How to Inflation-Proof your Finance

There is no need to sugarcoat it.

The Inflation we are experiencing right now is burning a hole in people’s pockets.

The cost of the basic necessities has more than tripled and life has become more difficult for the average Nigerian.

This information I am about to share with you could not come at a better time.

You cannot change the economic policies of the country but you can protect your pocket and financial security.

Here is how to inflation-proof your finances:

Understand how Money works

If you want to get better at any topic, you need to have a basic understanding about how it works and money is no different.

Money is the result of value exchange.

Value in this case is anything someone is willing to pay for. It could be a Car, shoe or even a pet rock (there is a rock selling for $30 on Amazon…crazy!)

If you want to make money, you have to be willing to solve a pressing problem for people who have the money to pay for it.

The bigger the problem you solve, the more money you can make.

Plug the leaky holes

Cashflow is basically the flow of money in (income) and out (expense) over a period of time.

Positive cashflow is when the income is more than the expense.

Negative cashflow is when the expense is more than the income.

Ideally, you want to be cashflow positive but with the higher cost of living, you are spending more money to purchase the basic necessities (Food, Fuel, Rent etc.)

So what can you do?

You need to pay more attention to where your money is going.

Asides the basic necessities, there are non-essential expenses your money goes to.

Cutting these items out will reduce your monthly expenses and leaving you with more money in your bank account to invest.

Increase your Income

After cutting out non-essential expenses,

The next thing you want to do is increase your income.

Why?

With the raising inflation, it is just a matter of time before your income is no longer enough to purchase the essentials.

You cannot save your way out of this situation.

You have to increase your income.

So what do you do?

Remember the first point about money and how money is a reward for creating value?

Look around you, what value can you provide?

On page 4 of this edition of SuccessDigest, I write about how you can make money selling products with the WhatsApp on your phone.

Read it and implement the steps as soon as you can.

It is important you build a sustainable positive cash flow before thinking about taking on any long term investment opportunities.

Cash is king and having access to liquid cash at all times will not only keep your head above the waters of inflation but it will also place you in the right position to grab investment opportunities when they arise.

Send your money on Errand

Speaking of investment opportunities,

You have to understand that to build wealth,

You need to separate your time from earning power meaning you have to be able to earn money without directly investing your time to earn it.

As a salary earner,

You are paid for your skill and time working on your employer’s projects.

As a small business owner,

You invest your time in ensuring your business is running.

If you miss work, you will not earn money.

Sending your money on an errand (Investment) allows you to get a Return on Investment (ROI) as a reward for the money you invest.

Investment is an interesting topic that I particularly enjoy and if you would like to read more about investment opportunities that will fetch you a pretty penny at the end of the day,

Why don’t you shoot me an email by clicking here.

One last thing,

Everything I have written about here will mean nothing if you do not have the discipline to follow through.

A plan is only as good as the execution and this is no different but if you stick to these 4 steps,

Your future self will thank you for it.

Take care.