I was an employee before becoming an entrepreneur. That’s how I came to understand how many people think when it comes to money. They treat it like a security blanket. They want it with them, within sight, all the time.
The problem is that anything you set aside doesn’t grow. And that’s not just money. That’s for everything. If you have a skill or a talent and you don’t do anything with it, it doesn’t improve. Same thing is true with money. If you set it aside and don’t do anything with it, it won’t grow.
I had to get out of that thinking, out of that frame of mind because I didn’t want to work for money anymore. I want money to work for me.
So here are some of the mistakes I and some of my friends made when it comes to money.
#1. Cash. Cash. Cash.
I put all my savings in a savings account. Yes, I do need some but having the majority of my money in a cash account was and still is a big mistake because I was guaranteeing myself loss.
Inflation, people! The value of our money depreciates over time and, no, it is not by 2% as the government wants to make us believe.
So, unless I am saving millions a month, I will never catch up to inflation. Whenever I thought I had saved enough for a downpayment of a house, it goes up.
Cash is trash. I knew I had to make my money make me more money. And a 1% interest rate in a savings account won’t do it.
I needed to invest. With investments, money makes money. Stocks. Businesses. ETFs. retirement funds. And I needed to act fast.
#2. Wrong type of diversification
I already knew early on I needed to diversify my source of income. But I did it the wrong way.
I decided to take multiple jobs. There is nothing wrong with that if that is the path you consciously choose, but that wasn’t what I wanted. I didn’t want to have multiple jobs. I wanted to make more money and having multiple jobs could do that but not at the level I wanted.
I realized that I didn’t want to continue working 3 jobs the rest of my life and instead of getting multiple jobs, I needed to start investing in assets that would not require 4 hours of my day.
#3. Not taking risks
I am afraid of risks. I am afraid of losing the money I invested but I don’t think there is anyone successful who has never taken risks.
The key is in recognizing the fact that if I don’t take risks, continue saving money in the bank, I am guaranteeing myself loss. At least if I invest, I have a chance of getting to where I want to be financially.
#4. Not seeking advice
I am lucky to have come from a family of entrepreneurs. My dad was an entrepreneur and so was my grandfather. I had some guidance and they exposed me to their businesses early on. It’s good they were very successful too.
If I didn’t have them, I still would have sought advice from friends, mentors, and professional financial advisors.
Because I didn’t know everything, I still don’t and having someone with the expertise increases my chances of success.
#5. I learned from my failures
I did fail. Several times. And yes, it was frustrating but instead of getting defeated, I learned. I gained more experience and I moved on to try again.
That’s 5 of the many mistakes I made and learned from and I hope that will help you.
Look, you don’t have to be a serial entrepreneur. You can go on with your 8-5, especially if you enjoy it. But don’t forget that investing is important. You need to make your money work for you.