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Personal Finance

How to build solid income security for yourself

The wise thing to do is to pursue income security and not Job security and separate your income from your job.

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The future of work is not Job security but Income security, the ability to earn income regardless of salary.

Work as we know it today will be different post-COVID-19. There will be downsizing, salary slashes, layoffs and so on. The truth is the insecurity in the job Market will triple. If you are still holding on to your job congratulations but not for too long. While we pray that nothing bad happens to your job, we cannot rule out the possibility of it happening someday. You cannot guarantee your job security. Your employers can’t, neither can the government, and here is why.

Job security is not in the hands of your Employer. Job security is in the hands of customers. When customers patronize businesses, organizations make money and are able to keep jobs intact. But when consumers are scared to spend and hoard money. Organizations must trim down jobs to stay alive.

Additionally, organizations are realizing that certain job roles are no longer important for their survival. They are also shifting from the traditional workforce model to an independent and remote workforce model exposing certain gaps in the system. The only way to protect yourself long-term from the hammer of a job is to secure the one thing that makes a Job important to you. Your Income.

The New security is thus now income security. That is the ability to keep income flowing even when a job ends. This is important because a job is a short-term need while income is a lifetime need.

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While you may survive without a job, you cannot survive without income. So the wise thing to do is to pursue income security and not Job security and separate your income from your job. You must be able to create the kind of income that does not require ongoing work to thrive.

So, how do you create this kind of income?

To create lasting income you must do three things. First, you must increase your savings ability. Second, you must create new income sources within and outside your Organization. And third, you must separate your income from your job and create an independent Income security for yourself. Let me explain each of the points in detail.

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The first is to increase savings ability. To create income that is free from job loss you must save a sizable portion of your income each month. The average employee saves 5-10% of their income. This kind of sluggish saving will only extend the number of years you will have to work.  The most successful people save 40-50% of their income. They are able to exit the corporate world in their youth and achieve financial stability at a young age.

They increase their savings at every opportunity and short cut their years of active labor. To create income security that stands the test of time you must push your savings beyond average and here is why. It will take you 10 years to save 12 months of your current salary if you save just 10% of your income. How many more ‘ten years’ do you have in the corporate world? Approaching savings with a lazy attitude as this is getting rich never. Without the discipline and commitment to save above average, financial freedom is out of reach for you.

The second thing you must do is add new sources of income to your existing income. And there are two ways you can do this. The first is to earn more income within your current organization. The second is to find new sources of income outside your organization. Earning more income within your organizations is important because you spend over 70% of your time at work.

Most people do not even have extra time for anything else. This means they can only invest only a small fraction of their time in outside sources of income. And these sources must be high-income sources to create a major change in their lives. Thus the focus on one’s place of employment make sense. To earn more income within your organization you must become a problem solver.

Every organization has problems that need to be solved. The closer the problem is to the bottom line the higher the reward. This means that organizations are constantly looking for people who can solve their problems. If you can solve a problem that is important to your organization you can negotiate a cash or kind reward that can fast-track your journey to financial freedom.

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Do you know the top three problems of your organization? Have you found a new way to help your organization make more money? Do you have skills that are in high demand? Are you unique and different? To successfully solve organizational problems, you need creative and negotiation abilities.

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You can also earn money from other sources of income outside your organization part-time. You can earn passive income through your investments and you can earn commission from other organizations willing to pay you for referring customers to them. Salary plus commission is the easiest most effective way to Remove the Ceiling from your Income and earn income that is bigger than your salary.

The third thing you must do is to separate your income from your Job and create an Independent Income for yourself. You do this by first saving big portions of your income. Savings is the only thing that keeps money in your pocket. With your savings you can then create a system of generating passive income and begin to build a solid passive income portfolio that can fund your life.

Funding your life from an uncertain source of income like salary is choosing to suffer financial stress for the rest of your life. Your goal as a smart employee is to create a life that thrives regardless of salary. Because only then can you truly gain control over your time. There is no job security anywhere.  The only security that exist is the one you create for yourself today.

If you want to create income security, increase your ability to solve problems or upgrade your knowledge about investing for long-term financial success, we can help you. To learn more, send an email to the email address at the end of this article.

The best use of your corporate career life is to create a solid independent income that will carry you throughout life and Not to enjoy a temporary prestigious Job life.


