Financial Security: investing in treasury bills

Treasury bills is one of the money market instruments or vehicle an investor can use to generate fixed interest income. Nigeria Treasury Bills (NTBs) are short term debt instruments issued by the Federal Government through the Central Bank of Nigeria (CBN) to finance short term expenditure. More »

Saving with a mission

Almost anything that starts out without a mission or purpose is doomed to failure from the start. Deep down, we all know we need to put some money aside for the future. More »

Warren Buffett’s quotes on investing

Warren Buffet does not need much of an introduction. He was the world’s richest man before Bill Gates overthrew him, and they are quite good friends. Warren has been in the stock market and business of investing to know what works and what does not. More »

How to manage rate risks in fixed income investments

Fixed income investments are a crucial part of a solid financial foundation. Fixed income investments are virtually risk free (if you are dealing with a solid institution) and your returns are guaranteed. However, there are rate risks involved More »

Cut your coat according to your cloth

You need to cut your coat according to your cloth if you desire to achieve financial independence, your cloth being your effective disposable income (gross salary less taxes, deductions, tithes/giving and savings). More »

 

Decide what you want for next year

Decide what you want

The year 2014 is gradually coming to a close. In the coming weeks, Christmas music will permeate the air. Nations and corporations have finalized their 2015 budgets. If you have not done so already, it is time to put your 2015 goals on paper. A key component of those goals is your financial goals for 2015. You can decide what you want for next year.

Herein lies our power – the power to choose. We can choose what we really want. We can choose what to focus our minds on. We can choose what to look out for – either how it can be done or why it cannot be done. There are no right and wrong answers. The answer is what you want it to be. The mind simply obeys your commands.

If you say it is impossible, your mind will respond “All correct Sir!” and get to work gathering evidence to prove the master’s point. After all said and done, we create our world by what we believe, say and do. Seeing that we have this awesome power to choose, what do you want for 2015?

The way we see things is the problem

The way we see things is the problem

Your biggest impediment to change is your current mindset. The current financial situation you face was created by your mindset. The mindset that got you into the problem will not get you out. If you do not change the way you see, you will keep doing the same things and expect a different result.

The way we see things is the problem. Until you see differently, you cannot act differently in a sustainable way. This is the main reason learning how to do something will not work by itself in the long run. You can learn how to save money, but if you do not change internally and see differently, you will fall make to your old ways and even wipe out the small savings you have been able to accumulate.

We see with the mind, not the eyes

We see with the mind

In my last post – to every problem, there is a solution, we can see that asking the right questions is critical to arriving at the desired solution. Consultants and coaches are trained on how to ask the right questions. If you have a challenge and ask the wrong questions, the effort will be dissipated in solving the wrong problem. The same thing goes with seeing. We think we see things as they are. The reality is that we see things our mind tells us to see. You see what you focus on. We see with the mind, not the eyes.

If you are in the market for a new car, the moment you decide on the make and model you want to buy, your mind will note it and start making you aware of that particular car anytime one comes within your vicinity. You start seeing the car all over town. Everywhere you turn, you see the car in different colours and year model, especially the colour and year you settled for. That is your reticular activating system (RAS) in action. When you decide something is important, your mind puts it in it’s watch list and the moment your eye scans the item, you brain triggers an alarm. It is like an SSS or FBI operative setting eyes on the number one wanted person.

To every problem, there is a solution

To every problem there is a solution

We are all faced with challenges, especially of the financial variety. When you are stuck in a rut, you believe there is no way out. Being in that place becomes your new normal, and getting out seems out of your reality. Some days ago, looking through the books in my study, my eyes fell on ‘Retire Young, Retire Rich’ by Robert Kiyosaki. Tears welled up within me as I reached for the book.

I first read the book in 2002 when I first started out my journey to financial freedom and independence. As I thumbed through the book, I remembered the goals I set and how impossible it seemed at that time. As it dawned on me that I actually exceeded those goals when I bid farewell to the rat race, tears of gratitude ran down my face. I was glad I was alone, because it scares my wife and kids to see me cry.

How to manage rate risks in fixed income investments

image: budgeting.thenest.com

Fixed income investments are a crucial part of a solid financial foundation. Fixed income investments are virtually risk free (if you are dealing with a solid institution) and your returns are guaranteed. However, there are rate risks involved, i.e. upon maturity of your investment, the rates may change and sometimes downwards. If you have no other source of income apart from your interest income, then you will be adversely affected when rates go down.

Here are ways you can manage rate risks to minimize downward fluctuations in your interest income.

Opportunity cost: what is the true cost of your purchase?

opportunity-cost

Quite often when making purchases, opportunity cost is the last thing on our minds. Our mind is focused on getting the item but we miss the often miss fact that by buying that item, we have lost the opportunity of using that money for something else, possibly something more important. When we make a decision to spend, we do not take time to think about what else we could have used the money for. By keeping a narrow focus, we often fall into the trap of impulse buying.

Saving money: you have to make up your mind

credits: inexfinance.com

Saving money is a mindset and a savings habit is one that has to be cultivated if you were not raised that way, or missed the lesson along the way. If you do not save money habitually, saving money is not a part of you, It is something you do as an afterthought. When saving money is an afterthought, then savings comes to mind after your needs and wants have been met, which in the real world means when you have run out of money.

You can borrow to save

borrow to save

This may sound very strange to many people. Borrow to save? Why not? There are two types of debts, good debts and bad debts. Good debts are used to acquire assets while bad debts are used to acquire liabilities. We are more used to borrowing to spend. You use money you don’t have to buy what you don’t need and then keep paying even when the useful life of the item is long gone. By the time you finish paying, you end up worse off financially.

To Borrow to save can be an asset when you borrow at a lower interest rate and save at a higher interest rate.

There is no excuse for not saving

There is no excuse for not saving. If you can pay taxes, then you can save. You can look at your savings as another layer of taxation – this time self imposed to secure your financial future. If you can borrow from a bank or your credit union and repay monthly, then you can save. All you need to do is to think about yourself and your financial future important enough to pay your self first – treat yourself with the same respect you treat the government and the bank, taking the money out before living on what is left.

If you do not attach enough importance to yourself and your financial future, you cannot get money to work for you. If you do not respect yourself, how do you expect money to respect you? Looking down on yourself is a manifestation of low self esteem and inferiority complex masked as false humility. You are to love others as you love yourself. How can you truly love others when you don’t love yourself.

Top 100 Finance blogs

Image: imaginovation.net

Financial freedom inspiration has been nominated as on one the top 100 finance blogs worldwide, coming in at 50. While I feel honored for being listed as well as acknowledging that there are bigger blogs that are more worthy, my focus is on the impact on lives in Nigeria, though I have received mails from around the world of people who have been impacted by this blog.

This blog was the inspiration for my book – Practical Steps to Financial Freedom and Independence and other upcoming events including seminars and talk shows.

The journey to financial freedom and independence is not just about becoming rich, but the freedom to live your dreams, and in the process give others permission to live theirs.