Category: Business/Investing Publisher: Holiness A Must Evangelistic Publishing (HAMEP)
ISBN-10: 1257810820
Type: Non-Fiction
Pages: 148
Copyright: June 7, 2011
ISBN-13: 9781257810826
The secrets of making wealth and best from the little resources that one has.
What are the secrets of great people from different fields of life since the beginning of the world? Different things, characters, attitudes, values, practices, philosophies, methods etc were put together by great people to be who they were or are. This book reveals, “It requires practical management to preserve money and retain riches.” This is the secret of great people. Lenuf teaches, “A man that lacks management cannot be rich, and if at all that he becomes rich, he will soon fall from the richness and the riches.” “A big salary does not give riches but management of it does.” Lenuf takes time to teach the following among others: o Money Management o Food & Materials Management o Time Management o Talent Management Now it is your turn to use management to catapult yourself to greatness. Lenuf says, “Management is the ladder that has taken many and is still taking many to the height of prosperity, success, and greatness everyday.” Use this book to begin the building of your greatness now.
Excerpt
WHAT AM I TO MANAGE AND HOW?
There are many things to manage. However, I will limit my teaching to few ones that are very vital for you to keep for you to achieve my definition of management:
Management is all about effectively handling and controlling all things and people that are under you or that you own for your unlimited present and future advantage, hope, and greatness.
You are to manage (1) Money, (2) Foods and Materials, (3) People, (4) Time, (5) Peace, (6) Talents, and (7) Mistake. Let us see them one by one and see how to manage them.
Money Management
I told you earlier that money could finish if it is not manage. This is why fat-salaried workers and high-income workers are not rich. No matter how big an income or a salary a person receives, he can live without being rich all the days of his life. Without management plan for money, one will be wasting it as it comes.
A man once told us his past life. He went to university and obtained his bachelor’s degree. He went further until he finally got his doctorate’s degree.
For profession, he worked as a lecturer in a particular university. His last salary as a lecturer many years ago before his resignation was around $6 per month. With this money, he was living fine and satisfactorily with family. He got a job in a bank and then resigned from lecturing work.
When he got to bank, he began to earn a very big salary compared with lecturing work. His first salary in bank was about $270 per month then. This was around 45 times the one he was earning as a lecturer. Wow! Since $6 was sufficient for him to spend as a lecturer, we should believe that he would save and invest about 80% of the new salary. Did he save this? How much or what percentage did he save?
He told us that for the first six months of working in the bank, he could not save a cent. His taste and expenditure suddenly changed. He was unable to manage the big salary as it was coming to him every month for the first six month. It was until after this time that he sat down and had a rethink that he was going in a wrong way. He thought about it that if he could live fine with small lecturing salary, he should be able to save from the new big banking salary that was now about 45 times of the lecturing salary. He decided that he would work for ten years in bank and resigned to be on his own. He began to save and working towards his financial independence. He did this perfectly. He even had an accounting logbook for all his incomes and expenditures. True to his plan, after ten years of working as a banker, he resigned.
You too can have a rethink today and make a u-turn to begin to manage every amount of money that you receive or earn. How do we do this?
Pay Yourself
In a book called, “The Richest Man in Babylon” by George S. Clason, there is a vital lesson for all to learn. This was the number one secret of the richest man. What is the secret or lesson? The secret says,
A part of all you earn is yours to keep
This is number one secret for anybody that wants to have financial independence. This secret or principle tells you to pay yourself from every amount of money you earn, no matter how small it may be.
Let me ask you a question. Are you a Christian? If yes, do you know about the teaching of paying tithes to God? Have you been paying your tithes to God regularly in the church? If yes, that is a good thing. If you have been recording the tithes that you have paid faithfully for the past ten years, you will have seen that huge amount has been paid, since little drops of water form mighty ocean. If you have been paying yourself as you were paying God, you will have gathered huge amount of money for yourself by now.
Now, it is time you paid tithe to yourself also as you pay tithe to God. The tithe you pay to yourself is the “part of what all you earn,” which “is yours to keep” according to the secret above. What is tithe? A tithe is a levy of one tenth of something. A tithe is an offering of a tenth part of some personal income. In a simple term, a tithe is one tenth of whatever you earn.
Plan what to pay yourself. If your income is relatively big, I expect you to pay yourself multiple tithes. I expect you to pay yourself at least 20% (double tithes) of your fat income. As I banker, I paid myself more than that. Up to date after leaving bank, I pay myself more than 20%. Therefore, make it a duty to pay yourself. No matter how small your income may be, do not pay yourself less than 10% (i.e. a tithe).
