Analyse Your Income
When we put your income on a scale of 100%, 10% of our income should go into paying tithe for those who believe in it or giving to the poor in the society, 20% of our income should go into capital investment: you buy land, build house, etc. those assets that are fixed should take 20% of your income.
The next 20% should go into floating assets: you buy stocks in good companies where you get dividends or trade for capital appreciation, invest in Treasury bill etc.The next 25% should be in cash. This is the cash in your bank account. You should never touch this cash or use in wasteful spending. This is what will help you when things are not so good. You should grow the cash by way of re-investing both the principal and interest.
The last 25% should be on compulsory expenses: these include clothes, shoes fueling and servicing the car, rent etc. This is the actual part of your income you spend to service yourself.Assuming you earn 4million in a year, at the end of the year, do you have up to a million naira as cash in your account? Do you have up to a million naira in fixed assets such as land or did you invest up to a million on that building you are constructing? Do you have up to a million in shares of companies? Or do you just realize you’ve spent all your income on waste? Spending it on luxuries you really cannot afford?
You should attempt to build a comfort zone by putting most of your income in fixed assets, stocks and cash. These are the things that will make your life easy when the job is longer there.
How many of us at the beginning of the year draw a personal budget for the salary year…You look at your expected income and ‘royalties’ and distribute them according to above cardinal points? Or do you just begin the year without a plan? We move out to the field without a purpose. Remember if you do not plan, then you are planning to fail.
I am not saying you should adhere strictly to the things mentioned above, but let it serve as a guideline. In fact that’s why you must plan. Things rarely go according to plan, but when you have a guide, you have a sense of purpose and you can make corrections and begin again
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