By Dr Renate Volpe
Money is the root of all evil!
Money makes the world go around!
These are both popular sayings.
I prefer the one I heard recently:
Money magnifies who you are.
The reality is that money influences most decisions in our lives. Where we live, how we dress, where we shop, whether we travel, where we socialize, what we drive, who we marry and befriend, whether we remain in South Africa or choose to emigrate.
Childhood influencers.
How we relate to money is influenced by our beliefs and experiences around money. If you explore your first experience as a young child around money, and you determine whether this was a positive or negative experience, you will inevitably find a correlation between this experience and how you currently manage your money on a daily basis. Are you a magician and wise around money, are you miserly and controlling , or perhaps you are a fool around money, take foolish risks, and believe that luck will surely, one day, make you a millionaire.
The business of business is money.
As a leadership coach I am often approached by entrepreneurs who wonder why their businesses are not performing as well as they could, or should be.
- One of the prime causes is that such people often fail to align the services they render with the amount of money they charge for their time and their effort. For example, they may deliver three weeks of time for a petty amount of money to a demanding customer. When they stop and assess their profit margins, they find that by the time they have covered their infrastructure costs, (never mind charging for their own competence,) it is costing them to service the customer.
- The simple rule here is to align the amount of effort, time, costs and resources required by the project, with the money charged out to the customer.
In small business one of the prime reasons for business dissolution is the failure to bill, and to collect outstanding debt timeously.
- Small insights: like understanding that the moment you invoice a customer you become liable for the vat irrespective of whether that customer pays you, or cancels on you.
- Having cancellation clauses in your service agreement is critical.
- Resist the temptation of using vat and tax monies, on daily living or business prospects.
- My advice is to have a separate account into which you put vat monies so that it is available when the time comes to pay.
- Never presume that a deal is closed prior to physically seeing the money in the bank. Even when a deal is signed it may be reneged on.
Do not expect people to look after your money, even if you pay them to do so.
- Do not trust your investment broker blindly.
- Educate yourself; do not assume that your bookkeeper or your accountant or auditor is effective and efficient.
- Manage the people that manage your money. Ask educated questions, question actions, demand sensible logical relevant explanations. You will save yourself large amounts of money by involving yourself in your own affairs.
- Remain informed about service related costs, read the small print and beware of escalating rates of long term providers.
I recall a friend telling us how jealous he was of our apartment saying that he was only a doctor and did not earn much money. I reminded him that he and his wife had traveled the world and been on continuous expensive vacations for the last ten years, whilst we had chosen to put our money into bricks and mortar. He was truly surprised by his own blindness as he acknowledged my comment.
A little can be more than enough.
There appears to be no correlation between making a lot of money and having enough. As I observe how people are with money I have noticed that often people who make a lot of money, spend it like water and sometimes have little or nothing in the end. Those who earn steadily, and are good with their money, seem to live well enough, are self reliant and have little or no debt.
As with everything in life the answers are not found in extremes but in an attitude and approach of moderation.
Money secrets. Its’ never about all or nothing, in essence you need:
- Some money for today
- Some money for tomorrow
- Some money to play.