When should you pay yourself? Pay yourself before you spend any amount from the income. Remove God’s tithe from it first, followed by your own tithe(s), then you can now spend from the remaining one. The one you pay yourself, put it aside and never spend it for any need of yours or of others.
Paying yourself first is the first step to wealth building. You must do this consistently for every amount of money you earn or receive, whether big or small. Turn yourself to a god that must always collect a tithe or tithes from all you receive or earn for the rest of your life. Do this faithfully.
Now, what should you do with the amount you pay yourself? Is it for eating or drinking? Save it!
Save
Save it in a secure place. The most secure place to save money is bank. I advise you to open a special savings account for this. Do not save it with your normal money in the same bank account.
As it is a taboo for you to spend God’s tithe of your earning under your custody, so also see it as a taboo for you to touch the tithes you pay yourself for any personal usage. What does this statement mean to you? It tells you to be disciplined. A good manager is meant to be a disciple person; if you lack discipline, you can never be a good manager. If you do not manage your own affairs well, nobody will help you to manage it.
After opening the new savings account for saving your personal tithes, constantly deposit into it each new amount of money you pay yourself.
After that what is next? As the money builds up, what should be done with it? Should it be used to buy a car or build a house? Enslave your savings to work for you. Invest!
Invest
Enslave your savings to work for you. You have been serving money as a modern slave for a very long time; it is high time you began to enslave money in counterattack. How long will you serve as a slave? Do you want to be a slave for forever? Remember what I said earlier about modern slavery. Nobody in the world, not even government, can abolish modern slavery. To be delivered from modern slavery, you must consciously deliver yourself.
In the world, if a leader embezzles, he is known to have committed a national financial crime. That is still a relatively small compared with the one against oneself. When you keep on serving money while money is to be working for you, you are committing a financial crime against yourself. The greatest financial crime that one can commit against oneself is to work for money without gaining freedom over money and make the money work for oneself.
You must enslave money and make it work for you. As your saving builds up, take it and make it work for you by investing it. you can choose any type of investment that you prefer. You can use variety of them. There are many types of investments, but I will group them into two simple classes here.
High risk investment
Low or no risk investment
Your return (profit) depends on your risk. The higher the risk you take, the higher the return you will get, and vice versa. According to the name, high-risk investments are very risking if one does not calculate it well. This is why a broker or advisor is needed here. The beautiful thing in high-risk investment is that the total amount you invest can suddenly multiply to double or more. Good examples of high-risk investments are shares, real estates, etc. The return here is not fixed; it can be zero, negative, or positive at any particular time. By zero, I mean that the price may not change. By negative return, I mean that the price may fall from the amount that you bought it. This is what may it high-risk type of investments.
Another beautiful thing here is that if the selling price falls or remains the same as the buying price for some time, it must definitely go up after some time to your favour. For instance, using real estate, the price of land may not change within a year. However, it must definitely go up within a couple of years; at that time, the price may have been doubled or tripled. Such thing also happens in shares market depending on how profitably the companies that own the shares are performing.
Low-risk investments, mostly, have a fixed rate of return that you should have at the end of a particular period. This is called “play-safe” investment. No matter how worse the case may be, at the end of the tenor of the investment, you will definitely get your agreed return determined from the rate. With this, this types of investments have no risk at all. This is what makes it sweet for some people. What can bring low risk into it is that if the financial or investment company collapses. This case is rare. Therefore, this is a very safe way of investing. Good examples here are time deposit, unit funds, mutual fund, treasury bills, commercial papers, certificate of deposit etc. The disadvantage here is that the return is very small. However, if the money you invest here is big, the return will look big.
For instance, let us say that your friend takes $500 to Barclays Bank and uses it for fixed deposit for a month at the rate of 12% per annum, while you fix $1,000,000 for a month at the same rate and tenure. At the end of the month, your friend will receive around $5 as his return from the investment while you will receive around $10,000. This is a good investment with little or no risk at all. If the principal of your investment is not big, the return will look small. That is okay, for as long as the money is yielding something for you every month. At the end of the month, the $500 of your friend has become $505. Gradually, this little drop will later become mighty ocean after years. Remember that more money from his personal tithe in his new savings account will be added to it periodically while interest will also be adding to it. What a secret of wealth is this?
The joy and beautiful thing in low or no risk investments is that you will always have a return for your investment at the end of the tenure of the investment.
