More than three years ago, I quit my last corporate job. I wanted to do something on my own. It has turned out to be the most interesting rollercoaster ride ever, though rollercoasters frighten me.
Entrepreneurship has given me the freedom to do what I want. But it has also taught me that I’m directly responsible for my actions. I’ve busted many myths in the process, especially when it comes to money.
I’m no expert on managing money yet. But I’ve developed a better perspective about this essential ‘means to an end’, and continue to learn. I’ve got a better perspective of what it’ll take to secure my family’s and my future.
Here, I’ve shared some debunked myths and lessons learned with you.
1. “It’s Bad to Talk About Money”
Talking about money makes most families queasy. It’s almost a taboo. We’re taught that the only way to earn money is to study hard and get a good job. I grew up learning no different.
But when I interact with young businessmen, their remarkable acumen to understand how money works, stands out.
My neighbor’s son is just in Class XII. Yet, he accurately knows how his father’s pharmacy business functions, where they spend, and how reforms benefit (or hurt) them. Another friend has been making money from home by investing in the stock market for years. A third is a balance-sheet wizard.
When I asked how they developed this skill, everyone had the same answer: their parents talked about money ever since they could remember.
If we project money as a scarce and evil commodity, children grow up thinking likewise. But if children hear discussions about ethical money making ways and contributing to charitable causes during their formative years, their entrepreneurial spirit is stoked. They also grow up to become morally responsible.
My dad (a businessman) tried the same when I was a kid. He would speak on the dining table about earning money. Unfortunately, my mother and I were too timid to understand him. How I wish I could turn back the hands of time.
2. “It’s Not Difficult to Earn Money”
Ever heard someone say, “If I want to, I can make money easily.” Can you believe people actually say that!
One of my ex-bosses often boasted that making money was easy ‘if he wanted to’. And I believed him. I thought that the same would apply to me when I left the corporate world. I couldn’t have been further from the truth.
Is it difficult to earn money? You bet. In today’s cut-throat world, millions are already doing what you want to. The sole differentiator between you and your competition is trust. Unless someone trusts you, they will not part with their money.
People trust their money more than they trust others
This trust takes a lifetime to build, and seconds to get destroyed.
It’s a mammoth task to make good money. Nobody will pay you what you ask for if you cannot improve their lives in some way. If you want to make money, first build trust by giving your audience what it needs.
3. “It’s More Important to Save Money”
Being brought up on the conventional teachings of an Indian mother – study hard, get a good job, work hard – I learned that saving money is the most responsible task of a man.
No doubt, saving money is important. But earning money is even more important. See, saving money won’t protect you from inflation and contingencies. And you will come across challenging circumstances. Life is neither linear nor predictable.
If you focus solely on saving money, your bank balance will dwindle until eventually, you’ll have to run on fumes. Not good.
Instead, pay equal attention to making money. Look at ways to expand your income, regardless of whether you are an employee or an entrepreneur.
For instance, early on in my entrepreneurial journey, I had to pay someone for services rendered. Instead of dipping into my savings, I took up a quick job, completed it in my spare time, and paid the person with those earnings. Impact on savings: Zero!
4. “Buy When You Can Save More”
You try maximizing coupon codes or sale periods when you buy. After all, you hate wasting, right?
But guess what… people who manage their money efficiently are doing one better than you – They’re not buying!
Seeing a ‘sale’ or ‘winning a coupon code’ doesn’t mean that you must ‘take advantage’ of it. What matters is buying what you need, not what you want. By nature, man is an irrational animal. What you want, you almost certainly don’t need. And when you need something, you’re left with little money because you spent it on stuff you could do without.
I committed this mistake often until 2 years ago. Then, I stopped opening emails of e-commerce sites. Now those emails go directly to the Promotions folder, and I’m a happier man at the end of the month.
5. “Put All Your Eggs in One Basket”
About 10 years ago, my dad cracked a large deal. My mother told him to put some money in a Fixed Deposit and take us on a foreign tour with the rest. Instead, he invested in real estate. Mom wasn’t happy, and neither was I. I wanted to see Germany. But dad said, “Paisa paise ko kheechta hai. (Money attracts money.)”
It took me 10 years to truly understand what he meant. If we put all our eggs in one basket, it develops a hole over time. In matters of money, like in life, relying solely on a single strategy often blows up in our faces.
Instead, you must invest in assets and enjoy life with the returns. Capital gains (from property, mutual funds, stocks etc.), dividends, rent and IPR are some examples.
I can’t afford real estate by myself today. But I invest in mutual funds and stocks. I’ve started business process consulting and also want to build online courses. Those returns will not pay off immediately, but will improve my quality of life in years to come.
We are not taught about the value of money when we are children, which is a shame. As we grow older, we look at money as a necessary evil rather than a means to a larger purpose – a free and happy life. I hope that this post spurs you to put your money to good use. In turn, that will let you live a stress-free life in future.
This article originally appeared on LinkedIn.