Money beliefs that keep us stuck

Friday January 12 2018

What are the real, raw motivations that are keeping you from building the wealth you want? PHOTO| FILE

What are the real, raw motivations that are keeping you from building the wealth you want? PHOTO| FILE 

By WACEKE NDUATI OMANGA
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We tend to act out what we believe. Once you believe a certain route to work is shorter or has less traffic, you will rarely deviate from it.

Similarly, your financial status is a reflection of your belief system. Say you are in debt; it is your way of thinking or believing that got you into debt.

You believed that you needed to impress, so you borrowed. You believed that you could always save later so when you were in an emergency, you borrowed.

You believed success depends on how you look, so you borrowed to play the part.

Some beliefs we have are based on society and culture. Others are simply messages that have been drilled into us over time.

If you want to create wealth you have to be ready to challenge the beliefs that no longer work for you. Here are five common misconceptions about money that we need to challenge.

I will save or invest when I earn more.

Imagine your child telling you that they will start eating when they are older; it’s absurd, isn’t it? They won’t get any bigger unless they eat what now. Approach your savings the same way.

If you know how to save Sh100 each month on your meagre salary now, you will have the habit entrenched for when you earn more and can afford to save Sh100,000.

I will ask for a salary advance just this once.

No you won’t. You will keep going back until it’s a routine. You took a salary advance because at some point, your expenses exceeded income. The solution is rectifying your spend, not continuously being on an advance or other form of debt such as credit cards, loan sharks, personal loans etc.

I am doing well because I have a big income, live in a nice house or drive a big car. But if you lost your income today, how long would you survive on your savings or other assets? That’s how wealthy you are. The rest are distractions.

My home is my biggest investment.

The house you live in may be very nice but it’s not an investment. An investment earns you money. A house that you are renting out is an investment; a house you live in is not. Remember, you need money to sustain the home and yourself in it. Whatever brings in that money is the investment.

A deal will come.

My research tells me most people did not get wealthy on a one-time deal. In fact, those who made instant money through gambling or winning competitions tend to lose it just as quickly. We delay getting our act together because we think that at some unspecified point in time in the future, something equally unspecific will happen and cast us off into financial freedom. The bad news is that it is those unexciting, regular activities like saving, learning, investing, spending wisely, pushing through hard times, being disciplined etc. are what enable you to meet your goals. The good news is that these habits develop your character.

You may relate with some of these or as you take a hard look at yourself, realise there are others. For a long time, I never considered life without a monthly income so I didn’t save. Maybe you don’t think small amounts have value. Do the calculations. Challenge the beliefs behind your financial habits. The reason we find ourselves in the same situations over and over is very likely because we have the same belief keeping us stuck. We are creatures of habit because we are creatures of beliefs.

 

Waceke runs programmes on personal finance and entrepreneurship. Get in touch with her on [email protected]|Facebook/WacekeNduati| [email protected]