If you're a local business owner, now is definitely the time to get to grips with this stuff.
When we do our work we are compensated with money. It’s the tool we exchange for our time, skills, knowledge and energy. We pay our bills and maintain our lifestyles with our moola and the cash is ‘lost’ when we spend it. Am I right? Um… actually no.
You see, this narrow perspective is exactly our problem… Go Hustle spoke to Sanlam Financial Advisor and Investment Specialist Adele Barnard on how we can adopt a different attitude that’ll actually start making our bucks grow for us. Now listen up…
1/ First, we need to shift our perspective on moolah
In short: Don’t view your money as something that can be spent; instead, let it work for you… and then spend it.
“One of the best examples I can think of is one my lecturer used: The fruit and the tree,” begins Adele. “The fruit of your labour is your income. You can either consume it, or you can plant another tree and let it grow… and then you will reap the fruits of your labour i.e. let your money make money babies!”
2/ Then we need to jump on the investment train
It’s never too early or too late to start investing, explains Adele. “The best time to plant a tree is 20 years ago; the second best time is now. It is rarely too late to do something, and the action you take now will definitely have an effect. The same principle applies to investing – it’s never too early or too late to start. Just start.”
Albert Einstein said: “Compound interest is the eighth wonder of the world – those who understand it, earn it, and those who do not, pay it.” So, interest can either work for you or against you. The choice is yours.
“We need to understand that e.g. R100 in your account should not be used for instant gratification; rather view it as e.g. R110 in a year if you get 10% interest – making interest work for you,” says Adele.
3/ Don’t let interest work against you
Examples of interest working against you will be your credit card, retail account debt, personal loans, etc. Try to stay away from this kind of debt. “If you’re caught in the debt trap already, set up automatic payments for your debt.”
4. Shift your focus to a more positive outlook – even if you have debt
“Have a prosperity mindset, even though you are stuck with debt; focus on your savings, investment and growth – creating wealth,” says Adele. “By shifting your focus from debt to wealth, you focus on a solution, not the problem.”
5. View money as a tool
Use money as a tool to acquire things and enable you to do more of what you really want to do, explains Adele. “Review your money mindset – don’t let money dictate your emotional state. Say cheers to your old money mantras and believe you are a powerful money magnet and have a millionaire (or billionaire) mindset, because, after all, you create your own money mastery.” Cheers to that.