Over the coming days, we are going to discuss how to deal with a empty bank account, and how to build wealth for yourself and the future generations. We will be basing the lessons on a book called “The Richest Man in Babylon.”

FIRST CURE: START THY PURSE TO FATTENING.

The stream of money that flows into and out of one’s life is immense. Wealth and security can be secured from it, but only if portions of that stream are diverted.

You should save at least 10% of your total income. Every month. Accomplish this by setting aside that ten percent before all other expenses are considered. When you get your salary, pay yourself first! It does not matter how you earn your income, whether it is being a carpenter, teacher or pharmacist. All of us have the same opportunity. Probably the most important matter in saving, or “paying yourself first”, is the desire to want to save, accumulate wealth and feel worthy of it. Learn to live from the 90% that is left over. Adapt to spending less than you earn. A strange truth is that people often say: “when I ceased to pay out more than nine-tenths of my earnings, I managed to get along just as well.”

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This cure involves a lot of discipline and helps in personal development. Zimbos, let us learn to save! We are no longer in the Zim dollar era where money was loosing value overnight! Open a savings account with a bank, or even EcoCashSave account!

SECOND CURE: CONTROL YOUR EXPENDITURES

In part one “Start thy purse to fattening” we mentioned that you should save at least 10% of your income. Some people in our StartupBiz Zimbabwe Whatsapp groups were questioning the wisdom of saving when the interest rates are low, or why we should keep money lying idle in the bank. The seven cures are interwoven, and we shall address all those issues in the coming cures. This series will include many parts, follow it. We believe if you APPLY these principles in your life, you will be able to create great wealth for yourself. If you want to change your circumstances, you should do things differently. Ignore these principles, and 10 years from now you may be singing the same song, complaining about your circumstances, wondering why some are wealthy yet you are not having enough to cover your expenses. This is not a get rich quick scheme! It will require patience and discipline!

Often people ask ‘how can I save if I do not earn enough to pay for all my necessary expenses?’ The truth is what each of us call our ‘necessary expenses’, will always grow to equal our income unless we PROTEST to the contrary. Do not confuse necessary expenses with your desires. All of us have many desires that we can never satisfy. Study your living habits, your expenses. Certainly, you will find certain expenses that can be reduced or eliminated. HAVE A WRITTEN BUDGET! Write down how you are going to spend your money before you even earn it. Select those expenses that are necessary and others that are possible through the expenditure of 90% of your income. Cross out the rest and consider them a part of that great multitude of desires that must go unsatisfied. Do not touch the 10% that is increasing your savings!

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What do you desire most? Is it gratification of your daily desires, more clothes, more food, jewellery, better cars, things quickly gone and forgotten? Or is it substantial belongings, properties, businesses and income-bringing investments? If you desire the latter, then your savings will bring you all that! Yes, buy better cars, more clothes, and jewellery: as long as that is possible without spending more than 90% of your income!

THIRD CURE: MAKE YOUR MONEY MULTIPLY

Your bank balance is now increasing, you have disciplined yourself to save 10 % of all that you earn (First cure) . You have controlled your expenditures to protect your growing treasure (Second Cure). You should then consider ways to put your money to work, and to increase it. Money in a bank account is satisfying to own, but earns nothing! The interest rates on savings are negligible in Zimbabwe. The money which you are saving is but a start. The earnings it shall make shall build you fortunes.

A man’s wealth is not in the amount of money he has, but it is the income he builds, the golden stream that continuously flows into his pocket. This is what everyone desires, an income that continues to come, whether you work or travel. The money you have is but a hoard of golden slaves, which should work for you earning more money. As it works for you, its children will also work for you, and its children’s children, until a great income will come from their combined effort. This will create a stream of wealth that will flow constantly to you.

 

Many people complain that they do not have capital to start a business. In this day it is hard to get a loan from a bank if you want to start a business. Save at least 10 % of your income, till you have enough money to start something or to invest somewhere. This is not a get rich quick scheme, it may take long for your savings to be enough for you to start a business, but it’s worth it. Start small, venture into a profitable business, or investment, and your money will multiply. There are many opportunities in Zimbabwe for you to invest in, in various sectors of the economy. Be an entrepreneur and investor. Even if you have a high paying job which is giving you lots of money, your money should not just lay idle in your bank account, put some of it to work. This is the key to true wealth.

FOURTH CURE: GUARD YOUR TREASURE FROM LOSS

Misfortune loves a shining mark. You should guard your money with firmness, otherwise you will lose it. Thus it is wise that we first secure small amounts of money and learn to protect them before God can entrust us with larger amounts of money.

Everyone who has money is tempted by many opportunities where it will seem that he could make large sums of money by investing in the projects. Often friends and relatives will be eagerly entering into those investments/businesses and will be urging you to follow. The first sound principle of investment is security for your capital. Is it wise to be intrigued by larger earnings when your capital may be lost? Will you be able to regain your capital when you need it? Carry a thorough research before you invest your money. Do not be misled by your own desires to make wealthy rapidly. Every investment comes with a risk. Make sure you understand the risks involved before you invest your money, and decide whether the risk is worth it. Do not venture into any business/investment which you do not understand! Have a business plan before you venture into any business! Before you loan money to anyone, assure yourself of his ability to repay, and his reputation for doing so, otherwise you would have given him a present of your hard earned money. Before you venture into any business/investment, consult those who are experienced in investment/business issues. Seek for advice first. Consult those who are already in the business which you want to venture into. Do not make the mistake of venturing into any business just because someone says it’s profitable. Do your research!

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A few years back there were some micro financial institutions which were promising people returns of 15% per month for their capital. Just imagine depositing $10 000, and getting $1 500 every month, “risk free”, without any effort on your part. Ndo kuripwa kugara ka uku!(Being paid for doing nothing!) Zimbos rushed to deposit money with the micro financial institutions. It worked for some time, people were getting the promised returns, and “investing” more money, telling friends and relatives about the big investment opportunity in town. The owners of the financial institutions were buying luxury cars. The institutions were actually pyramid schemes, borrowing from Peter to pay Paul. And as predictable, they collapsed, people lost huge amounts of money, which they were never able to recover. So next time you hear someone promising you GUARANTEED 15% monthly return, run away with your money. Such people/companies usually explain that they are able to offer such high returns because they invest the money in “financial markets”, “forex/binary options” e.t.c. The truth is the forex markets are highly risky, and you are not guaranteed of any return. Many of the companies who promise such high returns will just sit on the money and use the money of new depositors to pay old depositors.

Check out Part 5-7. Check out our collection of business plans.  We also have cash flow projections needed for Zimbabwe farm applications. Like us on Facebook, follow us on Twitter, and subscribe to receive notifications of new posts in your email.

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