man to depend on.
We need to raise a generation of women who are financially literate. So that they are likely to become beacons of hope for survival in times of strife as opposed to cautionary tales of helplessness.
We implore every young lady who have read this piece to take the advice of Arese seriously. It is not for nothing that she was listed as one of the 100 most inspiring Nigerian women by Y!Naija.