About author

Grace Agada is The Senior Financial Happiness Director @ Create Solid Wealth. She is an Author, and Column Contributor in Six National Newspaper. She is a contributor at BellaNaija, Nairametrics and Proshare and she is on a mission to help working-class professionals and CEOs become more financially successful. To learn more about Grace and how she can help you send an email to [email protected]

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Nairametrics frequently publishes articles from experts such as financial analysts, economists, researchers and investors. We also feature articles from guest writers and bloggers who wish to push their views and opinions through our platform. To get your articles on Nairametrics, kindly send an email to [email protected] and we will publish it within 24 hours of approval by our editorial team.

4 Comments

4 Comments

  1. Buzzo

    October 9, 2020 at 4:43 pm

    Love this article and would need guidance to practice the points itemized here…thanks

  2. Adams Eyije

    October 9, 2020 at 4:57 pm

    Thanks so much another one please

  3. Jerry

    October 10, 2020 at 5:56 pm

    This is great.

  4. Gloria

    October 11, 2020 at 12:15 am

    Nice one, this article is good.

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Personal Finance

The five hidden secrets for investing success

These are the five main differences between making money, saving money, and investing money.

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How young Nigerians invest

One of the popular questions I get asked all the time is this; how do I invest for financial success or how do I make wise investment decisions. Today I will show you how to invest for long-term financial success. There is the right way to invest and there is also a wrong way to invest. The right way leads to financial success and the wrong way leads to financial failure. This means that the same investment vehicle can make you rich and it can also make you poor. I know this because there is virtually no person that I know today who has not lost money in investing before.

READ: Here is how much you should save at every age

To achieve financial success you must know how to invest without losing money and you must also master the three abilities necessary for investing success. The first ability is the ability to make more money and earn high incomes. The second ability is the ability to save big portions. And the third ability is the ability to invest your savings without losing it. These are the three secret formula for investing success. Unfortunately, only a few people know this formula or even thrive in all three areas. Many people are good at making money. They make a lot of money and save little or nothing. Some are good with savings. They save a lot of money but then lose it all through investing. And others are good at investing. They invest well but have little savings to make any significant progress. If you want to achieve financial success, you must thrive in all three areas. You must also know the key differences between them. There are five main differences between making money, saving money, and investing money. And these five are the hidden secrets for investing success. Let look at each of these five components in detail.

READ: Where to invest $10,000 right now

Secret No 1. Money making, saving money and investing money are different

Making money is a money-producing activity. Saving money is a money preservation activity. And Investing money is a money growing activity. To make money you need to solve a problem for other people and earn money for the problem you solve. To save money you need the discipline to live below your means and the self-love to pay yourself first. And to invest money you need some money and the right investment vehicle. Making money thus requires problem-solving skills, saving money requires the right attitude, and investing money requires money. So why you can make money from scratch with your skills. You cannot save from scratch or invest from scratch. To invest you need to save. To save you need money, and to get the money you need money-making skills.
Secret No 2. Investing Cannot Make you Rich

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READ: Investing & Gambling: Differences and Where They Intersect

Investing does not have the power to make you rich neither does your savings. The only way to be rich is to solve the problem of many people. The richest people in the world are all problem solvers. They solve problems by creating products and services that meet a need. And their wealth is the reward for the problem they solve. There is no single person in the world today who made their money solely through investing or saving. The fastest way to create wealth is to solve problems for many people.

READ: Financial skills everyone should master (1)

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Secret No 3. Investing is a poor money maker but a rich wealth creator

Investing and investment vehicles are poor money-makers but rich wealth creators. While they can make you wealthy and increase your Net-worth they are poor income producers. Many people in the bid to make up for their lack of money-making ability try to force the responsibility of making money on their investments. They become aggressive, take unsafe risks, and put pressure on their investment to produce high returns. They are lured by “get rich quick schemes” and make erratic investment decisions. They do this in the hope that their investments will produce the income they need to be rich. But this is a recipe for failure. The purpose of investing is to grow your savings and produce passive income and not to make you Rich. Your job is to refine your skills, build rich relationships, learn about sales and marketing so you can make multiple streams of income. As you produce more income and invest more money your passive income begins to build up to the point where it can carry the weight of your bills. This is the point where you can begin to relax a bit. Until then, keep refining your ability to earn multiple streams of income.

READ: Big mistake: Ripple’s CTO sold his Bitcoin for $750

Secret No 4. Investing can do five things for you

Investment vehicles have five capabilities and can do five things for you. The first capability is protection. Certain Investment vehicles can protect you from risks and emergencies. The second capability is passive income. Certain investment vehicles can produce passive income for you. The third capability is principal appreciation. Certain investment vehicles can grow your invested capital. The fourth capability is gambling. You can gamble with certain investments and lose all your money. And the fifth is sales income. You can get back your money with interests when you sell a profitable investment.

