Coming from a country with literally no economy (Zimbabwe) I was always very nervous about investing and even though I knew I needed to be doing it, I was always wary of having my money in an investment account. I mean, I lived through hyper-inflation (twice).
Growing up I was taught that having an asset was more valuable that having money. Which was valid, as there was literally a time where we could not get money out of the bank because the bank didn’t have any. I remember a time when people were trading cars and assets to pay their kids school fees etc. Strange times, but as you can imagine it made me hesitant to put my money into an institution.
Pretty early into moving to South Africa, my small student budget just was not cutting it. So I got a part time job as an au pair and since I was now living in a country that had banks with actual money in them, I knew that I had to be saving money. At first I was saving every little thing that I had to be able to buy an asset.
I did what any person with limited financial knowledge would do, I kept my money in a 32-day savings account. Now that I am older and I hope a little wiser, there are so many things that I wish I had done differently. However, it’s easy to look back and say “If only” but really, the habits I started in my early 20’s have helped make me that boss b**ch that I am with money today.
Here are some of the habits that have helped me build my wealth:
Saving my Money
There is a difference between saving and investing but being so good with saving the money that I earned from student jobs, I had started the habit that people battle with the most. Paying yourself first.
Luckily, with apps like Franc it is very easy to start putting your money into investment accounts
Being interested in wealth creation
A lot of people dream about being rich, but very few people put in the work to find out how it is done. Research. Research. Research. I have liked, tweeted at, and followed any account that gives information on investing for as long as I can imagine. Financial literacy is the best thing you can do for yourself, and with free resources like Franc Academy and YouTube, all the information is there and it’s free. You just must want to find it.
Ask questions
I was brought up thinking that talking about money was “not the done thing” – something that sadly only changed for me in the last 4yrs. Now I ask everyone what they are doing. Start with asking questions to your immediate family and close friends. Find out where people are putting their money, what is working for them and resources they have found useful. Everyone is too nervous to ask, and thinks the topic is taboo. This needs to change, don’t be afraid to ask and to help people who need it.
Calculated Risk
I have always been a risk taker; I love a bit of a punt. However, having lived through an economic collapse I have seen first hand what taking on too much risk can do. However, I think a little calculated risk is good. Calculated risk is basically doing a lot of research into the risks you are going to take. It’s finding how far down the cliff you are jumping to land in the water, to see if it’s a safe distance. It’s not just jumping while screaming YOLO. My advice with risk when it comes to money is only take a risk with money you are ok losing. And do your research, if it’s too good to be true – avoid it.
Find different income streams
If you say that you don’t have any money left over after all your bills are paid, then you need to find another way of generating income. I have always been a hustler - I au paired, I was part of focus groups, anything that brought in a little bit more money. Nowadays it is much easier to make money, all you need is an internet connection and you can create another income stream by doing odd jobs such as reading books online. There are opportunities out there, don’t turn them down cos they only pay a little – a little over a long time builds up. Compound interest my friend.
Lifestyle creep – Need vs. Want.
Even though I am now 33 and am earning substantially more than my 23yr old self, very little has changed in terms of my spending. I keep my costs as low as possible and do not get pulled in by the flashy new things people are always trying to sell me. Do I want a new car? Yes. Do I need new car? No. Do I want to buy Gucci loafers? Yes. Do I need Gucci loafers? No. I look at everything I buy an ask myself, do I need this? Or do I want this? This makes me stop and think before frivolously spending.
Short term personal rewards
Investing is for the long term, but I do believe in short term personal goals. I like to set myself up with challenges. Putting money away and having to wait a long time to reap the rewards can be disheartening… So, I set short term rewards for myself. For example, for the next 3 months my goal is to invest 40% of my earnings. Will it be a hard challenge? Yes. Will I have to make some scarifies? Yes. Will my boyfriend be buying groceries? Yes (he doesn’t know that yet). Will I reward myself at the end of the three months with something I have really had my eyes on or a pamper session? Yes.
I am a big believer in learning from others, so I hope this blog post has made you at least think about your money, your habits and your lifestyle.
I really do think I should treat myself to those Gucci Loafers. I mean, have you SEEN them?