Small vs big (Pt 4)

Chapter 4

Many times, people are so over concerned about going to school, making a good result and securing a good job. Even atimes, we despise the uneducated in our society. The idea of making good grades doesn’t secure your future in anyway. The idea of securing your future dwells with people with great ideas. Ideas that can be changed to wealth. Nowadays, companies do not just employ an individual because of his good grades but because of the ideas such individual has to maneovre the company to success. Most people have just a way of making money which is via their jobs. They cherish such jobs because they feel it is a product of their hardwork but what is hardwork?
Hardwork is not really what people think it is i.e. putting your whole time, body and mind to the job you are doing (Dedication to work). Father it is working smartly. Earned income is a form of linear income which comes after each job done. Other forms of incomes are needed to be a wealthy person. Many people do not know this because they are too addicted to what they are being taught at school. Like I said before these skills cannot be taught but can only be learned. The basics in academics is that people find what they’ve been taught to look for. Most students leave school when they are not mature for the society. Maturity not in terms of age but in terms of mental maturity. You’ve got to use your intellectual know – how to get more ways of making money.
Note: I’m not referring to illegal tactics. The other form of money gotten outside what you earn is called residual income. Money is a great worker, once you put it to work, it puts extra cash in your pocket without you having to raise a finger.
Stocks are likely to be the best investment, you’ll ever make outside Real estates. You don’t have to feed pay to maintain stocks because it does not leak like the roofs of houses etc. Buying a stove entails owning a part of the company which is issuing the stock.
Investment is the general term used to describe making money outside your income.
Wealth suit having move money but enjoying more money living a life of complete slavery to the course of wealth generation is complete poverty. Buying stocks is generally a very risky business. When people consistently lose money in stocks, the fault most often than not is always on the part of the investors. They simply do not have a plan. These are people who buy at very high prices, run out of patience and sell at relatively low prices during one of those periods when the values of stocks go down. To invest, you need a plan and most importantly in stocks. You’ve got to play the people and institutions who play in the stock market and not the stock market in order to succeed in stocks. Some people who make up the stock market are motivated by the short term results of a company. People are often pushed to buy stocks because of the headline reports, such people are described as “momentum investors”. The short-term mentality of the stock market sometimes raises or lowers the values of some companies. Others are those who trade in the market. This means buying stocks when the market is on the rise and disposing of them when the market gets sour. The stocks selected are always among those that have behaved above market average. Here a very few persons are involved in this with a vast majority of them being the unskilled investor (in investor that is always very scared of losses in the market). They sell the stocks when their values increase and later buy-back them stock when their value reduces. Majority of the time, stocks they sell do not really belong to them but are borrowed via the activities of the stock exchange. Before we continue, let us define certain terms in association with stocks.

Shares

A share confers on you part ownership of a company offered for sale to the public. Some companies do not trade their shares and as such are regarded as private companies. While firms that do are regarded as public companies.

Ordinary Stockholders

These are always the last people to be paid after the creditors have been paid.

Preferential Shareholders

These are the first class of shareholders to be paid and their income is fixed.

In investing, you don’t have to be a math genius to be a successful investor in stocks, all you need is a plan. Time is the second most important factor in investments in stocks after you’ve got a plan. Your parents may know more about stocks than you do but they’ve not got the time you’ve got. A small money invested today is worth more in the long run than a huge amount invested later.

Twenty years or more is the right duration for stocks to rebound from the worst market depressions and file up profits for you. Stick with your stocks, ignore the side talks. The secret to being wealthy in shares is buying stocks in good company which have an excellent record of past growth which may be predicted likely to continue on the future or choose companies which have not shown impressive results yet but has a positive forecast. Such are always consumer products companies. Before you embark on investing in any company, make sure you carryout an in depth study of the company before making such purchases. Many people follow experts that make forecast at the stock exchange or their financial advisors which is very wrong. By studying the reactions of people towards certain commodities (market trends), you develop knowledge of the market for such commodities and you can make your own forecasts. Familiarity breeds complacency. The more familiar a stock is to us, the less we carryout proper analysis of the stock.

Nobody can predict exactly when a bear market will arrive and when one does eventually arrives, the prices of most stocks drop in unison, many investors get scared and they worry that their investments may eventually be wiped out. They try to salvage their stocks by putting them up for sale even at magnificent losses. They show a great deal of cowardice letting their emotions take a better part of them without reconsidering what they are doing lose a great deal of money voluntarily. These are the so called market timers, who’d sell stocks because the market is up or down. Nobody can outsmart the market.

