Financial success is more about mastering the mental game of money than about being math savvy. The reason is that the money game is not played on a calculator or in an Excel sheet; the real battle field is inside your head, that thing between our ears that controls all our money habits. If this were college subjects, money is more Psychology than Mathematics.
Unfortunately, the game is not an easy one, and a lot of us, dive into real lives not knowing a principle or two about what makes money click. They’re not taught in school at all, and only a few money-conscious families talk about them at home. The lucky ones get the valuable lessons early on from their parents, while others discover the lessons themselves. For the rest of us, we continue to learn from them. Today we tackle
Some of the money principles that we need to live by if we want to prosper
Money makes you more of who you already are
A lot of us Filipinos still hold the assumption that money changes people for the worse. They believe money can only make them evil, corrupt, and heartless. There are real-life examples, of course, of wealthy who are corrupt. But there are also real-life examples of men and women, who have multiplied their goodness when they became wealthy. Did money make them good or bad?
Money is only a magnifying lens that will make you more of who you already are. Look at Bill Gates and Mark Zuckerberg. If they were poor, would they be able to donate billions to organizations that support and feed the poor? If they had evil intentions in the first place, will they ever donate to these organizations? I doubt.
Don’t get stuck into thinking that money will earn you the wrath of God. You will only live in fear of money; hence, you will never attract money into your life. With money, you can do goodness in bigger proportions, if goodness is innately within you.
Your own mentality attracts or repels money
As the Greek philosopher Aristotle said: “As within, so without.” In other words, your outer world is a manifestation of your inner world. If your inner world, i.e., your mentality is that you will always be a poor man, then that’s exactly what you are going to get. If you believe that you are going to be rich, then your actions will always point you in that direction. In Millennial terms, life is WYSIWYG: What You See Is What You Get.
Money is only a means to a greater end
They say money can’t buy happiness. But who says you should buy happiness with money? Money is not an end itself. It is only a tool, a means to a greater end. It is not acquired just for the sake of having a lot of money. It is meant to be used for a greater purpose. And we’re not only talking about philanthropy here. We’re also talking about self-fulfillment and doing what you always love to do.
If you love building businesses from scratch, then you will find fulfillment with it. And an indirect effect of building businesses is that you will be able to help people improve their lives by employing them in your business.
Time is money’s best friend
If we want to grow our money, then we need to save as early as we can. Don’t waste time finding the perfect moment or income to be able to save money. Believe me, you will find ways to spend money faster than you will find reason to save.
Time compounds money as much as it does compound interest on your debts. How much more if you save consistently, and invest in the right financial instrument? Sad to say, only few people believe this principle and those who have are probably getting richer every year, or already retiring early.
You can’t save your way to wealth
Saving is already an outdated money principle. The rules of money have changed. Putting money in a savings account earns you a meager 0.25% annual interest rate. If you think you can grow your money with that, it might help if we pop the bubble by saying that the growth of your money can’t keep up with inflation rate. Inflation causes the prices of goods and services to increase, thereby devaluing your money.
Instead of putting money in a savings account, just keep enough emergency savings and put the rest in a financial vehicle that yields 8% a year or more. We’re talking about 401(k), IRA, or going DIY with equity investments.
You can work for money but you can also make money work for you
Working for money is what most of us are doing. We need to put food on the table, send kids to school and pay utilities, mortgages and loans. If we stop working, the money stops as well. Stopping is not an option, or else, we will live like animals on the streets. To many of us, it seems that this is the only option available which makes it pretty OK for us to work until our bones are brittle enough for retirement.
That’s not true at all. You can also do it the other way and make money work for you. Think of every dollar that you have as a worker who can help you grow financially. In fact, they are always ready to serve you. Save and invest them in assets such as equities, rental properties and other businesses, and you will surely see what we mean. If you can make money work for you, someday you will have to stop working for money and start working for a greater purpose.
Nobody cares more about your own money than you do
We can sit here and discuss all day about money principles but that is all that we can do. At the end of the day, it’s only you who can help yourself because nobody actually cares about your own money than you do.
If you see that your money is not growing fast enough, your bank will not tell you to move it to another investment. After all, they are earning from the money you put in the bank. If you’re taking out a home loan at a high interest rate, your creditor might not tell you to go find another creditor who can offer lower rates. If you’re losing money because of interest rates on your debts, your bank will not tell you that. Your personal interests are not their own. The lesson here is to care for your own money, because nobody else will.