Uncomfortable Truths About Money You Should Face Sooner Than Later.
Number 10 is the most vital.
Money is a subject often avoided because it means facing certain truths people would rather not face. For example,
- people feel ashamed to talk about their debt; hence, they avoid seeking help;
- the pressure to maintain a certain lifestyle can lead to living beyond one’s means, which can be difficult to address due to fear of losing social status or being perceived as unsuccessful."
- discussions about financial abuse—a situation where one partner controls all the finances, limiting the other’s access to money can be embarrassing.
- discussing the full terms and conditions of a loan for some is scary,
- friends avoid being honest about their budget for outings.
- and couples avoid talking about their earnings and contributions to a home.
These avoidances always have long-term consequences if not addressed on time. Here are a few I have learned and am still learning to face:
1. To build wealth, you must take risk.
I’m unaware of any successful person who didn’t take the risk. I’m not talking about success in terms of money alone, but there is a percentage of risk-taking in every other outlook on success.
You cannot play it safe and expect to make an impact, much less build wealth. Go and study the top 20% of wealthy people in your country, industry, or area of interest—the first thing you will see is the big risk they took to get to where they are.
Mark Zuckerberg once said, “The biggest risk is not taking any risk. In a world that is changing quickly, the only strategy guaranteed to fail is not taking risks.”
2. Your salary alone can never make you financially independent.
Even if you are paid ₦10 million a year, it’s never enough to be financially independent. The most your “mouth-watering” salary can do for you is meet your basic needs and wants.
Someone earning ₦1 million a year right now might think ₦10 million, is a lot of money until he/she begins to earn that sum and realizes it is not a lot. Because the more you earn, the more your needs increase.
If you don’t invest that money in something that creates money, the ₦10 million will fizzle as soon as it gets into your account. Financially independent individuals are salary earners who use money to multiply money.
Check out a practical example of my point here
3. It doesn't matter how much money you have if you lack discipline.
I recently helped some individuals create a structured budget for their earnings. 2 out of 10 called back. They had gone overboard with the budget the same week.
Now, this is not only a habit problem but also a discipline problem. It’s the same discipline problem that people who can’t exercise have(i’m one of them)
It doesn’t matter how much you make, if you don’t discipline your spending habits, there will be no difference between you and someone with no income.
Financial ruin starts with indiscipline.
4. You need an extra paying job with your 9–5.
9–5ers hate to hear this. It was hard enough getting the 9–5 in the first place — getting a side hustle is harder. I understand this perspective, but earning from a side hustle doesn’t have to be hard.
Sometimes it can be an extension of what you already do at work. I have a friend who worked as a junior auditor at a consulting company, and she was doing well at the job. The pay was great, but not enough to meet both her needs and her wants.
She decided to outsource her skills in auditing to small businesses that needed an auditor to check their books. She created a personal brand around the services she offered, and this brought in good cash for her.
This is a “think-within-the-box situation.” You might not necessarily need to earn an extra income outside your area of work. Just make sure whatever you do, you have something coming in, because your salary alone cannot sustain you.
5. As important as bagging a graduate degree is, so is getting financial knowledge.
My introduction to financial literacy started because of an investment scam. I was scammed out of my school fees. That experience taught me the importance of gaining financial knowledge.
Financial literacy is not in the curriculum of most schools, and every year millions of students graduate with the mindset that they will be financially okay as long as they get a good job with a high salary.
Sadly, that’s not the case, because many people earn “high salaries” but have little to nothing to show for their paycheck. The work I do, as a personal finance educator, teaches people like you, that there is more to getting a job than getting paid a salary. You can make a lot of difference with money.
6. The financial choices you make now, will determine when you retire.
Everyone wants to retire in their 40s and 50s these days. The mindset is to work hard till 40, retire, and travel the world. Have you ever comprehended what it means to be a retiree? It means there is no more salary from a job.
The truth is, retirement is not a wish, it requires a lot of early-on planning. Whatever choices you make in your early twenties will determine when and how you will retire. I don’t think you want to retire and live off your pension/gratitude. When it finishes, what happens next?
You also don’t want to be living off your children's financial obligations. If you don’t make the right financial choices today, you might have to work till a very old age, and even then, you will be too old and exhausted to enjoy the travel or other luxuries of retirement.
If you want to retire at the age of 45, you must work hard and smart in building capital and investing so that you can afford whatever lifestyle you’re currently living in retirement. You also want to make sure your income flow is running until you say goodbye to this world. That’s the goal!
For every goal, build a system. What system are you currently building for retirement?
7. Love is sweet, but love is costly.
If there is anything I have learned from watching my parents and other couples, it is that on the other side of romance, there are staggering costs.
For those who aren’t already married, start preparing for your wedding and marriage. Because it will cost you a lot. You might be someone who likes small weddings due to costs, but as long as inflation rises, it doesn’t matter how on budget your wedding is; it will still be expensive. And a lot more expensive when you’re foot into the marriage.
All of a sudden, you’re responsible for catering for a home — spending 5x what you did as a bachelor/spinster and all these costs are on the same income/salary. Let’s not forget the ever rising cost of things in the market.
Sounds exhausting right? That’s why days like this are for preparation. Start saving and building capital for the days ahead, because they are coming.
8. Your lifestyle isn’t a measure of wealth; your assets are.
Many young people are building wealth all wrong. They believe being wealthy means “driving the latest model car," “living in a popular neighbourhood," or “wearing the most expensive clothing and accessories.”
What is flawed about this mindset is that it takes more money from an individual than it adds to their bank account. Because driving the latest model car means the most expensive car repairs, living in a popular neighbourhood means a higher cost of rent and other service charges, etc.
I’m not saying there is anthing wrong with these things, but if you ask me, I would rather spend money on assets that produces income. And then my income producing assets can acquire me these luxuries.
Owning assets requires spending less on your lifestyle outlook and more on investing, e.g. investing in financial instruments, rental properties, businesses, etc.
If you want to show off wealth, invest more in assets.
And if you ask me, showing off your earnings makes you susceptible to premium billings.
9. You can’t be wealthy beyond your mindset.
Speaking about mindset, there is a limit to how wealthy you will be with the wrong mindset. If I tell you- “I will give you $10 million” what’s the first thing that crosses your minds?
If your first thought was an expense or luxury, you have a lack mindset Whether you consciously know this or not, this mindset would determine how make and spend money.
Best advice: You cannot truly build wealth until you;
- First: Find out what kind of mindset you have towards money (your salary, allowance and other earnings)
- Next: Intentionally change your mindsets by changing your habits towards money.
Best resource: Read Atomic Habits by James Clear
10. Take action!
I have written a lot about money to spur you to take deliberate action. Don’t just read and clap. Intentionally pen the advice relevant to you and work-out a plan to change your financial experience.
I honestly hope to get a positive response in a not too distant future about how this article change your life.
Since you enjoyed reading this, you will love this:
I went by the field of the lazy man, And by the vineyard of the man lacking understanding and common sense;
And, behold, it was all overgrown with thorns, And nettles were covering its surface,And its stone wall was broken down.
When I saw, I considered it well; I looked and received instruction.
Yet a little sleep, a little slumber, A little folding of the hands to rest [and daydream], Then your poverty will come as a robber, And your want like an armed man.
Prov 24:30–34 [AMP]
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