Nairalogue with Ifeoma Adeoye: 5 Tips For Managing Resourcing Towards Growing Your Wealth

This is a “started from the bottom now we here!” type of story.
A man and his wife lived and struggled through their days of humble beginnings together. Both uneducated, they started life in a one bedroom apartment and they survived on the man’s N40,000 per month salary. From this money, the wife would ensure that there was always a hot meal on the table every day, the children did not lack anything and they always looked neat and trendy when she dressed them up. They never lacked any supplies at home and she always managed to have all her needs met, never complained and never asked questions. The man felt blessed and indeed lucky to have such a wife.

One day, luck smiled on them and their fortune changed. They quickly moved from their one bedroom apartment into a mansion in one of the most affluent neighbourhoods in town. They indulged and splurged on the finest things life had to offer. They even went on family vacations every quarter. To say life was good was an understatement.

The man’s wife, not bothering to understand where or how their good fortune had come about, lived life to the fullest, with her new “society friends”. She had every new designer shoe and bag in all the colours available. She had an entourage of women who looked up to her and she gave them huge sums of money every day.

The husband, noticing that their new found resources had started to deplete fast, started fighting with his wife, saying that she was a “useless woman”, a “bad wife” and an “extravagant woman” who goes about spending unnecessarily.

Tell me, how did such a virtuous woman come to be described by such adjectives?

He loved her because she was good at managing resources when they were limited and working wonders to keep the wheels spinning. Now the wheels are spinning on auto pilot, her “management” skills are no longer required. What is required of her is to fit in, act like and keep up with the Joneses, which she is doing perfectly well, if I might add. No one ever told her or taught her to manage the wealth and/or grow it, No. As far as she is concerned, they are wealthy! She has never questioned her husband and she is not going to start now. She trusts his decisions 100% so she will go on and live her life, while he sorts out the finances. She cannot understand why he is complaining now and trying to be “stingy”. After all, she was there through the “thin” so why does he want to stand in her way now when it is her time to reap the “thick”.

In my opinion, they both must learn that the management of poverty and the management of wealth are two VERY different things. The skills required for both are also very different. The skills required for the former may come naturally, but the skills required for the latter may need to be developed and honed.

To manage and grow wealth, we must remember the following:

Do not spend more than you earn
Don’t spend all your income trying to keep up with the Joneses, you do not know the true state of their finances or the breadth and depth of their pockets! Your expenses MUST lag behind your income.

Have a financial plan
You need to take action/steps to manage and grow your wealth. It does not happen automatically! Set financial goals and work towards them.

Think ahead
Nobody ever wants to be in a situation where there is a drop in their standard of living. To prevent such situations, you must be deliberate about making sure that your money lasts for as long as possible. Actively invest your money and plan for your old age/retirement.

Build knowledge
If you made your money from an actual business venture, you must understand the industry and how the economic conditions of the country may affect it. If you are investing your money in financial products, you should try and understand the products, the numbers, the returns and how market conditions may affect your investment. It is your financial intelligence that makes you rich i.e. it is what you know about money and assets that makes you rich. Invest in your financial literacy.

Save for a rainy day
Diligently save a portion of your money to be able to respond to any curve ball that life throws at you. Savings does not necessarily mean keeping money in a savings account. You can also save by putting your money in long term instruments. The best thing about saving is that the money you save also grows, so it is a win-win situation!

Remember, start now, start small – just do it!

Photo Credit: Dreamstime | Sam74100