Let me share a real story about myself. It is important because there seems to be a belief that you cannot create meaningful wealth as a salary earner. WRONG! I did so and I’ll tell you how. Just follow these 3 money principles.
After a decade of working, I came to the sad realisation that I had been wasteful with and ignorant about money. I was spending like my salary was guaranteed and I didn’t think to set aside anything to buy assets.After a decade of working, I came to the sad realisation that I had been wasteful with and ignorant about money. I was spending like my salary was guaranteed and I didn't think to set aside anything to buy assets. @subomiplumptre Click To Tweet
When I think of how much land was in Ajah then and what I could have bought…NVM
Suffice to say, when my parents went through a bad bout of ill-health and there was significant family financial pressure, life slapped sense into me. I quickly repented and figured out I was doing something very wrong.
Around that time, I was lucky enough to come across a book called, The Richest Man in Babylon by George S. Clason. That book opened my eyes and changed my life. It led me to develop three principles for generating wealth as a salary earner. I still use those principles today.
Money Principle 1: PAY OFF YOUR DEBTS AND LIVE WITHIN YOUR MEANS
Essentially, by religiously setting aside at least 10% of your income every month to settling debts, you are forced to appease your debtors and to live on the rest. Also, by assigning strict percentages to your budget headers e.g feeding, transport etc., you learn discipline.
For instance, I dedicate an amount to GIVING. Once that budget is spent, I can say NO to every request with my chest. You must be literally dying to make me change my mind. Even then, the funds must come by sacrificing spending on other budget headers. I never borrow to give.
Money Principle 2: SAVE FIRST AND THEN GROW WEALTH BY INVESTING
Your salary is a seed. What you’re meant to do is to sow it to create wealth. But here’s a secret many won’t tell you – The best investment opportunities are only accessible when you’ve built some initial bulk capital.
As a salary earner, there are two ways to arrive at bulk capital – by saving assiduously every month and by using your 13th month or housing/car allowance, if you don’t critically need it.
Using this insight, I lived with my parents for a long time and used my housing allowances for 5 years to build capital. I also jumped buses and Okadas instead of buying a car. The savings over 5 years gave me incredible investment leverage.
Money Principle 3: DO YOUR DUE DILIGENCE AND USE EXPERTS
Many times, people lose their life savings to get-rich-quick Ponzi schemes. Instead of saving consistently to build bulk capital to invest; they try to leapfrog the process.
As you save towards investment capital, use only REPUTABLE COMPANIES with strong track record, regulatory oversight and significant asset base. You CANNOT AFFORD TO LOSE YOUR LIFE SAVINGS!
Tomorrow, I’ll talk about a platform that can help you save consistently.
In the meantime, talk to me. Why do you believe you cannot become wealthy as a salary earner? What’s stopping you? Let’s talk about it and find solutions. Leave your submission in the comment section.
You can also share your SALARY TALES. Is your salary not enough? Do you spend without budgeting or planning? Talk to me.
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She’s an Executive at @AlderConsulting, Strategist, Investor, Social Media Denizen and Chinchin Aficionado.