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5 Money Mistakes Nigerians Make to Avoid Being Broke

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Business in Nigera

I have known Nigeria all my life and I must say I have learned a lot just by looking at its surroundings – its people and the economy. I have seen men rise in one day due to lotto wins and lose it all the next and I have seen wealthy Nigerian that has been building wealth all through their lives lose all their wealth in one day due to an unwise step.

And usually, when things like this happen, people often think it has spiritual backing like a curse or karma fighting back – which is usually awkward for me. Only a few people try to reason beyond and really find out why such a thing could be common among Nigerians.

I have also seen civil servants work out their lives and after retirement turn to beggars, living each day as it comes, and seen those earning low income able to create wealth within 5 – 10 years. It’s so amazing! With all this, I have noticed that creating wealth in Nigeria has a lot to do with the mentality its people possess.

Even with the bad roads, low power supply, and the high cost of goods and services (inflation). It’s all about the mind first. If you see it, you can be it. Also, I will say with what I have seen so far in Nigeria as regards to creating wealth, there are we 3 types of Nigerians or should I say 3 classes of Nigerians: the illiteratesthe literates, and what I call ‘the moneterates’ (carved out of 2 words money and literates).

The illiterates are basically the citizens that cannot read and write. The population of these people overrides the illiterates and the moneterates altogether. Then we have the literates: These are people that are privileged to go to school, earn some sort of qualification and then get a white-collar job but are not money-wise.

These people could earn in millions and still not build wealth only liabilities. Then we have the moneterates. These are people that are able to increase their money and create wealth and (it does not matter) whether they have a degree or not. Wealthy illiterates and literates fall under this class.

These classes of people takes financial education seriously and they update themselves daily on the new developments. Currently, in Nigeria, the moneterates are at the top of the food chain and it is easy to join them, men, if you can just embrace one thing – financial education.

Part of it is this article I am sharing with you now. So let’s go into it right away, the reason most Nigerians are not rich no matter how they try.

Creating Wealth in Nigeria: 5 Money Mistakes

Mistake No. 1 – Not Saving Enough

It’s so sad that many Nigerians have used the current as an excuse not to save and save enough. Most people know about the pay yourself first rule but they are still lazy about saving. The ‘pay yourself first rule’ that was explained in Robert Kiyosaki’s book – Rich Dad Poor Dad has not just shown to teach discipline but also to change one’s financial status.

Let’s look at it this way. Let’s imagine you have been saving 10% percent of your salary 10 years ago (when you started working). How much do you think you’ll be having in your account now? I can boldly say you will have become a millionaire just by saving – good capital to start any business of your choice or acquire assets.

Note: the rule says 10% but if you cannot catch up with this due to some reasons, you can reduce it to 6% just to start but you might not get your required result.

Mistake No. 2 – Leaving Money in the Bank (till it becomes Valueless)

About some months ago, a friend of mine lost his father to diabetes after a long-term battle with it but what struck me the most was when he told me his father left him a huge treasure in the bank.

On asking him how much this was, he told me it was about 2 million and that he’s been processing the legal documents so as to be able to access the money for him and his family. For this my friend, he was happy his father left him such kind of money in the bank but for me, I was not.

I was not because I knew what that money would have yielded if his dad has invested a huge sum of that money before he died. If my calculations are right his dad has been saving this money for 20 years at least and the money would have done a lot then than now because it had a higher value then.

This is another money mistake Nigerians make. Stuck pilling money and investing, I see this as wasting potential seeds that can grow.

Mistake No. 3 – Not investing wisely

A friend of mine made this mistake last year. She lost over 200,000 naira to this single step. Even after all my advice and warnings. I would have also been in this same shoe but thank God I only invested a little sum. We got an offer that was irresistible.

Now, according to this real estate company that needed our money, they promised us 20% interest in any money we invest every month (monthly investment). And that was how we were tricked. Till today they have not paid her but they paid me because my money was not much with the ROI (Return on Investment).

It was, later on, I heard the company made a huge loss due to a bad investment. I am saying this for you to learn and be aware of where you put your money and to avoid putting all your eggs in one basket. Ignoring this advice might make you lose all you’ve labored for in one day.

You can approach financial advisers for better consulting on this.

Mistake No. 4 – Not Diversifying Wealth

Another money mistake Nigerians make and this is because Nigerians are traditionally trained to be satisfied with what they have. I have once heard of a school owner saying he is satisfied with the money his school (primary) makes so he does not need to build a secondary school. And the sad story about this man is he became bankrupt a few years later.

Maybe this won’t have happened if he had built the secondary school. The 5 million naira alert in your account is never enough and should not be saved for any reason (remember mistake number 3) but rather be invested in another business or buying stock). A well of water is not enough to keep you and your household, consider the dry season.

What if that well dries up? Digging more wells give your family more rest. Examples of people that have seen that have done these are Dangote and Jide the blogger. Dangote went ahead to build a cement factory after dominating the food factory and his now currently building his refinery and Jide the blogger went on to start a tech forum after making enough money from OgbongeBlog.

Watch out for us too!

Mistake No. 5 – Not looking for bigger opportunities

The fifth and last money mistakes Nigerians make.

Bigger opportunities in the sense that they don’t look for other ways they can multiply their wealth – asides from the ones I’ve mentioned above. Like I said in mistake no. 4, no amount of money is ever enough – if you really want to break the jinx of poverty for and your generations to come.

And I wish you really count this serious because this is the only thing that will push not to make mistake no. 5. That’s all. Like I always say it’s not about reading but taking actions. But I still want to hear from you. What are other money mistakes you’ve seen Nigerian make around you?

Conclusion

That’s all in this article. As usual, let me know if I missed any part of this article. Also, let me know if there are topics you want me to write about on the blog or talk about on our YouTube Channel or maybe our podcast.

Finally, share this article with someone you feel might need it.

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Ralph Bamigboye is an Accountant. He is the owner of TheInfoWorth.com, NetWorthVerse.com and Finance Naija YouTube Channel. He has helped many individuals to start their businesses and make money online. How can he help you?

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