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Invest or Spend: What should I do? - #4
“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t pays it.” Albert Einstein
We have successfully grown by over 60% this month alone and it scares me sometimes. Sometimes, I wish I didn’t start because I wonder where the strength to continue will come from. At the same time, each newsletter reminds me that there are people who take my words into practice. In my own “little” way, I am creating value that is impacting people’s lives.
Every day, we are faced with issues that require our decisions. We either have to choose between go and come; sleep or stay awake; spend or invest. This is the thing about decision-making that scares me; if you decide not to choose, life/nature will choose for you and the consequence(s) will be borne by you whether good or bad.
So, we must always decide whether to delay gratification or to eat with all our fingers. If you do the former too well, you will miss out on the fun today has to offer. If you concentrate on the latter, you will miss out on compound interest. It’s an everyday dilemma. I have lived both lives so I can tell you the better one. The better option is to balance the two lives. You always need to know how to manage both. Mind you, if you decide not to choose, money itself will choose where to go.
As a young person, it’s easy to choose the spending lifestyle due to peer pressure. There is an innate desire to grow your expenses as your income grows. You want to live a life that resonates with the status of your pocket. I have learned and am still learning to balance by:
1. Re-configuring my mentality about investment – I see it as a do-or-die affair because it is.
2. Automating my investment – I know my flesh will drive me towards unnecessary spending, so I made sure my investments are on autopilot.
3. Choosing dates to spoil me – An example is my salary day. That’s the day I reward myself for all the pressure I faced during the month. Another example is, anytime I meet my savings target for a period, I take out a small amount to buy shawarma (Chicken double sausage please. LOL).
4. Breaking my spending into portions – Tithe, giving, transport fare, feeding, airtime, etc. That way, I can critically follow my money because if you don’t tell it where to go, you will wonder where it went.
5. Investment should always have a higher priority – When you start earning an income, your spending will outweigh your savings and investment but as you grow your income, you learn to build consistency in saving and investment. With time, as your income grows, your investment outweighs your spending.
Lastly, in all your spending, invest. In all your investment, spend. At the end of the day, maintain a balance.
Your Finance Coach,
TL.
Invest or Spend: What should I do? - #4
At the end of the day, maintain a balance. Thank you TL. 💜💜