To get the best out of stocks, especially for we that are very young and have time on our sides is to invest money you can afford to forget about forever. Leave them in the market through booms and depressious. What the so called “market timers” do not know is that in retaining such shares, you’ll never make a loss.

One very tough decision to some people is picking their own stocks. So for these people, its better leaving the job in the hands of the experts. The only task such people perform is just the funding of such investment. Your money is put together with a lot of other peoples money whom you may not know and is invested by the experts on your behalf. Such is applicable to insurance and the pension scheme. As soon as you sign in with a fund, you instantly become a shareholder in all the companies the fond buys, no matter the amount you invest. A major advantage of investing in mutual fond companies is that it less risky than owning stocks in just one company.

Mutual funds originated from the Netherlands by King William I of the eventually, the idea has spread to over sixty countries.

The best experts cannot redeem you during bull markets.

Picking you own stocks could be fun so far as you have the discipline. It is much more load than investing in mutual funds, where you leave the experts to invest on your behalf. Here; you pick your own stocks and you fund such stocks. Some people invest in mutual funds and at the same time, pick their own stocks. Some mutual funds provide the benefits of having some one else manage your investments, keep your account records and diversify your investments over many securities that may not be available or affordable to you otherwise. One major advantage of the fund is enjoying economics of scale. Dealing cost is lower than for those trading individual shares themselves. Because of the dynamics of financial markets you do not need to worry about the timing of adjustments to your portfolio.

Secondly, you are exposed to a wide range of investments and so you are not vulnerable to the risks of holding a handful of individual shares. It encourages diversification which is a good investment strategy. Diversification of your stocks investment across a wide range of companies reduces the risk of the failure of one company or sector.

Mutual funds are affordable. They accommodate investors who do not have a lot of money to invest by setting relatively low Naira amounts for initial purchases subsequent purchases or both. Mutual funds provide liquidity, investors can readily redeem their shares at any time.

The first mutual fund was registered by the securities and exchange commission (SEC) in 1991. now with about 20 registered funds, investors have since invested about N20billion. Although this does not stand a per with the $6million invested in mutual funds in America.

Now let’s look at why mutual funds are not thriving in Nigeria as compared to developed markets. They face a lot of challenges in the market which they operate. Firstly, a vast majority of Nigerians are low income earners. Their income is barely enough to cover all their primary needs let alone to be invested. In addition, the high level of illiteracy in the country effectively cuts out a substantial part of the population who otherwise may have invested in mutual funds if they had the level of literacy required to be informed on such issued.

A lot of work needs to be put into the education of the public (public awareness) on mutual funds, how they operate and the benefits of investing in them. Given the fact that the Nigerian financial market is essentially still at the developing there are very scarce options made available to the investor and are not as diversed and varied as is obvious in other countries. What makes a good investment is absolutely subjective and depends on the rationale of the investment, that is the plan of the investor whether long term or short term in terms of the period of investment and also whether the intention of such investor towards the fund is for capital appreciation, provide a steady income stream or a hybrid of these factors. Moat importantly is that maximum value is gotten from investment while simultaneously ensuring minimal risks. You can buy mutual funds directly from the companies that manage them. You can also go through a broke, but be sure to investigate the fund properly long-term investors should ignore all bond funds and those funds that invest in a combination of stocks and bonds. Go through past records of funds before investing in any of them. Also look at the managerial team, and ensure that the fund you invest in has the right managerial team to give you what you want. Some of the funds that have solid past records do not still have the managerial team that took it to that height. Invest in funds that have sailed through the good and bad time.

