Nkpouto Pius
The book: The Smart Money Woman authored by Arese Ugwu discusses the problems that African women face in acquiring wealth and suggests methods for tackling them.
10 top tips from the book
1) A broke person is someone who if they lost their primary income they would not be able to sustain their lifestyle because they have no assets to rely on.
2) Broke and rich people approach the same amount of money differently. Broke people think it it is about how much you earn, while rich people know that is about how much of your income you are able to keep and convert into assets that can provide you with an income in the future.
3) Financial freedom occurs when passive income exceeds your expenses. Active income is the money you get paid for rending services, eg your salary from a job or business. Passive income is the money you make while you’re sleeping, such as money that comes from an investment you already made.
4) Learn to control your money instead of letting your money control you. Track your daily expenses.
5) Wealthy people use debt as a tool to leverage their investments and grow their cash flow, but poor people use debts to buy things that make rich people richer. Only borrow to acquire an asset that will appreciate in value.
6) A smart woman doesn’t wait for financial surprises. She systematically saves towards her emergency fund because she knows that this is the foundation of her financial journey. Before you splurge, make sure you have at least 6 to 9 months of living expenses saved up for emergencies.
7) Create a sustainable budget by dividing your income into 3 parts; long-term financial goals, short term financial goals, and living expenses.
– Long-term financial goals are a proportion of your income set aside to improving your networth, eg buying assets, and 20% of your income can be set out for this.
– Short-term financial goals are set aside for treats eg a Chanel bag, an iPhone, a luxury vacation.
– Living expenses are your monthly contribution to your rent, health insurance, satellite TV, service church etc.
8) Your network is your networth. A person’s ability to attract wealth is tightly linked to how well she is able to grow and leverage her network to take advantage of opportunities.
9) Conversations must be had about family finances. Couples should consider having discussions about money matters as part of pre-marital counselling.
10) If you hang out with four broke people, you will be the fifth. If you hang out with four business-minded people you will be the fifth. Terrible money habits can be formed by the people you choose to hang out with.
Pius is the reviewer
