3 Principles to Money
In school we are taught many lessons ranging from simple things such as phonetics, simple addition to more complex lessons in physics, chemistry and mathematics.
In the household you may have been taught on brotherly love and in the process of time you learned how to intimately love someone.
Money, the very resource that we attend school and study hard for, slaving our selves through all nighters due to final exams, we were never taught how to manage and develop a relationship with.
As Johann Wolfgang Von Goeth said “many people take no care of their money till they come nearly to the end of it, and others do just the same with their time”. Let’s wise up on money management.
From my own experience and with the goal of attaining financial freedom I’ve realized that a relationship with money is based on 3 principles.
- How to Earn It
- How to Keep It
- How to Multiply It
How to Earn It.
They are various means by which you can earn money:
- Passive Income – This is income from Real Estate & Businesses.
- Portfolio Income -This is income from Stocks, Bonds, Reits and other paper assets.
- Earned Income – This is income from working a job.
Any of the above means will generate an income stream that you will now have to keep and multiply.
How to Keep It
This is where the true test lies.
Many stumble in this area due to being indiscipline, being unable to control their own emotions and desires.
Bearing in mind, “You must inconvenience yourself for your future” , you will have to learn how to develop budgets, implement strategies and use tools that will cause you to better control your spending.
Not freely spending as you like will then build the disciple you need to retain your income.
You will have to decide on your priorities. Prioritizing and budgeting will give you a clear way to spend your money and give your greater control. This point I can not emphasize enough.
How to Multiply It
The means by which you multiply your money lies not in saving but investing.
Stocks, bonds, real estate, mutual funds and even the latest trend cryptocurrency; are means by which you can multiply your money.
But bear in mind each of these bear their own risk and will require patience, especially the stock market.
In the words of Warren Buffet, the stock market is a device for transferring money from the impatient to the patient.
Learn how to navigate yourself through the above investment strategies and you will multiply your money.
Take these principles and learn how to develop your money relationship.
These books will surely show you the way to developing your relationship with money.