The year 2021 promises to be a year to end all trauma, and even though we don’t know what it holds for us, we can only be hopeful.
Making new year resolutions comes with dotting your I’s and crossing your T’s.
A lot of us are trying so hard to fix the mistakes of the past and pave the way for a better future. It seems 2020 may have given us a much-needed wake-up call.
But while we are at it, we should be careful too. You must avoid these financial mistakes in 2021 if you want to change the situation of things around you:
1.PONZI SCHEMES: Avoid them! Run from them like your life depended on it.
In an attempt to make financial scale-ups, avoid the “make money in an instant” or “get-rich-quick” investments. They aren’t worth a cent.
In fact, it is the worst financial mistake you can make this year.
In times of economic crises, Ponzi schemes become the order of the day, and a lot of people — who are gullible and lack enough knowledge — fall victim to scam.
Most people begin to look for easier and faster ways for their income to catch up with the price inflation and lose their patience with the gradual and process of investments.
A good, profitable investment is not instantaneous in its character. Just like seeds, investments take time to grow and yield. Patience is key.
When you hear an offer too good to be true, avoid them.
2.STOP THE ASSUMPTIONS: As much as we would like the economy to get better, there are no factual indicators to guarantee such an outcome.
If you actually want to do well financially at any point in time, assume the worst!
Assuming the worst prepares you for — the worst.
Hope is not a strategy for financial freedom.
The state of the Nigerian economy at the moment doesn’t look anywhere near promising.
First of all, the Nigerian economy is a consumer and import-dependent one, and with a debt portfolio scaling over ₦35trn, a promising economy is far from home.
Assuming things will get better is one of the financial mistakes you should avoid this year.
3.NOT SPENDING ON MARKETING ADS: If you are running a business, do not make this mistake.
The world we now know is going digital and a lot of businesses are investing in ways they can become borderless.
In as much as traditional ads have a role to play, they are limited most of the time.
If you want to put your products in more hands or get more requests for your services, spend more on online advertising.
Trust me, it pays, and you have more control of the outcome as compared to traditional ads.
This is not the time to cut back on marketing, this is the time to take advantage of it.
4.STOP KEEPING CASH: I don’t need to tell you that the Naira as we speak is taking a beating, and its value is being lost daily.
Keeping your money will not help you hedge the devaluation storm. You’ll sink instead.
With inflation still on the rise, you’re losing the relative purchasing power of the cash you keep, that isn’t working for you.
No one is saying don’t have cash handy in case of emergencies but have a significant portion of your income in savings and investments that would give you significant returns for the long term (not Ponzi platforms).
Make your income work for you by minimizing the amount of cash you keep this year.
Real estate, assets, and commodities are investments that can boost the purchasing power of your cash.
If you are not knowledgeable about these investments, you should get yourself a finance expert to put you through, so you don’t lose your cash in an attempt to save it.
5.DON’T BE BUDGETLESS: One basic necessity for financial freedom is having a financial plan.
What you spend your money on and how you spend it is very crucial.
If you do not have a budget for your projects or even on your income, the chance that there would be a budget overrun is very high.
Everything should be planned, including your giving. Giving should not be an impulsive act, but should be deliberate and well thought out too.
Having no budget is one of the financial mistakes to avoid in 2021.
6.DO NOT IGNORE PERSONAL DEVELOPMENT: One of the financial mistakes a lot of people make is to ignore personal development.
Personal development is a key factor to help you weather the storm. If you want to be successful and stay relevant in today’s rapidly evolving world, get yourself an education.
It is an investment in itself and boasts of its long-term benefits.
This is not the time to hoard money on self-growth, but a time to take it seriously. Set aside a portion of your salary that will be invested in your personal development.
Take online classes, learn new skills and explore new parts of yourself.
2021 will be brand-driven, knowledge-driven, and people would want to relate with you based on what you know and the skills you can offer.
Your outward manifestation is a result of what you have inside of you, so when you invest in your knowledge, your results are better.
7.LOOK BEFORE YOU LEAP: What you know will always set you free. You cannot afford to gamble your way out of financial insecurity.
With that said, “Never invest in a business without a thorough understanding of it.” A lot of people have learned this the hard way, and the hard way is not always the way to learn.
Every business has a learning curve, but while you’re learning, be careful not to fail badly. Learn from the experiences of others and if you don’t understand a business, ask questions. It doesn’t hurt to ask really.
Most times, to avoid falling prey to this risk, take a course to learn more about your prospective investment or do a brief internship relating to that investment and get insider knowledge on your prospective investment.
One single bad investment can ruin your hopes of attaining financial freedom unattainable, so don’t do it.
8.DO NOT IGNORE REAL ESTATE INVESTMENT OPPORTUNITIES: Real estate is one of the assets that stays consistently above inflation.
As inflation bites into the cost of building materials, the cost of real estate will go up.