By Frank Tagarira
By Frank Tagarira
The greatest reason why many people become entrepreneurs is to make money and at the same time be their own boss. Everyone wants to make money. Some want it in order to be comfortable in life, others simply just want it because they have a big appetite for it. I have a mega appetite for it.
People have different reasons why they want to make money; however, there are only five things one can do with money, and these are:
– Earn it
– Save it
– Spend it
– Invest it
– Give it
Earning Money
There are various ways to earn money. Many people earn their money through Employment, others through Entrepreneurship or Investing. Some even earn theirs through unethical practices like smuggling and stealing. Entrepreneurs earn theirs by providing goods or services in return for income (money). How much an Entrepreneur earns depends on a number of factors such as the type of industry and the market share in that industry, but one major factor is the sheer initiative of the entrepreneur. The entrepreneur should have passion and strategy in order to earn the desired income from their business operations.
Saving Money
Saving money is a good habit whether one is unemployed, an employee, entrepreneur or investor. It doesn’t matter who you are and what you do, but saving money is a good habit. Entreprenuers need to continuously save money in order to have enough cash flow during lean business times. Saving money also makes it possible for the entrepreneur to fund the growth of their enterprise from internal finance (saved income). This income attracts no interest charges since it belongs to the business. It is the cheapest form of business finance. Saved income can even be invested in other business ventures or in money or capital markets (for example: treasury bills and stocks).
Spending Money
This is no doubt a favourite of many people since time immemorial. Many dislike earning and saving money but enjoy spending it. However, there is one simple rule to spending money. Breaking that rule will lead one into a lot of problems. The golden rule to spending money is: “don’t spend more than you earn”. There have been many deaths, divorces and crimes that occurred because someone failed to obey this simple golden rule to spending money. In essence, I am saying: live within your means but at the same time seek to expand your means by earning more, saving more and investing intelligently.
Investing Money
Many people are afraid of investing money because many investments involve a risk. Since most investments are made from hard-earned and saved income, many people have a lot of touchy feelings about risking their hard-earned money. This is why a lot of investments are left in the hands of professionals such as Asset Management Companies, Banks and Stock Brokers. Very few entrepreneurs in Namibia have investments in stocks or even less risky investments such as TBs (Treasury Bills). Investments are a complicated subject for many people indeed. Real wealth is, however, usually made from wise investments. Take note, I said “wise investments” because if you don’t know what you are doing in this field you could easily lose all your hard-earned income. Entrepreneurs should learn about investments in order to grow the returns from their businesses.
Giving Money
Giving away money should not only take place at Christmas. It should be a habit. Giving money is a good habit. Even the holy scriptures say there is much more happiness in giving than in receiving. One should give to charity once in a while. If you are an Entrepreneur, you can even get tax deductions for donating to charity. Remember, we are living in a community where there are less privileged people than you, and your business is making money in that community. It wouldn’t hurt to give something back to the community once in a while. It’s like feeding the cow that’s giving you milk.
BE BOLD BE BRAVE. Earn, Save, Spend, Invest and Give Money!
Frank Tagarira is an Entrepreneur, Business Coach and Consultant.