Never Despise a Small Beginning & a Small Gain
I have encountered many people who were discouraged by these small interests or returns when they used small amount of money for fixed deposit in our bank. They failed to know that their returns depended on their principals (money that was invested), provided all other parameters (rate and tenure) remained the same. Like my example above, I used the same rate and tenure for both of them; the only difference was the principal amounts. One person gained $5, while the other person gained $10,000. The more your principal, the more your interest or return will be. Do not be discouraged, because at a start your principal amount and consequently your interest will be definitely small, since you are just starting. Here is the word of advice for you from God,
For who hath despised the day of small things?
Though thy beginning was small, yet thy latter end should greatly increase.
The collection of small and insignificant gains makes one rich over a period. This is how banks and other multinational and multi-billion companies of the world make their money. Before I started working in bank, I once asked my uncle how banks made their profits despite that they pay interest to customers that deposit money with them. My uncle made me to know that one of the sources of their profits was COT. COT is an acronym for Commission on Turnover. The bank gets commission (the COT) from current accounts withdrawals. When my uncle explained it, the gain was too small in my sight. I wondered how that could be enough to pay the fat salaries that their staff earned every month.
When I later got job in bank, I discovered the rate of the COT. The rate in my bank was 5 per mil, that is, 5 per 1,000. What do this mean? Every 1,000 units of money that a customer withdraws from his current account, the bank gets a commission of 5 units. If a customer withdraws $10 from his current account, the bank gets 5 cents. If a customer withdraws $1,000, the bank gets COT of $5.
Look at this well. What would 5 cents or $5 do for a bank? Can this pay salary of any staff members. Bear in mind that this COT of small, small gains is one of the sources through which banks generate their great wealth.
Do you know that these insignificant COT deductions paid our fat salaries every month? How did that happen? Remember that little drops of water make a mighty ocean. The numerous 5 cents from all the customers that withdrew money from their current accounts gradually built up to be very huge amount of money. Let us say that somebody came to withdraw $1,000, another one withdrew $15,000, another withdrew $100, and another withdrew $100, 000, and so on. The COT would be $5, $75, 50 cents, and $500 respectively. The following day, other groups of people came to withdraw different amounts and so on to the end of the month. Let us say that at the end of the month, the summed amount that all the customers withdrew from their current accounts was $15,000,000. Now, see the profits that the bank got from COT only for the month:
COT = $1,000,000 x 5/1000 = $75,000
Wow! See what the accumulation of 5 cents out of every $10 withdrew has turned to within a month. Truly, little drops of water make a mighty ocean. Apart from Commission on Turnover (COT), the bank makes money from other different sources, but one thing is common to them all: they are all little drops of gains or commissions.
The same thing applies in investment, especially in low risk investment; your return will be very small at the beginning because your principal is small. Like the example above, you only received around $5 returns in a month for $500 that you invested. However, if you take it with joy and continue add more principal from your earning while the new return is adding to it every month, before long, you will be a great man or woman of wealth. God’s word above asks, “For who hath despised the day of small things.” Please, never despise small things and small beginning. Those people that walked to the end of one thousand kilometres journey started with a step; gradually they covered the entire great distance. This is why the word of God above encourages, “Though thy beginning was small, yet thy latter end should greatly increase.”
This morning, I was listening to a minister on radio. He said that one man used sixty pounds (£60) to start investment in a particular country many years ago but today he was greatly wealthy. Today, the man has factories that produce consumer goods.
If you start small with contentment, before long you will join the millionaire or billionaire class of the world.
Do you know that the wealth of the richest men in the world is from little, little cents and dollar? Now, have a look at the 2010 report of the first 10 richest men in the world.
One thing is common to them all; they are all investors. The second common thing to them all is that, that wealth can be traced down to little, little cents. These cents combined to form several billions of dollars. This is a lesson. For instance, the major source of the wealth of the richest man there is telecom. His wealth is got from every call that each person of his subscribers makes. Let us assume that a phone call costs 5 cents per minute. Let us say that his profit is 1 cent from each minute call.
Now, imagine, how can I cent makes a man the richest in the world. Remember again that little drops of water form a mighty ocean. Let us assume that he has 110 millions subscribers with average of 10 minutes calls per person in a day. What would be his profit for a day?
