CONVERSATION WITH MY BILLIONAIRE FRIEND
Many people will tell you that they have never had enough money in their lives. The issue is not having sufficient money; the issue is being able to live within your means. The way that God has structured it is that He ensures that everybody on earth has an opportunity to access a certain amount of resources/money that can take care of him to a particular level. But what most of us do is try to change that level on our own. People get into financial difficulty because they want to jump the process – Dayo Lawuyi, THISDAY LLS Mentor
There is precious treasure and oil in the house of the wise [who prepare for the future], but a short-sighted and foolish man swallows it up and wastes it – Proverbs 21:20
“Whether you realise it or not, you’re already an investor. Your money is having an impact somewhere, somehow. This is true even if all you have is a savings account. Every entity in which you save or invest your money uses your assets for some purpose. The question is whether this supports the things you value — or undermines them.” – Janine Firpo
This week, we continued with our conversation which centres on how to build wealth by modelling the positive habits of successful people. We shared five of such habits last week, and we shall share an additional five this week. Are you ready? Let’s go!
Dr Sam Adeyemi, the Senior Pastor of Daystar Christian Centre and President of Success Power Media, once shared with me how he came about paying attention to financial intelligence. It was when he first showed up in Lagos (it is a well-known story to many of his fans). He said that in one of his public engagements he was paid an honorarium, and a week after that, his wife had asked him casually to share with him what happened to the money. When he realised that the entire money was gone, he decided to turn around the simple question into an argument by posing a question back: “are you saying I don’t know what I am doing with the money”. Pastor Nike, his wife, did not argue. She just simply recast the question, asking that he share with him what happened to the money. Dr Adeyemi said he was perplexed that the entire money was gone. And sometime after that experience, he said he went for a seminar on financial management where the trainer, paraphrasing the Proverbs 21:20, said that if you spend everything you earn, your wisdom bank is blocked. He said the message hit him like a thunderbolt, and he left the class sober but with a determination to implement what the facilitator recommended: to open a savings and investment account. He said he opened one for himself and one for his church, and that, according to him, was a turnaround point that changed the way he looked at the money.
I had a near similar experience during an executive seminar recently in central Lagos that focused on real estate entrepreneurship but with a lot of tips on financial intelligence. We were 20 in the class, and we were all excited to be in the class. But there was something that threw some spanners into that excitement.
Here are the 11 questions the lead facilitator asked, and he instructed us to attempt them and share our experience in the class:
1) Do you operate on a budget and plan your finances into the near and/or far future? Yes/No (100)
2) Do you have more than one stream of income currently? Yes/No (150)
3) Do you have a pension Fund Account? If yes, what is the current value….(150)
4) Do you have an Emergency Fund (EF) equivalent to 1 month of your salary/earnings saved up? Yes/No (100)
5) Do you have a Setback Cushion Fund (SCF) equivalent of 6 months of your salary/earning saved up? Yes/No (50)
6) Are you going to earn any lump sum of money from your employer at retirement? If yes, how much and how much do you hope to be collecting at retirement? Yes/No (20)
7) Do you own your own home? If yes, what is the estimated current market value? Yes/No (150)
8) Do you own any piece of rental income generating property? If yes, what are the market rent and estimated current market value? Yes/No (150)
9) Do you own any other property at all? If yes, what is the current estimated value? Yes/No(150)
10) Do you own anything that can be converted to money or off of which you can make money passively at retirement? If yes, what is the amount of money you intend to make from it? How periodic? How long? What is the current value of the assets? Yes/No (100).
The trainer put at the end of the questions the interpretations of the scores that would indicate your current status; whether you are ready for financial freedom or you are in a red financial alert. By the time the facilitator asked for volunteers to share their scores, no one was willing to volunteer. The initial enthusiasm had evaporated, and as a matter of fact, only a few of the participants went for lunch. Everyone wanted to know the conclusion of the matter: how to fix their obvious deficiencies. By the way, that training is a powerful, eye-opening one and I strongly recommend that anyone following this series consider attending (I could share the link if you would like, just text “I AM INTERESTED” to 09067059433).
