Pitfall to financial success most Young Nigerians entrepreneurs make
At 20 the average Nigerian is either trying to get into business or probably in the college or university or rather learning one Vocational Skills just to build one’s self up.
A time comes in a man’s life when all he does is to learn, in this learning process mistakes are most times made and are corrected . It’s this trial and error that gives room for improvement. There is a saying that if we don’t make mistakes then there will be no room for growth.
On the other hand there are mistakes that one should not allow to occur in his or her life, because this mistake might be costly and the consequences might be costly although you might have leant your lesson but this comes with a costly price hence its advisable to always avoid such mistakes. One of such mistakes one shouldn’t make is money mistakes and this is the main focus of this writeup.
When there is no sound financial information or knowledge, one will definitely make money or investment mistake that will make one find his or her in a messy financial situation
Here are some of the tips based on our opinion that should guide you whenever you want to make any decision that has to do with money:
- 1 EMOTIONAL SPENDING
- 2 SUBSTITUTING GROWTH FOR MONEY
- 3 “NOT CUTTING A COAT ACCORDING TO ONE’S CLOTH”
- 4 SITTING COMFORTABLY AND HAPPILY IN DEBT
- 5 NOT SAVING UP FOR EMERGENCIES
- 6 NOT HAVING A FINANCIAL PLAN
- 7 Living a wasteful lifestyle
- 8 Living from hand to mouth
- 9 Running your business in absentia
- 10 RELYING ON ONLY ONE SOURCE OF INCOME
I have seen young chaps makes this miserable mistake, they Spend out funds based on emotion. What they do mostly is to spend on consumable goods just to put happiness on their faces rather than spending on investable or rather increasing their net saving.
SUBSTITUTING GROWTH FOR MONEY
In the good old days opportunities abounds in Nigeria, there where few graduates and many available jobs around but nowadays jobs are no where to be found. As a young graduate who is just starting life its best to go for jobs that will add value and chat a path in your career rather than chasing money. This will guarantee you more happiness and more financial rain.
“NOT CUTTING A COAT ACCORDING TO ONE’S CLOTH”
The desire to make use of luxury products is prevalent amongst the youth, the desire to remain in vogue and makes you to spend far way more than you earn will never give room for growth because you will be neck dip into debt.
As long as you can’t afford to leave a luxury lifestyle then its best you get those necessary things that you can afford. Another aspect is the habit of eating out, preparing your food instead of going out to eat, doing your laundry rather than outsourcing them, all this wil help keep your spending low.
SITTING COMFORTABLY AND HAPPILY IN DEBT
Don’t get comfortable compiling debt or sitting on it. Although there are some situations we find our selves that taking loan to solve an immediate problem which is understandable but when you find it very conformable with debt it calls for serious attention. The best thing to do is to venture into side hustle or something else that will be a second source of income
NOT SAVING UP FOR EMERGENCIES
Saving up for emergency is a sign of financial stability. When you save up for an emergency you will hardly be hit hard in any unplanned event that involves spending.
NOT HAVING A FINANCIAL PLAN
Everything in life have to do with plan, same thing goes with income and expenditure. You should have a clear and well planned finance that should cover both the long term and short-term goal
Living a wasteful lifestyle
because of little or no much responsibility youth in their 20’s mostly live beyond their immediate income. They spend carelessly to impress their girlfriends.
Not knowing how to spend very little will not give room for savings and when there is no savings there will be no investment and growth.
Living from hand to mouth
you are always waiting for the next paycheck to arrive to solve your already piled up debt and once you receive that income all goes to settling of debt. This management mistakes will make one not have plans for unforeseen problems that needs urgent attention.
Running your business in absentia
I have seen someone who was based in Canada and tries to set up a bread bakery in Lagos, Nigeria. Guess what? The business folded up after just 4 years.
As an entrepreneur your business needs your presence in the early stage. Depending on family or friends while you are not on ground might not go well, so be on ground because your presence matter a lot. Probably after you have started and better understood the business and its all is now working, then you can now assign a trusted manager to help you when you are not in town.
RELYING ON ONLY ONE SOURCE OF INCOME
The world economy moves in an up and down movement, one time it booms and the next time its in a depressed state hence its very risky to just have only one job that brings all income. Its best to spread your net across like taking different jobs that will serve as multiple sources of income.