6 Steps To Make Money Work For You
With over 200% increase in global searches for home loan calculators and over 500 searches for cryptocurrency investment in Kenya, amongst others in 2021, there is an increasing need to be financially literate.?
Financial literacy is the root of every wealth-building endeavour, and as with investment platforms and work portfolios, the possibility of wealth is higher.
However, with this increase in revenue generation, there is also a wide gap in wealth planning and management. We, as individuals, work so hard to have money, but the satisfaction is short-lived as a result of a deficiency in wealth planning and management.
Hence, as much as you have increased access to financial products and services such as mortgages, loans, debit and credit systems, investments, and insurance, it is also expedient to strategically plan them against long-term goals.?
As an individual, the process of wealth building is not restricted to money-making alone. It cuts across personal financial management, budgeting, borrowing, taxation, and investment.
These are the foundations of any form of relationship with money, and they would require a lifelong journey of learning.?
According to Standard & Poor (S&P), financial literacy is the ability to understand essential financial concepts in making informed decisions about saving, investing, and borrowing. This decision cuts across all processes, including spending.?
Here are steps to true financial freedom:
A financial plan assesses your financial situation, considers your long-term goals, and makes a plan to achieve them.?
To become rich, besides a salary or business income, you need to make money work for you. This is where prudent financial planning and investing come to your rescue. A financial plan enables you to construct a road map to achieve all your financial goals and helps to build a contingency fund for any unforeseen needs that may arise.
At its most basic, keeping track of your income and expenses regularly allows you to stay on top of your financial situation. You will be able to identify bad spending habits that you can easily change, as well as measure financial growth.
These can be done easily with the help of various financial management applications online. They are automated and easily used to measure your wealth-creation strategy, actions, and outcomes.
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The irony of contingency is that it is not always important at the beginning and most likely overlooked during the planning process, but in the end, it could ruin or frustrate your wealth creation process. Hence, it is advisable to view your objective and surrounding circumstances holistically so as to forecast contingencies and plan towards them.
What are you likely to spend outside of your budget this month? What changes are you likely to make to your work stream? What would be the next step if your investments dipped??
These, and so on, are what you must plan for to reduce the effect of the negative and also expand to receive the positive contingencies.
High-interest debt has eaten deep into the African system. Many people acquire high-interest debt for insignificant purposes and, in the end, struggle to pay it back. As it accumulates over time and becomes a lifetime financial burden. This is not a debt you should bear.
To overcome these disadvantages, avoid high-interest debt. But if it is unavoidable, weigh your options and target the high-interest debt with a goal plan. After that, calculated actions are taken to pay back immediately to minimize the risk.
As much as investment has become a new gold mine, a stream investment platform poses a lot of risks. One is the possibility of a market dip due to inflation and all, the other is the possibility of an investment scam. Many people have been scammed out of their investments and many have lost all their investments as a result of the recession and market dip. These indicate the need for market analysis and diversification of investments.?
A financial-centric individual should not invest in one aspect of the economy. It must be multifaceted.
This would help to mitigate risk and financial crisis, or at least help to provide a soft landing.
At the point you become successful with a steady stream of income, you have also become a threat. Security, such as police officers or the Economic, Financial Crime Commission, may want to know your source of wealth and loopholes, and there is the possibility of losing your wealth to legal cases, be it national, professional, or marital, as in the case of divorce. This is why you need to build protection around your wealth.?
Safeguard your business and assets with a strong protection plan, such as equity stripping, captive insurance, and so on. It is crucial.
Ultimately, taking steps to become financially literate is an important component of life that can ensure financial solidity, alleviate poverty, reduce financial anxiety, and stimulate the achievement of financial goals.?
This is why there is a plethora of online programs and tools at your fingertips that can assist you on your journey. Financial literacy is paramount to the development of today’s economic and financial climate.?