Sometimes we spend a lot of time and energy looking for money but end up broke in just a few minutes. This could be a result of bad money habits and decisions.
Edwin Nduati, the founder and Chief Executive Officer (CEO) of Legacy Wealth, shared some things you should never do with your money if you want to be wealthy.
Don’t keep money in your savings account for too long: The rate of inflation is currently very high, and keeping money in your savings accounts means the purchasing power of your money is decreasing by the day.
And that’s why you will find that the things you can purchase with Sh1,000 right now are less compared to five years ago. Life and price continue to be expensive every day, so if you don’t invest your money wisely, you’ll end up with less at the end of the day.
Don’t spend before saving: By saving, I mean not just putting some money for your emergencies in a savings account. Put it in the money market accounts. Consider that as paying yourself. Invest your money and let it work for you.
Don’t put all your money in one basket: It’s wrong to put your money in one basket because you not diversifying your risks. As Kenyans, we have this unhealthy relationship or obsession with land. So you find a lot of people have put a lot of their money in land.
And I’ve seen so many people struggle to dispose of this piece of land when an emergency comes up. No investment is wrong. What happens is each investment has a set of needs that it is going to take care of.
The first point you need to start with is get to understand the needs that you are trying to cover. That way, you will be able to know what your investment is going to do for you.
Don’t make emotional purchases: Personally, I spend a lot when I am in a happy mood. However, what that does is it just draws you further away from your goals. There are a few things that I’ve done to make sure I don’t end up spending money emotionally or just making that impulse purchase.
So I have a 48-hour rule where If after two days I feel like I still need that particular thing, I purchase it. I also stay away from credit cards as well as places where I am likely to spend a lot of my money.