Profit = 110,000,000 x 10 x 1cent
= 1,100,000,000 cents = $11,000,000
See what 1 cent has turned to; it has become $11 million at the end of the day. Now, if this continues for a year, this will be $4.015 billion. Wow! The smallest gain that is not despised will end up becoming a great overwhelming wealth. This is the magic of wealth building. The report tells us that his net worth goes up $18.5 billion in a year. This man did not jump to the position of the richest man in a day or a year. In 1990s, according to the report, he pounced on privatization of Mexico’s national telephone company. Do you know how long it took him from 1990s to 2010 before he finally became the richest man in the world? It took him some time before he arrived there.
The number eight richest man in world from the table above did something that I like well. He vowed to become the world’s richest man. Though he was the number eight in the list, he believed that gradually he would rise to the position of the first. Despite the net worth of the richest man ($53.5 billion) is approximately double of his ($ 27 billion), he believed in himself that his little, little cents will definitely build up one day to make him the richest man in the world. Truly, he is currently growing very fast. He was the year’s biggest gainer; he added $19.5 billion to his personal balance sheet in the year.
Look at all the ten richest men. Little, little cents make them the richest they are today. Take Bill Gates (Microsoft), the second richest man and Lawrence Ellison, the sixth richest man (Oracle) for examples. How much do they gain from each copy of software they sell? The small, small gains from several millions of people that buy their software build up to be great wealth.
Look at the number nine and number ten richest men in the table above. What are their major sources of wealth? They are nothing but fashion retail and supermarkets respectively. How much does he gain from each fashion material? How much does the other person gain from supermarkets products? These little, little gains end up to be multi billions for them.
Do you know that you can join the class of the richest? How? You must start from somewhere, no matter how small it may be. Secondly, you must despise the little gains and returns.
Now, invest the savings of personal tithes. Choose any type of the investment that you want, whether high-risk ones or low-risk ones. In all investments, there are always profits with time.
Another way of investing your money is to use it to start business of your own and then build up the business to national and international standards. For example, Karl Albrecht, the number ten richest man with net worth of $23.5 billion, went into grocery supermarkets. Today, he has 1,000 stores in U.S. across 29 states. He has estimated sales of $37 billion.
You can sit down and decide what you can start and do profitably with your savings. Then grow it to internationally standards and fame. The world is waiting to hear your name of greatness; you can spell out your name to the world through your wise investments and business.
Having a good stockbroker, trading in shares (a high-risk investment) can quickly multiply your wealth. The third richest man was a heavy investor in shares. Trading in shares is one of the investments I like most.
Another way of investing your money is to invest into already existing companies. You can have a buyout of a company. These ten people above all invested into other companies. However, to do this, you need big money. How do you get the big money? You must start from other types of investment first. As your wealth increases, you will proceed to this.
Stand with Multiple Legs on Multiple Solid Grounds
Someone once said that a fool says that you should put your eggs in many baskets, but a wise man says that you should put your eggs in one basket and watch the basket. By the statement, he is right. This is truly a wise thing. However, the statement is not profitable in all situations.
In investments, you do not need to put your eggs in one basket, but in many baskets. Those people that were seriously affected by the global economic meltdown know what I am talking about. Many put their investment eggs in one basket; global economic recession later hit the basket and broke larger percentage of the eggs. It greatly affected capital market. I was one of the victims; I lost a lot in shares.
The economic recession affected high-risk investments than low-risk ones. In fact, many low-risk investments were not affected in value at all. For instance, people that used their money for time deposit in banks at given rates for particular tenures before the meltdown began still had their principals and their interests intact with the banks during the recession. On the other hand, those that bought shares before the meltdown began could not recover all their capitals (principals) when the recessions had started. It was not even advisable for them to sell them. Many are just waiting for the price to rise again to the price they bought the shares. For instance, I bought a large quantity of a particular stock at the rate of 42.4 cents per unit before the meltdown. During the meltdown, the price of the shares per unit dropped to around 5.3 cent. This is one eighth (1/8) of the amount I bought them.
Now, let us imagine that somebody put all his investments in shares before the recession. Let us assume that he spent $8 billion to buy the shares at the price I bought mine (i.e. 42.4 cents) three months before the recession. During the recession, the price has dropped to 5.3 cents. If he should sell the shares now, how much would he sell them? He would only sell them for $1 billion. What a loss! A loss of $7 billion. Remember that he does not have investments in any other area. This could lead him to have heart attack, from heart attack to death. This is why you must not put your investment eggs in one basket.
