Margaret Ntifo's Blog

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Margaret A. NTIFO

I Bargained With Life For A Penny

"I bargained with Life for a penny,
And Life would pay no more,
However I begged at evening
When I counted my scanty store.

For Life is a just employer,                        
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.

I worked for a menial’s hire,
Only to learn, dismayed,
That any wage I had asked of Life,
Life would have willingly paid."

I first came across this poem in Napoleon Hill’s classic ‘Think and grow Rich’ years ago, and it just about spoke volumes to me. I love it! Every time, I recognize that I am asking for peanuts, or pennies I am quickly reminded that ‘this world really is my oyster’!

How about you? What exactly do you want in your life? Think big, and know that ‘whatever you ask for, you will receive’.

Quote For The Day...

Sometimes you've got to let everything go - purge yourself.  If you are unhappy with anything - whatever is bringing you down, get rid of it.  Because you'll find that when you're free, your true creativity, your true self comes out."

Tina Turner

Movement Creates More Wealth

“If you borrow a thousand Pounds, the bank owns you. If you borrow a million pounds, you own the bank.” John Maynard Keyes (paraphrased)

These days the banks and financial companies are fighting to control your money because they know a fundamental truth about Wealth Creation:

‘The more money moves around, the more wealth is created.’

The banks make money when your money moves around, and the higher the frequency with which that happens, the more money is created. Why do you think that despite the administrative work it creates for the banks they have continued to make it more and more simple for you to move your money around? More and more ATMs are springing up everywhere, even in corner shops.

Technology today has enabled money to move around in a heartbeat, and all this liquidity is good for the general economy. Every time that money moves around, value is created, and someone somewhere, usually the banks harvest some of this value. They either charge you direct fees, or there is either unpaid interest or hidden cost inherent in every transaction.

For example, every time you get towards the end of repaying the bank a loan you owe them they are quite happy to give you another loan, to restructure the first. Often when this happens you can bet that you are paying hidden costs. They calculate it in such a way that you probably think you are saving money, which is seldom the case. What they are offering you is only convenience. They are the ones making money while you pay for the convenience.

Don’t get me wrong; it is not a bad thing for your bank to make money so long as you are making money as well, or getting something in return for the transaction. Always look out for the win-win situation, not a lose-win one.

There’s an interesting old banking adage, which is known as the 3-6-3 Rule:

‘Pay 3 percent interest on savings, charge 6 percent interest on loans and head for the golf course at 3 o’clock.’

Banks earn the bulk of their profits from the fees they charge for arranging your loans. Then they turn around and sell these loans, including its income to other banks. They are all making money using your assets.

One way to accelerate your wealth faster is to learn to do what the banks do, not what they say. Banks are known to encourage you to leave your money in savings accounts to earn pittance in interest. Then guess what, they turn around and do the exact opposite. They start moving your money around as fast as they can to earn them more money.

What do you think will happen to your money when you learn to accelerate its movement? You will be able to capture more interest and other income hitherto only being captured by the bank. You most definitely will be able to gain more ownership and control over your money. You will reach your financial goals faster.

Wealth comes through ownership and control, and from the movement of money.

Not many people realise how much wealth can be created by the controlled movement of money. I found this to be extraordinarily true last year when I helped a client of mine septuple her net worth in one year. By a combination of movement of assets from stocks and shares into property and some creativity, we did not double, nor triple, but managed to increase her net worth SEVENFOLD by simply moving her assets from one asset class to another creating value along the way. Despite what I did know, to see this done in real life was just phantasmagorical! How would you like to do this every couple of years?

So when the banks tells you that the longer you leave your money with them, in savings accounts, guaranteed ISAs etc. the more money you will have in the future, think again. Instead, find a way to leverage your money with controlled movement to create more money for yourself. If you don’t know how, just learn how. It’s as simple as ABC. Better still, you will reach your money goals sooner.

Ownership and Control of Wealth

Next to ownership another fundamental rule in creating wealth is control. Beware of any type of ownership that requires you to relinquish control. Personal responsibility and ownership should go hand in hand where wealth is concerned. No one, and absolutely no-one will care more about your financial position than yourself. Unless it is tightly linked in with their own financial success, and even so I would be very wary.