Now another difficult problem is what types of funds to choose from. Because mutual funds have specific investment objectives such as growth of capital, safety of principal, income and hedging of against depreciation in Naira, you can select one fund or any number of different funds to help you meet your specific goals. Mutual funds fall into the following groups:

- Equity funds: These funds invest in shares of common stocks.
- International funds: Seek resources to invest outside Nigeria. These funds provide investors ample opportunities to avoid putting all their eggs in one basket. Some investors are unfamiliar with foreign investment policies and currencies and may not have a dear understanding of how economic or political events affect foreign securities. An investor in international fund doesn’t have to worry about trading practices, record keeping time zones or the laws and customs of foreign countries because the fund handles all of them.
- Fixed income funds: Are funds that invest primarily in corporate or government bonds and stocks that have a fixed rate of return. Their objective is to provide a high current income consistent with the preservation of capital. Capital growth is of secondary importance. This type of funds are suitable investors who want to maximize income and who can assume a degree of capital risk in order to achieve this.
- Money market funds: Provide stability of capital while seeking a moderate to high current income. Their investment is very liquid, short-term debt securities and have no potential for capital appreciation. Such funds are suitable for investors who want high stability of principal and moderate current income with immediate liquidity (easily redeemable).
- Sector funds: Invest in securities of a specific sector of the economy such as oil and gas, banking etc. they do not offer the sort of risk protection found in funds that invest in a broad range of industries. Although, there is always diversification among several companies via within their sector of operation which is still better than investing in just one company. Sector funds offers, sharp capital gains in cases where the funds sector is in favour but also offers the risk of capital losses when such sectors are out of favour.
Before you go into mutual funding you’ve got to have a plan. Here is a list to guide you.
- Instead of starting your evaluation of a fund with its performance, think about your investment goals-whether you are looking for a current income or an investment for a short-term, then a bond is good for you. If you have a longer-term goal, you might consider an equity fund. If you want appreciation of capital, you need a fond that; invests most, if not all of its assets in stocks. Stock prices fluctuate everyday, so funds that invest in stocks will also fluctuate in value daily.
If what you want is a stream of income, you’ll need funds that invests in debt securities such as bonds. Like stocks, bonds experience fluctuating share prices, although of a lesser degree. If you want to preserve your capital, you will need a money market fund, which maintains a stable share price while providing some income. In return for this stability you have to make do with less income than if you invested, in a bond fund. To seek a bit more income, without sacrificing too much stability of principal, you could choose a short term bond fond. This experiences modest price fluctuations but with higher yields than money market funds.
- Ensure that you are satisfied with the level of management and you are okay with business strategy of the company. Make sure that the company frankly discusses the potential limitations if not you’re getting into a very deep mess. Ensure that the company sticks to what is outlined in its prospectus if not you may be going contrary to your plans. The cost is another major point of concern, there are some funds who marge a lot before you can become a shareholder and this may not be good. Follow the managers records and be sure the company suits your plan.
- Be acquainted with the various prices of funds you wish to invest in every fund has and expense ratio money deducted from its earnings and assets to pay annual operating expenses. The lower the expense ratio, the more the returns the shareholders are certainly going to receive from such funds. Go for funds with high turnover ratios.
- Once you have chosen a fund type, the next step is to evaluate the funds in such category. Read the company’s prospectus carefully. To find out how well a funds performance as been, you have to compare it to its rival funds in the fund type you have chosen.
The bench mark index is also very important, compare the fund to the NSE index to be certain of its creditability.
- Are your interests protected? Excessive trading by just a few of a fund’s shareholders can disrupt operations and boost expenses that all shareholders have to absorb. If you’re a long-term investor, look for policies that protect your interests. Some fund companies limit the number of transactions investors can make within a given period. Some funds hold down trading shares before they’ve been held for a specified period of time. This type of fee which may range between 0.25% to 2% is not a sale fee, because it is paid directly to the fund and not the fund company to offset the costs incurred by the redemption activity. Check the record keeping services of the companies. Some people take record keeping unseriously until they buy funds from bad fund companies. Fund companies offer statements of accounts, and other services that make record keeping convenient for fund holders. Example; before you invest in a taxable account, make sure the fund keeps track of the cost basis of your shares over time. If not, you’ll have a problem keeping records when you decide to redeem your shares.
To know if your funds are doing well, at the end of each financials day, the fund manager calculates the value of the various holdings of the fund. The liabilities of the fund are then deducted from this value. The result of this is called the Net asset value (NAV). Dividing this value by the number of shares in the fund amounts to the Net Asset Value per share which is the price of a single share for that day.
If the company is doing a good job, the NAV per share increases in value and if conversely, if the company has a poor managerial team, the NAV per share reduces in value per day. In the fund investment, you can earn money via.
- Dividend payment: This includes the dividends and interest on the securities the company invests in. the fund pays its share holders nearly all the income except some minor expenses that would be made mention to the shareholders.
- Capital gains distribution: The price of the securities a fund owns may increase. When such securities are sold, the fund makes a capital gain. At the end of the year, most funds distribute such capital gains to investors.
- Increased Net Asset Value (NAV): If the market value of a fund’s portfolio increases, after deductions of expenses and liabilities, then the NAV of the fund and its shares increases. The higher NAV reflects the higher value of investment.
When you invest in a fund, and the expected result is not made manifested, there is no need holding on to such funds. Let us look at good reasons why you should dump a fund.
- Your fund is a persistent loser: The mere fact that a fund has how returns or even losses shouldn’t prompt you to sell. If there is a bear market, you cannot expect your fund manager to turn to Christ. But if this happens for two to three years, by a substantial margin, start thinking of another fund.
- The fund’s investment strategy has changed: If you want a diversified portfolio, then you’ll probably pick up equity funds. Supposing the equity fund managers strays from their area of concern, they’ve not only strayed, but they are leading you astray from your plans. There is no need having a second thought here unless you are willing to also change your plan.
- Change in managerial team of there’s a new manager for the fudn, he may not abide by the same rules, his predecessor abode by. Ensure that he does not down turn your funds to make losses otherwise you quickly pack from such funds.
- The fund managers are not straight forward: Some of the professional fund managers are often not knowledgeable in fund handling and as such make sure you are satisfied with the managers in charge at present.