My Billionaire Friend had once told me that building wealth is serious business, and you must be willing to roll your sleeves and make things happen, including putting into immediate action some of the money-making tips he has shared with us.
Here are the next five habits of wealth builders that beginners should model as shared by my Billionaire Friend during our last discussion:
WEALTH BUILDERS DO NOT SPEND FLAMBOYANTLY TO IMPRESS
“Wealth builders must, as of habit, resist the temptation of spending ostentatiously. The focus of wealth builders must always be on savings and investments, at building their wealth. Frugality is generally the common trait and habit of wealthy people and those focused on building wealth. Incomes must go to build wealth, except for expenditures on life’s necessaries. There is a general tendency in Nigeria for people to party and generally waste money on consumptive expenditures, which accounts for why the percentage of savings and investments as part of Nigeria’s Gross National Income is considerably very low, given the size of Nigeria’s population. This is also confirmed by Nigeria’s large number of event centres, built for that purpose, as compared to the low and significantly poor number of factories. Yes, it is generally a natural tendency for man to be consumptive, but it is more reasonable for a man to prepare for the inevitabilities of the future, build wealth and engage in philanthropy”.
AS EMPLOYEES, YOU MUST PLAN FOR YOUR RETIREMENT THE VERY FIRST DAY YOU ARE EMPLOYED
“Employees must plan for their retirement from the very first day of their employment, not only to better prepare them for their future but also begin to build wealth for their own good, and the good of their families and society in general. I once observed a discussion between a 60-year-old and a 32-year-old man. The 32-year-old man asked the 60-year-old what he was going to do when he retired? And his answer was surprising that he had not thought about it. Of course, the 32-year-old man expressed shock as to how a 60-year-old man had not planned for his retirement. The 32-year-old man then went ahead to spill the various things he was already doing towards his retirement by the age of 55 (some 20+ years ahead). The 60-year-old man then asked the younger one why he planned to retire that early? The younger man then told him that retiring early is what those who plan their lives very well generally do. Employees should not wait to retire at 60. They should plan to retire early, from age 50 or at the very worst, by age 55. Of course, the only way this can be achieved is by planning their future from the very first day they commence paid employment. The example of the 60-year-old cited here ended up badly. He died at 69, with three of his children still schooling, without owning a house and leaving behind his widow and children with nothing to fall back on. The funds for his coffin and grave was provided by good samaritans. Employees must learn to see themselves as ageing every day and every year and growing feeble as they age, and usually unable to satisfactorily provide for their needs as ageing creeps in”.
WEALTH BUILDERS EDUCATE THEMSELVES BY READING VALUABLE BOOKS AND APPLYING THE INSIGHTS IN THOSE BOOKS
“In the last series, we gave examples of the books read by Aig Imoukhuede, Yemisi Shyllon, Warren Buffet and others, which ignited their wealth-building drive. To this end, I hereby recommend the book by Robert Kiyosaki, titled: “Rich Dad, Poor Dad” and ” Rich Dad’s Cashflow Quadrant”. In those great books, Kiyosaki discusses this issue very extensively. He came up with a four-quadrant illustration of the different classes of engagements for earning income by humans. The first quadrant discusses the employee stage of life, the second discusses self-employment, the third discusses business systems, and the fourth discusses investments planning. Those who have their eyes on investment at every stage of their life, whether self-employed or employees, should be operating in the fourth quadrant of investment in preparing well for their later lives. And in doing this, they must always, as of habit, avoid eating with all their fingers. Employees must always engage themselves in the fourth quadrant of investment. This is one sure way to avoid 70-year plus old persons from still working for their daily bread and survival. Whereas such elders should be living off the returns of their investments. This habit is what has guided the likes of Yemisi Shyllon, Aig Imoukhuede, Fola Adeola, etc.”