Secret No 5. Investing is easier than making money and saving money

Investing is easier than making more money and saving money. When you want to invest all you need is a clear understanding of where you are going, how to be safe on your way, and how to get there. It is like a car, you don’t need to know all the component parts in your car bonnet. But you need to know the fundamentals of driving a car, how to be safe inside a car, what to do to get to your desired destination, and who to call when your car has a problem. With this critical information, you can successfully drive a car. Similarly, you can invest successfully by just knowing the fundamentals of investing and collaborating with advisors and investment experts who know the tiny little details about investing. Only a few wealthy people in the world are investment gurus. They simply know the basics and surround themselves with experts that can help them. This is what you must-do if you want to achieve investing success. But when it comes to making more money and saving money the story is different. While you can learn how to make money and save money from other people. No one will make money or save money for you, you have to do this by yourself. Also, nobody’s skill or expertise will work for you. You have to develop your own skills and expertise to make more money and save more money. This makes making more money and saving money more difficult than investing. Nevertheless for you to be successful you must focus your energy and attention on making more money and saving money. You can always get help with investing and succeed in investing without being an investment guru.

READ: 10 ways to save and make more investments

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Investing for financial success is the dream of most people. However, there is the right way and the wrong way to invest.  The key to success with investing is to recognize the difference and understand the five secrets we have discussed in this article. The truth is your salary will never be enough to achieve all your goals. Your Investments will also not make you rich. You need to increase your ability to earn more income and save a major part of that income to thrive.

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If you want to learn more about how to invest with total financial confidence or how to make more money and save more money we can help you. To learn more send an email to [email protected]

Great investing success is not about the amount of time you put in it but the knowledge and principles that govern your investing.

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About author

Grace Agada is The Senior Financial Happiness Director @ Create Solid Wealth. She is an Author,and Column Contributor in Six National Newspaper. She is a contributor at BellaNaija, Nairametrics and Proshare and she is on a mission to help working-class professionals and CEOs become more financially successful. To learn more about Grace and how she can help you send an email [email protected]

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Personal Finance

Budgeting on a fluctuating income

Today, we discuss strategies on how to plan one’s budget, especially when you do not have a stable income.

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SAVE, LIABILITY, FINANCIAL, EXPENSES, BUDGET

One of the best ways to keep a lid on one’s finances is to have a budget and stick to it. It takes a superhuman effort to set up a budget and insist on not spending outside of it. Budgeting becomes much easier, especially when you know what your monthly income is.

But what about individuals who are either self-employed, freelancers, or those whose earnings are commission-based? How do these people budget on what they do not know? How can they budget on an unpredictable income and cannot be planned on as it depends on lots of variables beyond them?

Truth is budgeting can sometimes be assiduous, but budgeting on an income that is not stable will be more technical and more brain-tasking as one would have to be creative in his planning.

In this blog article, we would be filing out free strategies on how to plan one’s budget, especially when you do not have a stable income.

Always estimate that you will be earning very low

When your monthly earnings are irregular and depend on circumstances mostly beyond you, you would do well always to envisage that you will be earning a very meagre amount every month.

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By basing your budget on the probability that you will be earning very low, you will be able to fathom items that should be at the top of your list. This way, you would be budgeting for the necessities, and you would have no room to think of items that would only be consuming your funds.

Calculate your monthly least expenses

You already have envisaged that your earning will be low; you must also calculate the barest minimum of your monthly incurred expenses.

Your monthly expenses would cover items like groceries, transportation, health emergencies, insurance, and other essential services you must cater to every month.

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Calculating your minimum monthly expenses would also help you know how much you must earn to keep body and soul together on month by month basis.

Always have an emergency fund

One piece of advice that is even tenable with those earning a stable income is for everyone to have an emergency fund somewhere ready to be used when the need arises.

This fund could be used to handle health emergencies, house repairs, or any other kind of crisis that might occur during the period.

Without an emergency fund, you will most likely run into debts to keep up with handling these necessary expenses. You should always make room for an emergency fund in whatever you earn during the month as it could be a lifesaver in the long run.

Pay yourself

After labouring for a month, it is only right that you pay yourself a monthly stipend for all of your efforts. This fee would help you to be able to save more money than you would be able to ordinarily.

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Paying yourself monthly would help you to keep a leash on what your expenses are. In months when you can earn more than you might have envisaged, you quickly would be able to know what to do with such earnings rather than in periods when you never paid yourself, and you allowed undue expenses to eat the bulk of whatever you have earned.

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Avoid debts

Anybody who earns an unstable income has to do well to avoid debts. Debt is spending your future earnings now. And in your case, you don’t know what that future earning would be.