Small vs big (Pt 3)

Chapter 3

The earlier you start, the better your chances of financial freedom.

Investing a few naira a day could make you a wealthy man. With such simplicity, one would wonder why some people are wealthy while others are road side that such beggars. Te simplest reason is that such people lack the knowledge as observable in George S. Clason’s richest man in Babylon”. Those that have the knowledge lack the discipline to adhere to its simple biddings. Some of us are so used to procrastinating events that we do not realize we procrastinate our chances of stepping above our present level procrastination is very expensive, it costs a fortune because by each ticking of the clock, your supposed fortunes ticks away from you. It requires a great deal of consistency to achieve wealth. Whenever you handle a naira, do not consider it a mere paper but a great soldier that has the power to bring a large fortune to you that’ll be benefiting not just to you but to future generations. The only condition required is that you start now. Never procrastinate. You’ve got to value money as though it were a precious jewel. Teach your children to value money lest when you’re gone, your wealth goes with you. There’s nothing more cherished by you than what is achieved via your hardwork. Imagine sketching a portrait of yourself, you cherish it more than a portrait you pay others to do for you even if it has no resemblance to you so also should you hold money dear to you. Gain control of your money by setting a system for organizing your financial life. There are ways of staying rich, which are earning more or spending less your budget reveal tiny leakages that allow money out easily. Let’s imagine an ideal budget. The first leak is called giving which includes your contributions to religious purposes, charity and others. You pay yourself the rent ten percent of your money. The third category is a category for taxes. All levies that have been paid must be included in this category. Category four comprises of all forms of payment for your property. The fifth should include all household expenditures from food to clothing, this takes the largest chunk of your income. Then the sixth category should include expenses of all forms of transportation boarded. It also includes the sum expended in the repairs of your vehicle. The next category is for all expenses away from home such as fastfood as is obvious with we Nigerians. Then comes category 8 for all forms of insurance. Then category 9 should cover all debts of any and finally category ten should take care of business expenditures. Analyse yourself carefully, how many times a day do you spend money? Only a few times yet those few decisions can make all the difference between poverty and wealth. The idea of budgeting and planning our finances to most of us is too tiresome. The olds for practicing this is that you are going to live well past retirement age, and the decision rests on your shoulders today. Have you ever come across a five naira note on the floor, I’m sure you pretended you didn’t see it. How may of you would see a Ghana-must-go bag with five naira notes and just walk past it? Just the hidden truth is that beneath every five naira note with bundles billions of naira. What we always want is to fast cash. We always want much money which we cannot handle.
Note: Wealth does not satisfy desires but changes your desires, so your ability to control your desires is a boost to easy wealth. I hear some people delegate everything concerning them to other people to handle but it should come to your notice that you can never assign this to any other person but yourself. Here you are responsible for yourself. Financial accountability always seems too tedious to some of us yet they must be a part of you to succeed. In order to be wealthy, you must have a great deal of discipline.

