Don’t be afraid of money 

Jocelyn Newmarch
Thu, 13 Oct 2005

This article is a printout from iafrica.com
Copyright © 2000 iafrica.com*, a division of Metropolis*

It’s easy to be afraid of money. We spend our lives chasing after it, and when we’ve got it, it seems to do its best to get away.

What is money and how does it work?

Surprisingly few of us can answer that question — even though we may be high-flying professionals with a flashy car bought through vehicle finance, a wallet full of credit cards, and a company pension fund.

The truth is that managing money is a skill, and it can be learnt. True wealth is about what you have, not what you spend, and it’s worth learning how money works, and how you can take control of your finances.

If you’re afraid of your money, you’ll always take the safe way out, but in the process, you could end up paying more than you need to in fees and costs, and you could be losing out on performance. Your fears will keep you from thinking through money matters in a logical way, and in the end they’ll hold you back.

Common sense
The rules of good money management may seem complex, but they’re based on common sense. If you don’t put in, you don’t get out. Life is about change, and risk is inherent. Building wealth isn’t about reducing risk, but learning how to manage it.

The truth is, money is a natural part of the society we’ve built. If you have a job, you have money coming in every month. Money is abundant. But we’re always pressed for cash, because we haven’t yet taken control of it.

Knowledge is power
Keep yourself informed about what the markets are doing. Don’t be afraid to ask for advice, but at the same time, don’t accept what you hear without questioning it. Everyone has their own interests — and sometimes fears — at heart. If you don’t understand an investment, don’t buy it. Information is your greatest asset.

Get excited about your money. Money is a powerful tool if you use it correctly. Make sure you’re always reducing debt, rather than adding to it, and that you’re aware of what your investments are doing and why. Understand what is meant by a diversified portfolio and work towards it.

Examine your beliefs about money. If you believe you’ll never be rich, you’re right — you never will be, because you won’t even try to work towards that. If you think money is a subject best avoided in polite conversation, you’re cutting yourself off from a powerful knowledge source.

The price of money
Keep costs in mind. The interest rate banks and financial institutions quote you is the price of money — nothing more and nothing less. You can choose whether or not it’s a price you want to pay. Just as with any product, you have the right to shop around — or walk away entirely.

We all make mistakes, and of course money is no exception to that but we, also, all have the ability to learn from our mistakes. Find out where you went wrong and why, and use that knowledge in future decisions. Risk comes with reward — you can’t have one without the other.