The new rules of money

nigeria currency naira

What One Naira could buy ten years ago is not what it can purchase today. One useful analysis we can make is to compare the exchange rate of the Naira to the dollar for the last ten years. In 2005 the Naira exchanged for around N130 to the Dollar; today it is currently valued at around N210, a loss in value of around sixty-two percent.

While the Naira’s value has depleted significantly incomes have not gone up substantially in the last ten years for most people. This means that no matter the increases earned in the last decade it cannot compare to the losses made. In actual fact you need to earn at today’s value at least sixty-two percent more in order to afford what that same amount could purchase ten years ago.

Thus the impact of inflation and eroding currency values cannot be overlooked. How is one going to be able to create wealth while the value of money is constantly declining? The only way is by playing by a different set of rules – the new rules of money.

Now the credit goes to Robert Kiyosaki, author of the Rich Dad, Poor Dad book series for the term, “The New Rules of Money.” In his bestselling book, “Rich Dad’s Conspiracy of the Rich: The Eight New Rules of Money,”Kiyosaki posits that economic systems of the world equips and empowers the rich to continue getting richer, at the expense of the poor. He advocates a series of eight new rules, to help the poor or less advantaged build their way to wealth.

Reliance on existing “old” rules like getting a job, saving, diversifying your investment portfolio, avoiding debt, owning your own home can only take one so far in these days of plunging currency values and government bailouts.The new rules are:

Money is Knowledge

These days one does not require money to make money, rather you require knowledge. You can tap into several business opportunities that are available without having to put down any capital of your own and still make a reasonable return. We live in the knowledge economy where knowing the next move or policy, and even consumer trends could translate to wealth and fortune.We do not need money to make money. As long as we have the right knowledge, we can make money with it. In other words, we should improve our financial literacy.

Learn how to use debt

We need to differentiate between good debt and bad debt. Good debt puts money in our pockets and bad debt takes money away from us. Hence, taking up good debts is a form of leverage, putting more money into our pockets. At the same time, we must avoid bad debts. Our bad debts make other people richer.Debt is not evil.

Learn to control Cash flow

In order to build wealth you need to know how to control your personal cash flow. Wealth seekers must understand the flow of cash in an economy with regards to where jobs are created, where workers are moving to, and which asset are they exchanging money for – stocks, bonds etc.?

Prepare for bad times and you will only know good times

Bad times will come from time to time. This is certain; however it makes good sense to prepare for them by taking steps to come up with several causes of action if they arise. There is power in preparation.  If we are able to deal with financial crisis, we will be very profitable in good times.

The Need for Speed

We need to accelerate the amount of money earned. The rate of money earned should follow an exponential scale instead of a linear relationship. In other words, we should avoid getting paid by time, exchanging an hour for a fixed amount of money. We only have 24 hours per day. We should have the type of income that is able to increase in folds so that money can flow to us as quickly as possible. We should make money even while asleep.

Learn the Language of Money

Kiyosaki says, “Money begins with words, and words are free.” Our thinking shapes our behaviour, and our behaviour and responses determine our results. To change the results, we need to change the root, which is our thinking. The rich think differently from the average and the poor. The rich thinks in abundance while the average and the poor think in lack.

Life is a team sport. Choose your team carefully

People are good in different things. We need to tap into resources of the experts to help us in our life and businesses. We need lawyers, accountants, financial advisers and more. It is important to assemble a team of trustworthy experts we can call upon when we need them.

Since Money is becoming worth less and less learn to print your own

Money is worth less due to inflation. We must grow our money faster than the rate of inflation. One way is to “print” money like the banks. Banks collect interest by lending our money. We should also use other people’s money to invest and profit from the capital.

The new rules of money point us to a new approach or direction we need to carefully consider in order to build wealth. We cannot continue to build wealth using the same old methods and techniques, especially with the rapid changes occurring. I wholeheartedly recommend and endorse the application of several, or all of these rules for anyone who desires wealth in the new economy.

Source: Kennedy- is your one-stop online news magazine blog. We report credible information as they happen. Follow us on Facebook and Twitter to get Latest Information.

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