Wednesday, September 13, 2017

Money is on everybody's mind. How to make it, how to keep it and how to spend it. There's a popular saying that "Money is slow to enter , but quick to go".  I've come to understand that money isn't actually quick to go if you understand how it works.

      I have been hunting down The Smart Money Woman by Arese Ugwu ever since it was released last year. I finally got my hands on it when my roommate bought the book. I pounced on it with so much joy in my heart. Prior to reading this book, the first financial book I ever read that awoke my interest in finance was Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter. Honestly, everybody should read this book , it changed my mindset and mentality concerning money completely. But that's not the focus of this post , today is all about The Smart Money Woman. 
      The Smart Money Woman tells a story about a lady , Zuri , who works with a real estate company and gets a six figure salary , drives a really nice car and lives in one of the nicest parts of Lagos . To all eyes , Zuri is a successful and rich lady but really she was broke and in serious debt. With help from her friends and other factors , she finally gets on the path to financial freedom. 

       The story has a Nigerian setting and though it is written from a female perspective, men can learn a whole lot from this book. I'm going to share just a few lessons I got from this gem of a book just so you could go get it yourself. 

1) The first thing is the way we view money. Rich people and poor people have different ways of viewing money ; the poor see wealth as how much you earn but the rich see wealth as how much of the earned income that can turn into assets that will generate income. 
      Like with Zuri, her 6 figure salary is enough to make people with a poor man money mentality to assume she's wealthy but the person with a rich man money mentality will know she has no asset , so she isn't wealthy.  Develop a healthy money mentality. Figure out ways to create assets no matter how little you earn because assets pay you without you having to toil or sit in an office from 9-5.
2)  Do not go into debt trying to acquire things that aren't assets. If you can't afford it , don't buy it. Being able to afford something means , you can easily buy 3 of that item without breaking a sweat. For example , if you have 50k in your account and you want to buy a dress that costs 15k , then you can afford it because you can actually buy 3 and still have change but assuming you have 30k in your account , you cannot afford to buy it.
         Borrowing isn't advisable to me but if you have to do it , make sure you're borrowing to obtain something that will give you money (asset).    Don't  go into debt or borrow to buy something that won't pay you. Don't borrow to pay for asoebi. Don't borrow to buy a car or phone. Don't borrow to look " fleeky" for an occasion , you get the drift abi? If you borrow to acquire an asset , you can comfortably pay off your debt from your passive income ( what you earn from your assets) but if you borrow to  pay for asoebi , you'll have to take our money from your own active income (money you work for i.e your salary) to pay back. 

3)  Develop a sustainable budget. Use the smart money budget. Divide income into three. Divide it into a) long term financial goal b) short term financial goal c) living expenses. 
       Long term financial goal is a portion of your income set aside with the goal of improving your net-worth (assets). It can be 20% of your income. Short term financial goal is a portion set aside to treat yourself. It could be a new phone , car or even a vacation. It can be 10% of your income. Living expenses is quite self explanatory. This is the portion kept for your day-to-day activities, bills , feeding ,etc. This can be 70% of your income.  Now for a practical example, let's say you earn 60k a month. According to this budget , you'll set aside 42,000 which is 70% for living expenses , 12,000 saved towards buying an asset (20%) and 6,000 saved towards your treat (10%). Now this is just a guideline, you can fix the percentage anyhow you want but the necessary thing is to divide it into three. 

4) Invest , invest , invest. Now I know the word "asset" can be scary especially if you don't earn a lot. Someone actually asked on Twitter how can I invest when I earn just 45k? Won't I eat?  Brothers and sisters , you have to eat. We all know assets are not cheap. But I'm here to tell you that you can invest as little as 5k and start earning from there. Most people don't know this. Investments come in different levels and forms. 
        The key is to find out what works for you. Research ! Stop using your data to just throw banters, jokes on Twitter and other platforms. There are various types of investments ; stocks (shares) , real estate (land) , mutual funds , treasury bills, etc.  Find a suitable one to fit your budget and your investment goals( why you are investing)
      Another thing is to establish your investment goal and develop a strategy. Know how much you are willing to risk. Contact people in the finance world , ask them questions. Read books. Expand your knowledge. 
5) Financial freedom is when your passive income can 100% sustain your lifestyle. When your assets alone can buy all your needs and wants comfortably, you are now financially free. This should be our goal. This is definitely my goal. One day I'll get there because I refuse to be broke forever. 
I'm going to stop here but there are so many things I have learnt from this book. Believe me , you need this book in your life. You can get it from here. She also has her Smart Money journal available and Lord knows I need that book in my life. So do yourself a huge favor and get this book and the money journal too if you can. 

Image source: @2scoopsofnikki, @marachie and www.smartmoneyafrica.org

    I hope I didn't bore you too much with this money talk. Have a blessed day. 
   The one who is the true light, who gives light to everyone, was coming into the world.
John‬ ‭1‬:‭9‬ 


  1. If you can't afford it don't buy it, very important lesson that needs to be learnt.

  2. If this is just a piece of this book then I think its a must buy by everyone. Think like a rich man, be a rich man