I always smile when I speak to some people about investing for themselves and they turn around and go straight to their bank, hand over the control of their money and let the bank choose financial products for them. Hello? Whose interest do you honestly think the bank is concerned with? Theirs, or yours! Do you honestly think that the advisor you see at the bank cares two hoots about your wealth than about his next bonus?

The problem with most investment products being offered today, especially insurance products is that they deny you both ownership and control. In most of these cases what you will realise is that your money is put to work to enrich the shareholders of the companies involved. To add insult to injury you incur charges and fees to give them the privilege of making themselves richer with your money. What an irony!

Granted, most people claim to find investment products out there too confusing, which confirms that the financial world has achieved its objective – To confuse you enough for you to hand over the control to them! Too many people would rather keep to their jobs, and keep on doing courses upon courses to get that elusive better position or promotion than to sit down and begin to sift through to understand what it takes to create true wealth. If you are one of these you owe yourself the time to learn what is at stake.

You do not have to know about everything. I am first to admit that I don’t know the half of what is out there. Despite what I have achieved, I still meet so-called financial gurus who try to bamboozle me with their financial knowledge. These are mostly the ones who know a lot but have nothing to show for their knowledge. I simply recognise these people for what they are, and quickly find somewhere else to be.

What I do know is that the little quotient of finance that I have made the time to learn has stood me in good stead. And I have no interest in people who would rather show you what they know than what they have achieved. After all, we all know that talk is cheap! Action is what counts. Learning is one thing, but it is the application of what you learn that gives you the key to solve problems, overcome obstacles and achieve any goal that you set for yourself.

Above all else, there are four things to remember:

1. Income is not Wealth
2. Wealth comes from ownership of the right things
3. Ownership and Control go hand in hand
4. Take Personal responsibility for your money

Wealth Through Ownership

The key to creating wealth is using your earned money to acquire ownership of certain types of investments that will make more money for you. The minute you consider putting your money to use to create more money you become an investor. An investor is someone who makes a purchase or expenditure with a view to making a potential profitable return in interest, income or appreciation in value.

Let’s consider some types of ownership that can enable you create wealth. Although there are many more asset classes to choose from most beginner investors have found it simpler to focus on three or four of the basic categories of ownerships available. These are:

1. Property – This is a tangible place to use your money to create wealth
2. Stocks – A way to invest wealth in the general economy
3. Ideas – Intellectual property, inventions, businesses etc.
4. Business – A good way to add value to the general economy

Nothing stops anyone from acquiring ownership in all four categories above. Notice too that a salaried job is not among the list. So why on earth does everyone think the only way to survive is to go and find a job and that’s it? I speak to many people whose sole aim in life is to get a better job, and another better job, and so on. These people have missed the next fundamental step of true wealth – ownership.

There are loads of opportunities to become an owner. Also, when I talk about certain types of ownership I do not mean depreciating items such as fancy cars or a designer wardrobe. Too many people try too much to own the wrong type of things, and worse still they do so by using credit.

Once you have done your groundwork and acquired the right type of ownership, at a later stage you will always have more left over to buy anything you want, and then you will not need credit to do so.

A Modern Day Definition of Wealth

”Money is a good servant, but a bad master” – Old French Proverb

If you want to be wealthy you must not only fully understand what wealth is, but you must have your own personal definition of wealth!

Here is my definition of wealth: "Having money from many sources that flow in faster than I can spend it."

Most people think they are wealthy simply because they earn a lot of money. Far from it! The people who think like this are the ones who always manage to spend even more than they earn, which makes a non-sense of the large paycheque.

The most important step to becoming wealthy is learning how to make your money WORK for you, as opposed to constantly working for money. One makes you a master of money, and the other makes you a servant to money. Which would you rather choose - the servant, or the master? Isn’t it great that you even have a choice in this matter? Yes, you do!

