How can you help your money grow?

by | Jul 11, 2022 | Personal Finance

Helping your money grow and obtaining financial freedom is an aspiration that most people hold, however the realisation of it is not always so straightforward. Financial experts define financial freedom as having enough savings, financial investments, and cash on hand to afford the kind of life we desire for ourselves and our families. The idea is to build enough reserves to be able to retire or pursue a career without being confined by an annual salary. When we are financially free, our money works for us instead of the other way around.

While many might have various roadmaps to get there, the crux of the matter is that the key to becoming financially free is paying off debts, creating a safety net of savings funds, and generating passive income through investing or business ownership that will cover your current and expected future living costs.
Naturally, the first step in this journey would be to examine your current financial situation. ‘If you don’t know where you come from, you don’t know where you’re going.’ The famous Maya Angelou quote is especially true in the journey of pursuing financial freedom. As scary as it may seem, add up all your debts, including all the small loans from friends and family. Also calculate all your savings as well as the amount you need to cover your living expenses on a monthly basis. Do the latter even if you have not yet started saving, so that you can figure out how much you can afford to put away towards your savings with your new financial plan.

Another important aspect of examining where you are and where you come from when redressing your finances is paying careful attention to your money mindset. To be able to live like a millionaire, you have to think like a millionaire. Most of what’s keeping a lot of people away from their financial freedom could be attributed to their money mindset. For this reason, it is important to identify the money blocks that are keeping you broke. Generally, money blocks are any series of thoughts, a mindset, or a feeling that gets in the way of you accomplishing financial success. They can include limiting beliefs about money, negative self-talk, non-specific financial goals, focusing on others, and not forgiving yourself for money mistakes.

Once you have identified and addressed these money blocks and adopted a new positive money mindset you are well on your way to growing your money and obtaining your financial freedom. Now, establish your savings goals and calculate how much you can put away each month toward them. If you are stuck on establishing savings goals, a good place to start is saving for emergencies and saving to invest. While we all know that saving for rainy days is an essential part of staying on top of your finances, we often underestimate the value in saving to invest.

It is no secret that investing is one of the most popular and surest way to grow your money, however the money to invest is not always readily available. This is why you might have to save up. As soon as you have enough funds, you can invest in long-term opportunities.

Okay so let’s step into the investing game. While investing profitably is as complicated as it seems, there are some basic tools that can help simplify the process a little. Before you dive into the deep end however, it is crucial that you tie up some loose ends like paying off high interest debt and building up your emergency fund, so you have enough financial breathing room to invest with ease. Once that is out of the way the next step is to evaluate your comfort zone of taking risk because, the truth is, all investments involve some degree of risk. In the long run, it might be more profitable for you to invest in riskier asset categories, such as stocks or bonds, rather than in less risky assets, such as cash equivalents, if you have a long-term financial goal. In contrast, a short-term financial goal may be met by investing exclusively in cash investments. Also, rather than throwing all your eggs in one basket it is beneficial to consider an appropriate mix of investments. This is why it is important to ensure you educate yourself as much as you can on the type of investments you want to venture into as well as seek trusted professional advice to avoid getting scammed.

Arguably the most important form of investment, investing in yourself is as paramount to making your money grow as investing in the stock market. You may do this by deciding to invest in your financial education, which can help you to save thousands of rands in your lifetime. You could also choose to invest in your business and take control of your income.

Side hustles have increasingly become the most popular way of growing your money and the great thing about them is that if you do it right, they can yield results sooner rather than later. More than having an extra source of income, side hustles are a great idea because they can help people find fulfilment in ways that they were unable to in their day job. This is derived from not only pursuing your true passion within a less pressured environment, but also, the financial ease and the liberty that comes with having a back up plan, offers owners of side hustles a freedom they had never experienced before.

Learning to make your money grow and achieving a level of financial freedom can be more than just a dream to aspire to. With the right mindset and the correct tools in place, it can be attainable to even those at the lowest end of the economic spectrum. Founder and Debt Counsellor at National Debt Advisors (NDA), Sebastien Alexanderson says most people delay their chances of success because they avoid facing their overwhelming debt as they believe that there is no way of overcoming it. This could not be further from the truth, explains Alexanderson. “Debt is something we all struggle with. Regardless of the debt you have, it can seem impossible to pay it off, as interest keeps mounting while income remains stagnant. The good news is that with the right strategies, it is possible to pay off your debt and get your finances back on track,” said Alexanderson.

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