Small vs Big (Pt 2)

Chapter Two

Basically, a school is very important in the grooming and development of a complete individual. By school, I mean an association of individuals that are brought together because on one motive which is to be taught or to learn from each other. But a school cannot make one wealthy because like I wrote in the proceeding chapter, wealth creation cannot be taught. Most of the world’s best entrepreneurs are academic drop outs or academic failures. Richard Branson the Chairman of virgin group of companies for instance did not have a complete formal education because he realized that what he got from school did not conform to his ambitious.

The most intriguing part is that he started his career right from high school. Even though his first blow wasn’t very successful, he never gave up and this paid up for him as today he is the worlds largest brand maker.
A school is a place for development of talents, acquisition of skills etc. Today the school does not carry out some primary function as mentioned above but rather has gone astray. This is the reason why many Nigerian graduates are not qualified for jobs in their chosen profession. In the Nigerian society today, people without a complete formal education are all but qualified for skilled jobs. Their pay is very low, and atimes are victims of discrimination in their places of work. Also in Nigeria, the university is the only safe Haven towards solving a good job. Some positions are left vacant for only federal university graduates. Therefore with this forms of discrimination how then can someone be wealthy? Let us look at the following ways of tackling our finances in a society like ours.




- Never spend much money on liabilities; Liabilities are expenses incurred that do not contribute to the accumulation of wealth but inhibits wealth spend money on assets. On the contrary to liabilities assets are expenses incurred for the generation of further wealth. “Good investment” is a perfect example of assets.
- Avoid self-limitation. Limiting yourself mentally, reduces your productive capability. You should never tell yourself I cannot; always try to forget ahead knowing that ‘you can never be too rich no matter where you are. Task yourself mentally by asking yourself what the prospects are to achieve your set goal. Some people call themselves failures unprivileged etc because they’ve tried once or twice without success. Such names reduce you both mentally and morally they make you give up. Thomas Edison the invent our of the incandescent lamp tried nine hundred and ninety nine times without success but he was never a failure because he never gave up. Remember no one is a failure until you give up.
- Let us consider the Richest man in Babylon by George S. Clason. This is a book I never get tired of reading.

“Babylon as at the time was the richest kingdom in the world. Although a very rich nation its citizens were sinking in the seas of poverty. The king became worried and wondered why so few of the people acquired the gold. The chancellor investigated and brought back his observations that only a few of the people had the knowledge of safekeeping part of the gold they received. For others to be taught how to keep a part of the gold. Arkard, then the richest man in Babylon was called upon to handle the job and he titled his lecture “the seven cures for a lean purse”.
They are