What this means is that you earn the money, make the money work for you, and then you spend what is left of it. Notice that I do not say that ‘you earn the money, spend most of your earned money and see if you can make what is left work for you’, which is what the masses do. Then they wonder why they are perpetually poor.

Your priority is to make your money work for you before you start spending any of it. That means delayed gratification before instant gratification.

Too many people these days confuse income with wealth. These are the people who believe that a large salary makes them rich.

True wealth comes from ownership of the right types of things. Rarely would items such as fancy cars or a designer wardrobe, which only depreciate in value make you wealthy.

Investing In Property

There are many places to invest your surplus cash, and many options available for building your wealth. Investing in Property or Real Estate has created many more millionaires, and in faster record time than any other category of investment. That is why I consider Property investing one of ‘The Three Pillars Of Wealth’.

Property is popular, and a powerful wealth building tool for a number of reasons. Firstly, we all have to live somewhere whether as a tenant or a homeowner. Secondly, there is always a finite amount of land in any given area. Once the land is sold, it can only rise in value. Thirdly, property investing offers greater opportunities for leveraging your money, as opposed to other asset classes.

Leverage is the ability to increase your returns by using credit or borrowed funds to improve your speculative capacity from an investment. The principle of leverage is an excellent one for investors, whether an individual, a company or the government.

When you buy a property, you usually put down a deposit of around 5% to 25% of the purchase price. The bank or mortgage lender lends you the rest of the money to facilitate the purchase.

In essence, you get to control a large asset, which is mostly financed by someone else’s money. And when you take into consideration the fact that on average properties double in value every seven years, you can understand how your twenty percent can quickly multiply exponentially in your favour. This is an excellent way of having your money work for you.

Like any investment, there are many ways to invest in property.

If you look hard enough, you are sure to find a method that suits your personal needs and goals. You may choose to go for a hands-on approach or a hands-off approach, or a mixture of both. This will very much depend on the time you have available. However, once you are convinced of the merits of investing in Property you will most likely make the time now to ensure your future gains.

There is a lot of information out there about investing in Property, ranging from books, home-study courses, seminars and free workshops. It very much depends on how confident you are about applying what you’ve learnt. Personally, what really helped me break the inertia was a one-to-one mentoring, which took me through the whole process from A to Z. But I know others who have only read a couple of books and gone on to create portfolios beyond their wildest dreams.

What is most important is putting into practice what you learn and taking yourself through the whole process over and over again until you can almost buy properties in your sleep. When you start to get the hang of picking out properties like ordinary shopping, it can get very, very exciting. As Mae West said, “Too much of a good thing can be wonderful”.

Consider investing in Property for the long term. Although, there’s no law against liquidating some of your Property portfolio, you might want to take counsel from Warren Buffet when he says (in relation to stocks, though):

“Our favourite holding period is forever.”

Investing In The Stockmarket

The term Stockmarket is a concept for the mechanism that enables the buying and selling (trading) of the shares and stocks of publicly held companies, other securities and derivatives. The stocks and shares of these companies are listed on the stock exchanges, which are entities (either mutual organizations or corporations) specialized in the business of bringing buyers and sellers of stocks and securities together.

Most modern day trading, as opposed to the open-and-cry system of the past is now done via electronic exchanges where the buying and selling occurs through on-line real-time matching of orders placed by buyers and sellers.

There are many different ways for investing in the Stockmarket, including income or capital growth, technical analysis or charting. Better still there are strategies that do not require complicated charts. All you need is a ruler and pencil, and the right publication to select high-performing companies. Something a seven year-old can be taught to do. If you look well enough, you are sure to find a method that suits your personal needs and goals.

You can go for a hands-on or a hands-off approach that can take anything from an hour per week, through an hour per day to an hour per year. You can go for a highly risky strategy to a medium to low risk strategy. Consider investing for the long term instead of short term.

A lot of people are afraid to put their money in the Stockmarket because they are highly concerned about risk. What they forget is: Risk is a factor of life, and risk can be managed and highly reduced.

Most people tend to seek the advice of financial advisors without realising that financial advisors mostly earn commissions on recommending and selling specific investments. It goes without saying that they will be more interested in selling investments that will ultimately make them more money.

