What is money all about? I will tell you in a moment without boring you with economic terms. We work for money; that means money stores value. We exchange our time and skills as a reward, and that reward is something that we can store & spend. That’s where money comes in. That store of value has to be countable, and hence money needs to have units. Being divisible into units allows us to use it as a means of exchange to facilitate trade. Hope this is making sense, or I am speaking a lot of English?

Since money is pervasive and ubiquitous a subject we cannot run away from, then it is pertinent for us to know a thing about it. It is counterintuitive for people to hope that we will just learn how to make, manage, invest and give out money without being taught. Unfortunately, there is no school curriculum for Personal Finance, but you have to be able to lead yourself in all things including finance before you lead others. A good education does not mean you know about money. Same with being anointed or being from a wealthy family. Financial literacy is not genetically transmitted. For the fact that it is an education means that it takes a process to imbibe the know-how.

After Isaac Newton lost money in one of the famous market crashes, he said, “I can calculate the motions of the planets, but I cannot calculate the madness of men.” He was perplexed by it. Why? Just like physics has laws, money does too. It is not an arbitrary thing. I will generally talk about the character of money.

First is that money assumes the character of its owner. If the owner is a philanthropist, then more good works. If the owner is an armed robber, then he gets more guns. So, money is amoral. It is neither good nor bad. There is nothing wrong with money in itself. It is neither good nor bad. It depends on who owns it. Money is NOT the root of all evil. It is the LOVE of money. Those are two different things. Chemicals are okay until you mix them. Money is okay but not when you set your affection on it. To be in good stead with money, you MUST learn to manage it. Learn means you have to put in some effort to know more. Don’t depend on hand-me-down stories but rather take out time to learn.

To be in good stead with money, you must learn to spend less than you make. A very simple thing to say but hard to implement but do not be fooled to think that others have not been implementing it. Not taking that first lesson leads to debt. Debt is not proprietary to bad people. Good people also get into debt if they do not learn to manage their money, live on a budget and are strong enough to say NO even to seemingly good causes. Debt is a double-edged sword. When you learn to spend less than you make, then the remnant is saved and invested. The sole aim of saving is to build a habit. It is not what you save that matters, rather it is the habit formed. Some part of your money is bread to be eaten and some are seeds to be sown.

Saving is for many things like paying big bills, e.g. house rent, planning for future expenses. Those invested are also for habit making. I made my first investment with petty cash. Most stockbroking/investment houses did not want my kobo kobo, but one took a chance on me. Keep asking and knock if possible and a door will be opened to you. As Robert Kiyosaki said that he’d met many poor people who never lost a dime, but he’d never met a rich person who never took the risk to invest.

Investment involves both risk & opportunities. What looks sure today can be shaky tomorrow and vice versa. So how do you know what to do? This is where the difference between Risk and Risky comes to play. Let me demonstrate. When you marry a girl that you have dated for 2 years, that carries a risk but somehow you have assessed it and have taken a decision. Everything in life carries a risk; even drinking water. Risky is marrying the girl you met yesterday. You have no idea what the next year will be like. Risky is based on hearsay or your feeling at that moment. No analysis was made. You went with the flow. This is bad in money management. You must first learn to earn. Think of school; you were there for many years before you were employable. Earning about money is crucial. Learning is what brought us here and we will continue from here in the coming days.

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