You might have gone ahead to over-borrow when you could be earning less. It would be best if you remembered that your earnings depend on so many factors, and they are not all in your control.

A client may decide that he does not need your services again, or he could choose to defer his payment or even cut your pay. If you had gone ahead to borrow, thinking that you would be making a refund with what you earn from that client, and any of the above situations happens. You would have ended up creating an avoidable mess for yourself.

So, if your earnings are not stable, try as much as you can to avoid debts.

Budgeting on a fluctuating income can be frustrating sometimes but if you follow the strategies discussed by the book, you should be able to confidently set a budget for your irregular income and live happily and without fear.

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Explore Some Advanced Financial Calculators On Nairametrics

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Personal Finance

The top money mistakes people make in their 20s

Below are 10 top money mistakes people make in their 20s and how to avoid them.

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Financial skills everyone should master (1), Financial decisions for 2020, Between saving, investing, speculating, trading & gambling

In your 20s, you are either in your last year in the university, just starting your career or setting up a business. Either way, you are still new to many things and just building up yourself.

Your 20s is the time you learn, make mistakes and grow. People say you can’t grow if you don’t make mistakes; however, there are some costly mistakes you should try to avoid. They might end up helping your growth but spoil a lot of things before then. One of such mistakes is money mistakes.

Money mistakes are made when you don’t have enough financial knowledge, and this can land you in debts you have to keep paying for, years after. Below are 10 top money mistakes people make in their 20s and how to avoid them. These tips would help you to make wise money decisions from now.

EMOTIONAL SPENDING

The top money mistake young adults make is emotional spending; Many spend to make themselves feel happy. If your happiness is tied to spending, you will have a problem trying to save up or plan for the future.

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SUBSTITUTING GROWTH FOR MONEY

In your 20s, you are just starting your career. You will have many job offers with mouth-watering pay. It is only logical that you choose a job that offers growth instead of money, if you are interested in making more money in the future. You might want to start making enough “dough” now, but in the long run, if you don’t increase your value, you are going to remain stagnant.

“NOT CUTTING YOUR COAT ACCORDING TO YOUR CLOTH”
Young adults tend to spend more than they earn because they want to stay in vogue. This is a common money mistake many make. If you spend more than you make, you tend to run into debt quickly and become financially unstable. Your 20s are not the time to live in luxury (unless you can afford it) or buy the things you cannot afford. If you will save more when you stay with your parents than if you stay alone, why not stay with them? If cooking at home would save more costs than buying food from restaurants, why not cook at home? Don’t live beyond your means.

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SITTING COMFORTABLY IN DEBT

Many young adults are comfortably sitting in debt. Understandably, some situations might warrant you taking loans like student loans or personal loans. However, it is a wrong move to stay in debt for a long time. You should save up or look for other sources of income to settle your debt. ‘Don’t sit comfortably in debt’.

NOT SAVING UP FOR EMERGENCIES

Emergencies are money-draining circumstances that are unplanned for. To prove that you are financially stable in your 20s, you should save up for emergencies. Young adults often make the mistake of not saving up for emergencies, hence, hitting them hard when it (emergency) comes.

NOT HAVING A FINANCIAL PLAN

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For every facet of life, it is essential that you have a plan; however, having a financial plan tops it all. Having both short and long-term goals shows that you are serious about being financially stable.

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NOT KNOWING THE DIFFERENCE BETWEEN “NEEDS AND WANTS”

The importance of knowing the difference between needs and wants cannot be overemphasized. In your 20s, you should know the things you truly need and the things you can do without. Your needs should be 90% of your budget if you are seeking to become financially stable.

RELYING ON ONLY ONE SOURCE OF INCOME

Have you ever stopped to ask yourself, ‘what if I lose my job?’ or ‘what if this business crashes?’ It is very risky to rely on only one source of income. You are most energetic in your 20s; it should be the time you take on different jobs to earn more money.

SPENDING AIMLESSLY

As a young adult, you must track your spending always. There are many tools and mobile apps available to do this. Track your spending to make sure you are not spending more than you are receiving. You can do this by putting down your expected monthly income and plan how you are going to spend it, including your savings and emergency fund to the expenses. This way, you don’t buy on impulse because you have a financial vision for the month.

NOT HAVING HEALTH INSURANCE

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Many young adults don’t see the need to have health insurance, and this is a huge mistake to make. Health insurance gives you peace of mind and saves you from spending more. It also shows that you are concerned about both your health and your finances.

We have not only discussed the money mistakes people make in their 20s but also put out tips on how you can avoid them. You don’t have to make these mistakes too before you learn how to be financially stable in your 20s.

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