1. Start fattening your purse. The very first he prescribed was for every ten coins earned, a tenth of it should be kept.
2. Control your expenses. To do this, you do not confuse your “needs” with your “wants or desires”. Everybody is with more wants than he can actually backup with money. A budget must be made for the necessary expenses. The budget reveals the crevasses and holes in your purse and enables you to seal them.
3. Multiply your wealth. When you have been able to control your expenses, your wealth should multiply. A man’s wealth is not the amount of money he carries about but the golden scream that continually flows into his purse. Put each coin to labouring that it may reproduce its kind and multiply your wealth, a source of continous wealth. Relating this point to today’s world, though gold is no longer in use, we still have expenses to handle. By trading part of your earned income properly, you should multiply your wealth.
4. Guard your treasures from loss. Learn to invest your income only where it is safe where your money could be recollected when desired with fair interest. Seek relevant information from very reliable sources study carefully before entrusting your money into any investment, make acquaintance with the risks involved. Here is how his first investment went.
- “My own investment was a tragedy to me at the time. I entrusted the guarded savings of a year to a brick maker named Azmur, who was traveling over the far seas to tyre and agreed to buy for me the rare jewels of the Phoenicians. These we would sell upon his return and divide the profits. As it happened, the Phoenicians were scoundrels and sold him bits of glass. My treasure was lost. Today, my training would show to me at once the folly of entrusting a bricklayer to buy jewels.
5. Make your home a profitable investment. Money lenders gladly consider the desires of men who seek homes and bind for their families. Readily, may you borrow to pay the bricklayer and builders for such commendable purposes if you can show a reasonable portion of the necessary sum which you had provided for the purpose.
After completion of the house, you can pay the money lenders with the same regularity as you were paying the Landlord. This is because each payment reduces your indebtedness to the borrower and will reduce your cost of living, making available more of your earnings for pleasure and gratification of your desires.
6. Insure a future Income. The man who because of his understanding of the laws of wealth acquires growing surplus should give thoughts to those future days. He should plan certain investments or provisions that’ll endure safely for many years, yet will be available when the time arrives which he has so wisely anticipated. There are so many ways a man may provide for his future. Summarily, his sixth lecture was on investment. By so doing, you accumulate wealth for yourself and to keep you going at a time you are unable to keep your job going.
7. Increase your ability to earn. He said “a young man came to me complaining that his income from his job was not enough to pay his expenses. There upon I told him that this being the case, he was a poor customer for the money lender, as he possessed no surplus earning capacity to repay the loan. The man told me that he had been going to his employer six times weekly to seen an increase in his wage but it has always been to no avail. According to Arkard the man possessed what was required to earn more, a proper and commendable desire. Desire must precede accomplishment. The secret of people whom today serve as our idols role models etc is their determination before anything can be accomplished. The man lacked a basic principle towards earning more which is determination. There are many channels via which an individual can earn more even without a raise in wage. He lacked knowledge. The seventh and last remedy concerns cultivating your own powers; to study and become wiser; to become more skillful; to be more determined; act big, think big and talk big. Always carryout the affairs of man change and improve because keen minded people seek grater skills that would enable them to better serve those upon whose patronage they depend. The more of wisdom we know, the more we earn. The man who seeks to learn more of his craft shall be richly rewarded. Desire should be backed up with determination. These desires must be simple and definite. They defeat their own purpose should they be too many too confusing or beyond a man’s training to accomplish.
Atimes when people are introduced to investment, they marvel and wonder where they are to get money for investment purposes. Unless you take total control of your expenses, the debt burden on you could lead you to an early demise. It is a well known fact that what an individual earns is not a major determinant of his wealth. The reason being that the money has conflicting needs. Our society is constantly changing so also our desires and needs. Certain people prefer sinking in the sea of illusions rather than have the freedom of real wealth. They choose lifestyle rather than riches. Many bosses are the ones that are caught by this problem. They always spend so much money on rather liabilities than assets. They feel investment is waste of good money. They are tied to just what they earn. Some of them rather think that very huge sums of money are required for investments without knowing that you have to start gradually and invest in good ventures. The money keeps increasing and multiplying itself. Some people blame their incapability to the fact that they are from very poor families. Research has shown that people from poor families are more hardworking than their rich counterparts. The fact is that we are on an endless treadmill where we work, generate income, expend our incomes and continue working. Robert Kiyosaki calls it the “rat rice”. It is a race where very hardworking people who choose to toil for their money and not embezzle end up with nothing to show for their labour because the income is already expended before it is received. Riches increase rather than satisfy desires. Wealth creation entails proper financial management. It is difficult for people to practice this because they consider it too risky. Remember there’s a risk in crossing the road and there’s a risk in not crossing the road. Every bit of money we get our hands on gives us the power to choose our future whether to be rich or poor. This money is a little soldier on our battlefield or wealth. Liabilities kills the soldier while assets empowers the soldier to produce more soldiers of its kind to continue battling for your financial security.

The basics towards wealth creation is paying yourself first. Something of note is that your are part of the reason other people get wealthy. Each liability bought empowers another man’s soldier to multiply. Financial intelligence according to Robert J. Kiyosaki is made up of the ability to read numbers, the science of making money from nothing, understanding market trends and the awareness of the laws and regulations governing investing. A combination os all these elements is needed to become successful in wealth creation.

Financial intelligence is necessary for the making of a good investor. Becoming a good and knowledgeable investor comes by experience most times. The media today has made very inexpensive convenient ways of educating you about financial markets.

Big Vs Small

Many times, people feel they are too young or too old to carry out a decision with regards to their finances. Every body has to make certain decisions concerning their finances even if you have the most intelligent financial advisor, accountant etc. The level of poverty in some third world economics are on the increase such is observable in Nigeria.

