Lots of people ask me about how I manage my money. Not how I managed it before, but how I manage it now that I’m a self-made millionaire. I won’t lie, I still have a lot to learn! It took me years to learn about how to invest properly, mainly because it took me years to actually start making money out of my business.
I’m still learning a lot and I’m no financial advisor! But, this week, I thought I would share three simple things I do to make sure that I manage my money wisely as a millionaire. So, let’s get rolling!
Dare to give yourself a paycheck as an entrepreneur.
The first thing I’m going to talk about is being “private poor” — or not being private poor, more importantly.
Growing up, I saw so many people keep their money in their businesses for lots of reasons. It’s good for the business, you pay less tax, and so on. So, they didn’t give themselves a decent paycheck, and even though their business was growing, they were struggling.
Most accountants will tell you this is the way to do it, but it’s not how I did it. I didn’t want to feel like I had no funds, and develop a bad relationship with money or a bad money mindset. I didn’t want to be using my company card for things I shouldn’t be because I hadn’t got enough money personally.
It didn’t feel conducive to making more money. So, I skipped being private poor.
Looking back, I believe it did make it easier for me to continue to build my company with ease. It didn’t feel like my expenses were fully dependent on my company. I didn’t feel like I couldn’t spend any money for three years while I built it, and so it didn’t block my own wellbeing or growth mindset.
Next lesson… stop spending your money on stupid sh*t.
This starts with really paying attention to liabilities versus assets. The book Rich Dad Poor Dad by Robert Kiyosaki was where I began to learn how to do this. The book talks about what a liability is versus what an asset is.
An asset is something that gives you more value over time and a liability is something that actually decreases in value.
Last year, I spent money on a really big liability — a new Jaguar. Financially, it was a liability. I spent a lot of money on having it in a specific colour, and cars depreciate in value the minute you leave the dealership.
But I don’t view liabilities and assets as black and white. There can be personal assets — things that bring you value in a personal way. That car was the one thing I knew I really, really wanted. I view my personal trainer as a personal asset. Sure, it costs me money, but it makes me feel good and it makes me healthier.
I've really revisited the way I look at liabilities and assets, and I have come to the conclusion after buying the car, that I won't be as easily lured into those things anymore. I did it. I tested it out. If I look at my finances now, I'm still really, really happy with the car — but I don't think I would do it as easily again. Financially, it didn’t bring me value. But every time I step into that car, I feel so happy.
Alternatively, I’ve spent big money on shoes, or flights, and just felt bad afterwards. They weren’t worth that stupid money.
Managing your money is not just about finances. It’s also about personal assets. It also has to do with what something is worth to you.
You really have to ask ‘what is it worth to me?’ instead of thinking ‘I can spend money on everything or on nothing’. You have to be picky about what spending that money is worth to you.
Unpopular opinion: you can’t count on anyone else (for your finances)
Another way I manage my money is by not putting everything in one spot. Having different bank accounts, investing some.
Just make sure you don’t put all of your eggs in one basket.
I would also never travel with just one Visa card. I would make sure I have a couple of cards from different companies.That way, if anything went wrong, I know I can still fly back home or stuff like that.
Just make sure you’re spreading your risk, and spreading your cash flow. This could also be spreading the risks in terms of the money that's coming in. I have different systems where I accept payments. I don't want everything to be coming in one system because at the beginning of this year, I had over 300,000 euros that was coming in for payment plans. That was all coming in through one provider.
If that one provider makes a mistake, I lose 300,000 euros. You're probably thinking ‘but that will never happen’. It happens. I had it with the same provider in a different company where we saw that none of the VAT went through, so we didn't get any of the VAT. Not getting the VAT on 300,000 euros would be a really big problem.
Basically, no matter how you do it, you can't count on anyone but yourself.
I know that sounds negative. Someone once said to me ‘I don't trust anyone, not even you’. She's married to my godfather, so I was like, well, that's mean. She explained ‘no, I don't mean it in a bad way. I've just learned that I can't trust anyone’.
Now, I get what she was saying. She's right. You can't trust anyone but you, so you have to take care of your stuff. Make sure your numbers and your cash flow spread out. Spread out your risks.
Don't just have one big client. What if that client drops you? Don't just put your cash in one bank account. Don't just have one Visa card. What if it gets blocked and all of your systems go down on the day that you have a really big event? Spread it out.
So, to conclude, I’m stil learning how to do it all, but here’s my 3 tips on how to manage your money:
- Skip the “private poor” mentality — a positive mindset and abundance will help you in the long run.
- Pay attention to not spending too much on liabilities. Invest in assets as much as possible — personal or financial.
- Spread. Your. Risks. Don’t be dependent on other people.
All of these tips will help you keep control over your money, and ultimately help you make more. But, maybe you still struggle with certain money blocks. Luckily, I have been working on ways to help you even more.
Do you want to see what the possibilities are for you to make more money and take more control over your financial future? My Master Your Money Summit is going to fix all of that, where I'm going to teach you some stuff. There will be some amazing guests as well.
The summit is starting right now as this episode airs. If you want your seat, go and grab it through fastforwardamy.com/moneysummit. You're gonna walk out like you’ve had a money makeover.
It's also in honor of my program, The Bold Money Makeover that I'm launching this week. Go and grab your receipt for the Master Your Money Summit through fastforwardamy.com/moneysummit — feel your money attraction and controlling vibes increase from the moment you hit that button!