The Sunday Mail
Living from one salary to the next can be very dangerous, especially in our current circumstances.
But there is often a perception that limits many from making crucial investments – the belief that you need a lot of money to invest.
SPENDING your hard-earned money is not a bad idea, but you have to ask yourself at what point you should spend and on what.
Living from one salary to the next can be very dangerous, especially in our current circumstances.
But there is often a perception that limits many from making crucial investments – the belief that you need a lot of money to invest.
This is a fallacy
Any amount can be invested with appreciable results.
There is, however, one crucial rule that makes this possible. In order to succeed financially, one needs to save money first and then invest.
Well, this must not be interpreted to mean that one cannot spend money on some things sometimes, but saving and investing must be considered a priority.
It is impossible to be frugal for the rest of your life. You need to make sure that the things you spend money on really make you happy and you are not just buying them to keep up or because you feel it is what you are “supposed to do”.Sacrifices will make you a success and the sooner you make those sacrifices, the better off you will be.
Most locals have a weakness for craving an opulent lifestyle that most often does not tally with their financial status.
As a result, they are susceptible to falling into a debt trap.
Such cravings will force many to rent houses for $1 000, yet they could save that money to invest into their own properties.In order to keep up appearances, some will buy cars worth $75 000 when they do not own any single property.
Indeed, priorities differ but wise investments are a necessity to life if one is to succeed.
A vehicle can be a huge liability if other aspects of your life are not in order.Cash can disappear but wise investments will live forever.
Even in accounting, a building has a lower depreciation rate than a motor vehicle.A house can even benefit posterity than a car.
This is just an example, but there are many other investment opportunities that one can consider.
Even though some investment opportunities pose a higher risk than others, at times it is better to take those investment opportunities than spend the money.
In one of his blogs, Strive Masiyiwa, the founder of Econet Wireless says, “If you do not know how to invest properly, you will never really have any wealth of your own . . .
“You might earn a lot of money working as a professional somewhere, even in the Diaspora. You might even be a very successful businessman or woman, but if you do not know how to invest, the money will just pass through you like a fast-moving stream of water.
“Investing well is not about how educated you are, because I have met many highly-educated people who have very limited understanding of how to invest. Everyone should try and understand what investing is, and what it is not.”
In life one definitely reaps what he or she sows.
If money is spent on the transient pleasures of life, it will certainly disappear for a fool and his money will always part.Well, it might be important to invest in life’s luxuries but foolishness is not an excuse for failure.
There are countless examples of businessmen who when they were on their way up invested in the wrong things and have now fallen on hard times.
Some argue that character plays an important role in business and it is of importance to be humble.
Living within one’s means is thought to be an instructive way to live if one is to be successful.
Stretching one’s budget is often fatal.
All this goes back to morals and principles which forms some key components of corporate governance.
If investments are done using the correct channels, it is possible to reap huge dividends.
In making investments, it is important to understand the business to be invested in.Of late, the tendency by many has been to stampede to do businesses that are perceived to be doing better.
An appreciation of the business that one needs to invest in and the passion for that is to be pursued can also provide the right tonic for a good investment.
Experts recommend thorough due diligence before any investment is made.Some invest on the stock exchange, some in properties and several other industries.
Every investment has a certain risk but taking a risk can be much more rewarding than putting that money to waste.
For instance, it is possible for someone who earns $600 per month to invest in a peanut butter machine, which usually costs around $300.
It is a risk that is worth taking.
Investing is an art and not everyone can be good at it.
However, if one wants to create massive wealth, they must spend wisely.
An introspective look at how you spend your money can help to understand the amount of money you are putting to waste.
You may be surprised with your own spending patterns.
Making big goals that you can visualise with excitement is the key to being successful.
Even if you just begin your investments career and try to save every penny, it does not hurt to make big goals for the future.
It also does not hurt to make smaller goals for reaching milestones.
Just make sure the rewards do not cost more than the goals!
Taurai Changwa is an Articled Accountant and Managing Director at SAFIC Consultants. He writes in his personal capacity and can be contacted at [email protected] or visit our facebook page SAFIC Consultancy. Or whatsap on 0772374784