Often times on the streets you find out those beggars cling from one vehicle to another causing traffic jams and sometimes they are subjected to hazards such as accidents which may eventually lead to their death. When I see such, I wonder if this was the case in eras when every man produced food just enough for himself and his family. Other times, I wonder if they’ve got no knowledge on who to create wealth for themselves. These are people that the rich use to serve their igneous desires. However there are people with well paid jobs that albeit their income, cannot be distinguished from roadside beggars. This is due to that fact that the revenue generated from their jobs runs after so much expense and hence are inactive placing a lot of debt burden on such individuals.

My research has revealed that the major cause of so much poverty is because people lack the wisdom on how best to manage their finances. The Bible itself says “My people die for lack of wisdom”. People attribute their poverty stricken state to all but themselves. They never one day accuse themselves of being responsible for their misfortune.

Once I read a paper with an article about a boy who killed his mother because he claims that the holy spirit had directed him to do so because his mother was an idol worshipper hence retarding the blessing of God in his life. You find out that knowledge is the key to wealth creation. Many other times, people feel that the only way to create wealth is by doing it illegally such as by joining secret societies, practicing rituals, stealing etc.

Many others think that school is the key to wealth creation and hence attend schools cheat and get promoted from one level to another without even getting the basics of what they went to school to achieve knowledge is strength because forewarned is fore rearmed. You know there’s a difference between knowledge and wisdom, knowledge could be passed from one person to another but wisdom cannot. The greatest wealth we are endowed with is our mind. The way we position our mind determines the amount of wealth or debt we accumulate for ourselves.

Wealth is that par of an income that is reserved. It is the net worth of an individual. In our society today, the rich get richer, the poor keep on wallowing in the sea of poverty. The funniest thing is that the people in the society that have very little or no wealth are the ones that make lots of noise.

Once, I was in a class and a question was asked thus “When is an individual said to be rich”. A lot of people agreed that a person is rich if he can fame his expenses so that it is lower than his total income. Then a young boy that was sitting behind stood and said that he considers a parson rich if he has a plan that can keep him going irrespective of future events such as dismissal. A lot of us just look at the present without even a hope for the future. That little boy had responded maturely even more than his elders that were there present. He had set his mind beyond the present, beyond a time when things looked smooth to a time when the road stants being rough. His response boils down to the questions thus in most of us, “what if…” “what of…”, “can you…” etc.

Certainly, the positioning of your mind affects your finances. Everybody is exceptionally talented in life, the key is the mental approach. Success is 90% of the mind, the way you manage it determines how best you succeed.

Let us look at the following extracts of quotes related to success complied by Harry Millner.

- Success has ruined many person.
- Success which costs too much most be considered failure.
- Success makes a fool seem wise.
- Success has many friends.
- Success often depends on negative rather than positive qualities.
- Success is on way of annoying your friends.
- Success is being able to spend your life your own way.
- Success is the best revenge.
- Success may blind us to injustices.
- The hard thing about success is having to keep it up.
- There are successful men but no great ones.
- There is something about success which is displeasing.
- The reward for success is success.
- The first blow is half the battle.
- If at first you don’t succeed that makes you average.
- You must know failure before you know success.
- To be successful, act big, think big, talk big.
- Success is 5% inspiration and 95% of what you know.

Now to be wealthy, you have to act as a wealthy person, think as a wealthy person, talk as a wealthy person. The reward for wealthy is more wealth. A major step towards being wealthy is the first step you take. Wealth creation cannot be taught but can be learned. It is learned through a series of conceptual study and practice. Many times I hear people say that errors are bad. True they are bad but we learn more from our faults than our virtues. If you do not learn from your past you will certainly repeat it. You see failing enables you to succeed because you easily learn from your failures than your successes.

Creation of wealth is carried out through a careful and systematic plan. Many so called professionals are indeed slaves to money in that they foil and sweat for little money. In this case a very large effort is geared towards generation of a very little income. Such income has little or no use because it certainly may not be enough to cover all expenses incurred, hence resulting in debts that are constantly being deferred. Such individuals atimes have two or more jobs in order to make ends meet. There are two category of people (i.e. in the way they handle money this minimizers and maximixers.

The minimizers are those whose income surpasses their expenses. They achieve this via two means either by making more money or by spending less.

The other category are the maximizers that squander all and sometimes above their income. They are always in debt and most susceptible to mental problems. The minimizers do not really avoid expenses but rather they buy assets rather than liabilities. Such assets include stocks, real estates, precious metals etc.