Coming to the ten richest men in the table above, you see that they stand with multiple legs; they do not put their eggs in one baskets. Apart from their major sources of wealth, they have other many investments. If one or some of the investments fail, the remaining ones will sustain them. It is no wonder that Solomon the wise says, “Two are better than one; because they have a good reward for their labour. For if they fall, the one will lift up his fellow: but woe to him that is alone when he falleth; for he hath not another to help him up.”
Let us beam our light to these ten richest men. Concerning, Bill Gates, the report says, “More than 60% of fortune held outside Microsoft; investments include Four Seasons hotels, Televisa, Auto Nation.” Can you see that his legs were not only in Microsoft? If Microsoft fell today, he would still stand without falling with it.
Concerning Warren Buffett, the third richest, the report says, “Shrewdly invested $5 billion in Goldman Sachs and $3 billion in General Electric amid 2008 market collapse. Recently acquired railroad giant Burlington Northern Santa Fe for $26 billion.”
Concerning Lawrence Ellison, the sixth richest, he was not only standing in Oracle Corporation (Database company). The report reveals, “Database giant has bought 57 companies in the past five years. Completed $7.4 billion buyout of Sun Microsystems in January; acquired BEA Systems for $8.5 billion in 2008.”
All these men are wise managers. This is why they will always be high. It requires practical management to preserve money and retain riches. I told you that wealth is only meant for wise managers. I repeat,
Riches are only meant for those that can manage it. Riches are only for practical manager.
A man that lacks management cannot be rich, and if at all that he becomes rich, he will soon fall from the richness and the riches.
As a good manager of money and investments, diversify your investments as they begin to increase. Let your legs be in multiple investments; stand with multiple legs for you not to fall if one of the foundations collapses. Cast your seeds upon many waters. Do a mix of investments. Combine low-risk with high-risk investments.
Keep on Moving Higher
One thing amazes me in the growth of the first ten richest men above; they are all growing higher in net worth.
This is what I expect from you. Your net worth must be growing – monthly and yearly. Your principal and capital must not go down; returns must be added to it periodically. You must also be adding new capital to it from the savings from your earning/income as you were instructed under subheading “Pay Yourself.” This consistent growth will soon land you in the class of the wealthy. Never be stagnant; keep on moving higher in your net worth. Martin Luther King Jr advises,
“If you cannot fly, RUN;
If you cannot run, WALK;
If you cannot walk, then CRAWL;
By ALL MEANS, KEEP MOVING.”
Never Eat the Eggs yet; Let them also Reproduce
This is another area of management. Let me ask you, “What should you do to the returns/interests/profits from your investments?” To buy a car from it? No! you must not eat them. It is good to eat an egg from one’s hen, but it is better if one allows it to harsh and become a ‘mother’ hen to reproduce many other hens that will combine to lay surplus eggs before one begins to eat; preserving the one egg will give you uncountable eggs to eat in the future.
Every return or profit that comes from your investments must be added or reinvested into your investments. This is what we make your investment to keep on growing higher. This is not the time to celebrate yet; postpone celebration to the time that you have fully made it. Keep on building your wealth. If you need to spend any money let it be from your normal income or earning; do not eat from your investment yet.
Expand Your Investments with Extra Savings
If you want to fasten your wealth, you need to invest more than the personal tithes that you pay yourself. Bring in more other savings.
Let me assume your income, earning, or salary is $2,000 every month. God’s tithe from it is $200. If you pay yourself a tithe from it, the personal tithe will be $200. The remaining balance for your spending and upkeep will be $1,600. That is cool! From this, you will feed yourself and your family; pay utility bills, cater for transportation, etc. Remember that you can further manage this money by cutting down your expenses and still have a left over. Keep this left over into another account as your secondary savings account. Do this every month. Within six months to one year, you might have saved plenty money in the secondary or extra saving account.
The next thing is to take the money periodically and invest it. By this, you are furiously building up your net worth. As this continues, you are becoming richer.
My Advice to Fat-salaried Workers
I was once an employee with fat salary in a multinational bank. I therefore know the problem of the fat-salaried employees. I need to advise you. Why do I need to advise you? I discovered that you are not rich yet despite your big salary. You know what I am saying is true. Before I continue my advice, let me give you a fact about fat-salary earning staff:
A fat-salaried worker is not far from wealth, though comfortable but may not eventually enter into wealth palace before his death, except he prudently enslaves a part of his earned fat salary to work for him.
As a fat-salaried worker, you are not rich yet; you are only more comfortable than many of your equals in the society. My definition of being rich is that when you have at least one million dollars assets or investments that yield returns for you every
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