To be financially free you have to owe a business and put up a system to generate income for your investment. The sure way to achieve that freedom is to start investing first and foremost in your financial education that will enable you to acquire financial intelligence to manage your business, and then building your business that generates multiple incomes.
A lot of money circulates in African communities and yet people struggle everyday to be financially free. What is the problem? Even though Africans are educated and continue to educate themselves on various issues, most of them seriously lack financial literacy.
Financial literacy is not just about accounting, it goes beyond that. It is, knowing what are your assets and your liabilities, your incomes and your expenses, and understanding financial and capital markets. It is important to know the difference between an asset and a liability. Most often people get confused about these two words in the sense that, what you possess is your assets and your expenses are your liabilities. But when you look at it critically, it is not so. When you look around yourself, you could see that a lot people have many big houses and yet they are not financially free. Why? Because most of them live in these big houses and spend their little income to maintain them. These big houses could be used for real estate business and generate more income for the owners. The same analysis is applied for acquiring personal cars, which put serious pressure on your income. African entrepreneurs should be very careful when they acquire assets. You should know that some of your assets are serious liabilities, which could be transformed into business to generate passive income.
Attending seminars and workshops to acquire knowledge and skills on financial literacy should be your first investment as an entrepreneur.
The second phase of the journey to financial freedom is minding your business. Having your own business is tough there is no doubt about it. But managing it with financial intelligence is a sure way of creating Wealth and being Rich. African entrepreneurs should work to strengthen the financial foundation of their business and make money works for them. You should invest your money in the business that generates passive income. Having a registered organisation or company, the African entrepreneur has the opportunity to learn and understand better accounting principles, investment, markets, law and taxes. Your Micro Small and Medium Scale Enterprises (MSMSEs) need an accounting system, which is vital if you want to build a financial empire. The more money you make, the more accuracy is needed. Financial literacy is the ability to read and understand financial statements. It allows you to identify the strengths and weaknesses of your business. It is having more options. If opportunities are not coming to you, what should you do to improve the financial position of your business? If an opportunity shows up and you don’t have money, and any bank is not ready to help you, how can you turn a product or a service into millions? That is financial intelligence. It is how innovative and creative you are in finding solutions to financial problems.
You should understand the science of supply and demand, which drives the markets and the investment, which is the technique of money making money. You should learn and understand the tax and the law governing the business environment in your country. You should use them to your advantages. As an entrepreneur and a business owner, you should use your company or organisation to enfold around the technical skills of accounting, markets and investing, which lead to an explosive financial growth.
To be a rich African entrepreneur, you should earn an income from your business; spend it to acquire assets that generate multiple incomes before paying your taxes.
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