Make sense of your finances

The reality is that money comes and goes; more important is how you handle your funds. Long ago, when I learned how money works; the rule of 72 was an eye opener. Rule 72 is an easy way to determine how long it takes your funds to double; it is based on an annual interest rate divided by 72, which will be equal to the number of years it takes to see any real overtime growth. Such as, say, a 1K investment with an annual return of 1.0%, which is more than what your bank is currently paying; it would take 72 years to double your funds. (72/1 = 72 years). The money will grow to only 2K over a period of 72 years.

Now, take the same 1K, properly invested in the financial markets of 10%, which was the historical average, it will take 7.2 years to double your funds. So, during this 72-year period, you will have 10 doubling periods, or $ 955,594, just under $ 1 million; not bad for 1K. Have you ever wondered why local and national banks have a plush atmosphere and marble floors to walk on? We need to learn how to manage our finances; budgeting, spending and saving; are part of being reasonably responsible managers.

Over the years, many of us have made mistakes with our money; whether through a loan, poor financial management, debt burial; or by snatching from various financial advisers or fraudsters. In order to make sense of our finances, we need discipline to do the right thing and to refrain from frivolous meaningless bad habits. In the last few weeks, with this coronary virus pandemic, I’ve seen people spend their stupidly hard-earned money; buying more than he or she would normally need on a given day. The world is not coming to an end. Distribute your funds on the table and take what you need to connect the two ends. A crisis should not be needed to get our attention with our finances, it should be a process of about a year on how to manage money properly.

During times like these, it grabs our attention to slow down and rethink things before acting on impulse. Also, this is another way God draws our attention; for those of us who believe that He is the true and living God. He controls this whole situation and has the whole world in his hands. The goal of each person, when he or she learns how to manage their finances, should include, but is not limited to: the purchase of life insurance and health insurance products, there are legitimate sources of income through diversification of multiple assets, own real estate, have a basic understanding of how to buy low and sell high, or at least get an equivalent; or make a profit with any business venture you can engage in. Last but not least, be advised by reliable professional financial advisers “to help manage large financial portfolios”.

The truth behind money is to know how to manage it properly and to live according to our abilities and to be calm in mind, soul and spirit. We need to learn from our mistakes and mistakes and be a blessing to others who may lack both the finances and the knowledge of how to have more than enough. Share your education with others to help them change their thinking from thinking to thinking of poverty to help increase their wealth accordingly. It’s time to let your money start working for you; instead of working for money!

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