Hence, it is not the smartest move to let someone else invest your hard-earned money for you, especially when you realise that learning about investments is not exactly rocket science. Ask yourself this question: Who is most likely going to look after your money better, you or someone else?

Further more, most of these advisors are not wealthy individuals themselves neither are they successful investors. So it is very much the case of ‘the blind leading the blind’. In many cases, the only difference between you and the financial advisor is just a licence to advise on investments, sadly without the need to be investors themselves. As useful as the licence might be to financial advisors, you will be unlikely to find a millionaire investor with a licence, or a financially independent financial advisor.

What you want is to learn about investing from people who have a success record of investments themselves. People who can teach you from their personal real life experiences! People who can teach YOU to fish, and not fish for you. Theory is great, but what will make you rich is real-life application.

Learning to invest in the Stockmarket might well be the smartest move you ever made in terms of managing your money better to ensure that it is working for you. Working harder will not make you wealthy! Making more money will not make you wealthy! Investing your surplus money is the key to wealth.

How To Make Your First Million

The question most people want to know about money and wealth is:

‘How do I create wealth? How can I become rich?’

The simplest answer to this question is twofold:

Spend less than you earn, or make more money than you spend. Simple, and the added good news is you can choose to either spend less than you earn, or make more money than you spend, or decide to do both. Whichever you choose will naturally create a surplus for you that will inevitably make you rich, even if you do nothing else.

Most people however find this a most boring way of creating wealth, and either never start or find it too boring to continue. This is often due to lack of information or education about what to do with the surplus money that is created.

In fact, the magic difference to where you are now and having enough money and wealth to meet your every need is in the word INVESTING! Investing your surplus money is the key to wealth. Working harder will not make you wealthy! Making more money will not make you wealthy!

You have to learn how to invest your money to become wealthy. First, create a surplus. Then invest the surplus.

One of the most important resources we have as human beings is our time. When we have both time and money, we can create the lifestyle of our dreams. Unfortunately, we have been conditioned into trading one for the other. When we continually work hard to earn more money, we trade our time for money thereby giving up, or deferring our lifestyle.

When we learn how to invest our surplus money, we start putting out our money to work for us, as opposed to us constantly working for our money. Over time, thanks to compound interest, the income from your investments will increase thereby giving you the freedom to work, or not to.

There are a number of different investment asset classes you can choose to invest in. You are better off choosing two, or three at the most. But start learning about one to start with until you have mastered it and have a good grounding in it. Then focus on another asset class. The reason for doing this is to ensure that you have a solid foundation for your wealth. By so doing, you also create multiple streams of income and your income is not dependent on just one source.

Learning about how best to invest your money can be a lot of fun, and definitely beats simply leaving your surplus cash in a savings account.

Following are a number of asset classes you can choose from.

• Stocks and Shares: income or capital, domestic or international
• Property / Real estate
• Bonds: corporate or government, high, medium or low yield
• Cash: money markets
• Natural resources: oil, timber, minerals
• Precious metals: Gold, silver, platinum
• Luxury collectibles: fine wine, art, classic automobiles
• Foreign currency
• Businesses

One of reasons why you need two or three different asset classes is that the best performing asset classes vary from year to year and is not easily predictable. Hence, having a mixture of different investments will help you meet your medium to long-term goals and reduce your overall risks in terms of the variability of returns for a given level of expected return.

I am a big fan of ‘The Three Pillars Of Wealth’, namely:

1. Stocks and Shares: income or capital, domestic or international
2. Property / Real estate
3. Businesses

One does not need a Harvard degree to master the basics of any of these. That’s why I focus my wealth mentoring on these three core areas.

Do not be deterred by small beginnings with your investments. I started investing with £100 per month and many people have started with less. Focus more on taking action, and starting early. Whichever asset class you choose to start investing your money in to create wealth, the one thing that is for sure is: The sooner you start the better off you will be in the long run.

The one thing most investors say to themselves, once they see their investment returns compound year after year is, ‘I wish I’d started sooner.’

Do not wait any longer. Start small, if you have to but start now!