Tired of Being Broke? Here Are 7 Cures for Your Money Issues
We finally got a chance to put together an editorial calendar for Enchumbao. The editor in me says that you can’t have a publishing apparatus without an editorial calendar, but the relaxed side of me doesn’t ever want us to feel restricted in that sense. We do this out of enjoyment and the minute it becomes too rigid and business-like, it can get stale. After putting the calendar together, I realized that we have enough drafts in progress until September, now we just need to get them to the finish line.
This article was supposed to be about “10 Tips to Make Your Tax Experience Painless Next Year”. My feelings about covering that topic right now: just not in the mood for it! I don’t want to write about that at this moment, so I let my inspiration choose the topic. Which topic is more eager to make it to the finish line? It’s a beautiful creative process. The key here is that it needs to stay fun. Our lives are forever evolving and so will this blog.
In which direction did we end up shifting this time? My mind went to revisit the first book I’ve read about financial advice: The Richest Man In Babylon. It was not only the first but the most significant book I’ve read about basic financial management. It first appeared on the scene in 1926 as a series of informational pamphlets and it was compiled into a book a year later.
This book speaks in parables, set in ancient Babylon, so if you ever read the Old Testament, you’ll probably enjoy the format. The book tells the journey of Arkad and how he became wealthy while others around him remained poor. I liked it so much that I ended up reading it in English and Spanish. I also gave a copy to my dad and he picked up a few tips from it.
This book provided me with the secrets to wealth and success, and planted the seed that I should save 10% of earnings to become wealthy. It also set in motion the desire to become an entrepreneur and try out new things in search for success and prosperity, like starting a magazine. I must have been around 22 years old when I first read it. I didn’t apply all the new knowledge back then, my younger self got in the way, but as you can imagine, some principles started to stick.
In the book, there’s a chapter titled The 7 Cures For A Lean Purse. It’s such a great list that I framed and hung it on my wall during college years. It’s been 18 years since I first read the book, but it took me 13 years of twist and turns to start implementing all the cures. Then, my relationship with money was changed forever.
Let’s revisit that section to see how well the message behind the 7 cures has stood the test of time.
1. Start thy purse to fattening
How do you this? Well, you pay yourself first. For every $10 dollars that you make, one is yours to keep. Some might argue that it’s hard to save with the high cost of living, but there are ways. If you want it bad enough you go get it. And the Enchumbao way is to put savings first, and not last, to achieve financial independence much sooner with a simple but fulfilling lifestyle. Mrs. Enchumbao and I actually save a lot more than 10% to get this done in less than 10 years. This should be achievable by keeping your lifestyle inflation in check. Another key point here is to stay away from borrowing for personal consumption.
2. Control thy expenditures
Keep your expenses in check. There’s a difference between needs and wants, so budget wisely. We believe that cutting an expense has a bigger positive impact on our personal finances than increasing our income to cover that expense. Two things happen immediately after you eliminate it, 1) you don’t have to work for that expense and 2) you can invest the savings. I’m not advocating for minimizing your income potential, but if I have to work longer to pay for a fancy car to drive me to work, I’m cutting the fanciness out of the equation. No need to impress anyone, end of story.
3. Make thy gold multiply
Once you start saving, you need to multiply that money by making those “dollar employees” work for you. Do your homework and invest it wisely.
4. Guard thy treasures from loss
Ever hear stories of people winning the lottery and losing it all within 5 years due to poor decisions? Money runs away from inexperienced hands. If you need investment advice about equities, talk to a certified financial advisor or a reputable investment firm, not a speculating friend. If you need to learn about real estate, read books, talk to realtors, search online, talk to people in the industry. Again, do your homework. Speculating is not investing. Look for advice from the right individuals.
5. Make of thy dwelling a profitable investment
Own your home and make a profitable investment out of it. Now this is where many of us got in trouble during the housing crash. Just because the bank says that you can afford it, doesn’t mean you should buy it. Buy only as much housing as you need and you’ll be in a better position to pay off a mortgage earlier, or free up money that can be invested elsewhere.
6. Insure a future income
Think about how to provide for you and your family in the future, when you’re no longer working. Now what better way to secure future income than by becoming financially independent?
7. Increase thy ability to earn
Become wiser and more knowledgeable. Find ways to increase your income. Use your free time to learn a new skill instead of keeping up with the Kardashians. The learning doesn’t stop after school or college. I read more than ever now, and the more I read, the more I realize that there’s so much more to learn. Learn about investments and how they work, because at the end of the day, nobody cares about your money more than you do. Make it soar for you!
These are very basic financial principles. So basic that we tend to overlook them. I think that’s because we like to complicate things, and complicate the money management process as well. Change your mindset and behaviors, and you could be in for a big surprise. Your future self will appreciate it as well. 🙂 Wake up to a new beginning! As Bill Gates once said: “If you’re born poor, it’s not your mistake but if you die poor, it’s your mistake.”