WEALTH BUILDERS WHO ARE SELF EMPLOYED ALSO SET EXIT TIMES FOR THEMSELVES
“Self-employed people should aim at disengaging early from being self-employed by the age of fifty-five because being self-employed could be very tasking and exhaustive. All the risks, benefits, burdens, decisions, operations, policies, etc., associated with self-employment are solely shouldered by the self-employed. Therefore, such self-employed must create the plan to move early away from their self-employment to build their firms into business systems. Business systems are defined, in the book, as those businesses owned by business owners who, on leaving and completely detaching themselves from their businesses for over one year, can return to find their businesses doing better than they left them. They are those who are regarded as having built successful business systems. And those who build business systems have their eyes on the ball of investments. Investment is the ultimate in money-earning, and wealth-building instruments should be the ultimate goal of every human. One must invest one’s time and not waste it, as earlier said. Every time is very important in a man’s life. Every mortal has a definite time of exit, it may be earlier than normal or later than normal, but one must be aware that the number of days a man can live on earth is not up to one thousand years, and the number of hours is finite. One must invest his time and conscious mind in preparing for future unknowns by positively using every available time. One must continuously educate one’s self because knowledge is very vital in the motion shaft for building wealth”.
YOU SHOULD LEARN BY OBSERVING THE WEALTH-BUILDING HABITS OF WEALTHY PEOPLE AND APPLY THE SAME
“In general, by observing wealthy people and those who build wealth, one tends to understand how to build wealth. This is the first step to building wealth; from nothing. One has to understand how to build wealth, orient oneself with an understanding of the rules of finance and investment and build wealth over time by regularly tracking one’s wealth”.
“One must always check his bank balances to discover undue and unlawful deductions. Wealth builders are always prudent, and they always audit their incomes and expenditures regularly to look out for frivolous claims against their wealth”.
“Wasteful expenditure must be avoided at all times. This is a very important habit with wealthy people. They discipline their spending. You will find, for instance, Aliko Dangote does not share his wealth, Mark Zuckerberg came to Lagos wearing a T-shirt, Bill Gates wearing ordinary clothes. Whereas ignorant ego-infested people go around town showcasing their gold and diamond possessions. Such wealth displaying behaviour and ostentatious lifestyles are not part of the discipline and habit of wealthy people and wealth builders”.
“Wise and wealthy people are conscious of the importance and value of money and do not spend frivolously. Savings must be automated by ensuring that the first thing a wealth builder does, is to deduct savings for continuous investments. They invest in principal guaranteed investments in high-risk investment environments. They minimise their risk exposures at the beginning of their wealth-building life gradually but eventually begin to take calculated risks. They share their wealth with their family, friends and community, and they also share the fruit of their knowledge in building wealth with people”.
Let us stop here. With this, we have concluded the first phase of the 6-part dimensions of wealth-building series we started eight weeks ago. In the first part were able to lay the necessary foundation on which to build the remaining five dimensions of wealth building. Next week, we shall be moving to the second stage.
Tighten your belt! We are eager to catch up with you next week.
There is precious treasure and oil in the house of the wise [who prepare for the future], but a short…
The article for the week. Can you plan it right away?
Many people will tell you that they have never had enough money in their lives. The issue is not having sufficient money; the issue is being able to live within your means. The way that God has structured it is that He ensures that everybody on earth has an opportunity to access a certain amount of resources/money that can take care of him to a particular level. But what most of us do is try to change that level on our own. People get into a financial difficulty because they want to jump the process-DAYO LAWUYI, THISDAY LLS MENTOR
“Self-employed people should aim at disengaging early from being self-employed by the age of fifty-five because being self-employed could be very tasking and exhaustive. All the risks, benefits, burdens, decisions, operations, policies, etc., associated with self-employment are solely shouldered by the self-employed. Therefore, such self-employed must create the plan to move early away from their self-employment to build their firms into business systems