Have you ever wondered why so many people or even you are always coming short when it comes money. Even despite receiving lump sums month after month, the money just seems to disappear.
Can this be because of what you know or what you actually don’t know about your money or just money in general? We have all heard, “Knowledge is power”, so if you want to have power over money then you need to have some knowledge about money, the right knowledge.
“If you have got knowledge and have no money then probably you have got the wrong knowledge” – Grant Cardone. Since knowledge is so powerful, maybe it is the wrong knowledge you have about money that is overpowering you in the game.
OK, enough. Let’s get straight into 7 important things you should know about money if you want to win in the game.
1. Money actually grows on trees
What is money ? Besides the coins, money is actually just a piece of paper. So when people say that money doesn’t grow on trees, they are wrong, that is exactly where it grows, money grows on trees because money is just a piece of otherwise neutral paper that we assign value to in order to enable exchange.
OK, not to be carried away, when people say money doesn’t grow on trees, what they actually mean is that there isn’t enough of it around. And this is the number one wrong thing you know about money, money is actually everywhere.
It is truly like money grows on trees because there is just surplus of it in the world that is enough for everyone. This is the mentality you should have from today onward. Do away with the scarcity mentality that money is a limited edition or that its only a certain people that have surplus of it. And only then you will be able to realize that yes, Money actually grows on trees and there are enough leaves (money) for all.
2. Money is worthless on its own
Do I really need to say anything about this? OK, I will say it anywhere. We have already established that money is just a piece of paper, it means that even if you have a million dollars in your wallet, briefcase or wherever, it isn’t worth a dime just sited there.
However, you can and you should take that money and figure out where best you can ‘put’ it or how you can use it so that it can multiply it. Notice I indicated ‘ best’, where best or how best because if you jump to say that its worth nothing in your pocket and you just spend it loosely, or invest it blindly then it may be better to keep it ‘worthless’ after all. It is your duty to invest it wisely would you choose to.
It is no doubt that, the true worth of money is when it starts working, buying things it should buy or even better, working in well planned investments so that it can multiply.
In itself, money is worthless but what it can afford you, is what’s worth a million dollars.
3. It is a must to learn about money
When going for war, one first studies their enemy before engaging, to have an advantage over him. Same applies with money.
The only reason why most people are ignorant about money is that the subject is not taught in schools and it is because of this that most people struggle with money. It is rather awkward that people are taught to work for money but never about the money itself.
I myself, when I was in school I was told that money doesn’t matter, “forget about the money”., because you will be perceived as greedy and selfish if you focus on the money. For a very long time I followed this, to such an extend that whenever someone would try to ask me about money and my career (how much I would earn and staff), I would quickly brush off any ideas from my mind because I never wanted to hear about money, I didn’t want to be perceived as greedy.
This is the major problem because most kids leave school not knowing how to manage they money or what money really means in the modern world. It is no wonder why even the most educated, accountants, bankers, lawyers, doctors e.t.c come out broke from time to time despite attaining even highest level of education.
Now if we are to look at the most successful people in the world, it is no surprise that they spend time and energy reading and learning a lot about money. It simply proves that financial education is essential for everybody who wants to have power over money. Learn the principles of making money and how to keep your financial house in order here
4. Time value of money
Albert Einstein once said, compound interest is the eight wonder of the world, he who understand it earns it, he who doesn’t pays it. This is because of the simple principle that money can earn interest or $1 received now is far better than receiving the same $1 tomorrow.
The time value of money simply denotes that money that is received or that is available at present time is worth far more than that same money in the future. For instance, if one is to get a $1 today, he/she could buy and resell with it until he has twenty times by the end of the day. Although this is not direct interest, it is clear that the same dollar that you have today has the potential to be worth even a hundred times tomorrow.
Moreover, an investor would prefer to receive $1 000 today rather than in the future because of the money’s potential to increase in value. If the money is deposited into a savings account, it earns interest (compound) over time and therefore grows in value rather than if it were to be received next year.
Read more about this very important concept in “the time value of money”
5. It does not take money to make money.
“It takes money to money”. We all have had this confusing statement. Is it rue though?
If it really took money to make money then I don’t think anyone would become a billionaire without being born in a billionaire family. Not to say that money is not required in order for one to make money but, the thing is, money shouldn’t be the first thing you are chasing after ( about money and becoming rich, if your only goal is to make money, you are doomed).
Some entrepreneurs, myself included say that, it is actually an advantage to start with nothing as an entrepreneur. Such an environment will force the creativity and resourcefulness out of you. And being creative and resourceful is the ONE trait that all entrepreneurs have.
If we look at people who started from absolutely nothing, for example Grant Cardone, it surely looks like coming from poverty is what made them. It is that drive to leave poverty, when you finally say enough is enough, when you decide to take responsibility about your mediocre life, it is that zeal what will make you money, not neccessarily ‘money for money’.
6. Money must be set up
This is more like an act of seduction and is the most important. A lot of people often fall into the trap of get-rich-quick schemes and unsurprisingly, most of those who often get disappointed. What one should clearly understand is that, it may not necessarily take money to make money but it surely takes time to make money.
So how does one set money up ? It’s all about INVESTING. I am not talking about investing money in some company hear, I am not talking about investing in you. First, you need to invest time and energy to study money deeply, learn the basics about money. You need to set yourself up for money if your truly want to acquire it.
Moreover, in order for your investments to be fruitful, you will need the appropriate environment, invest in like-minded people, people that will help you or push you towards your financial goals. This is crucial because your social network usually equals your net worth.
To simplify it, all you are doing is creating environment that seduces money, enabling it to stay or multiply around you. Find out more in the book How to get Money by David Jambrovic
7. Making money isn’t funny
The best investments take time.
If we look at the world’s richest investor, Warren Buffet whose worth about 85.1 billion USD, one might think that he accumulated his wealth gradually over his life but not so with this legend. Mr Buffet, 88 actually accumulated 99.7 percent after the age of 52.
Another typical example is the world’s richest man right now, Jeff Bezos, net worth 165.0 billion USD in September 2018, he started Amazon in mid 1994 but it continually lost money for its first several years. It was only 7years that Amazon started actually started making profits (in 2001).
The point I am driving home is, wealthy is a process and often a long one. It only comes as a result of thousands if not ten thousands small things that are done time after time. Most of the times, these are not things one likes doing but necessary for the accumulation of wealth.
You truly should go the LONG GAME! The good news is, the principles are same, get to learn more about money here
I hope you have enjoyed going through this article and you also have learnt some things about your money. Please leave a comment below and do ask questions if you have any.