From my personal experience, observation and research, I have discovered that there are certain mistakes many well-paid employees that make them go broke after working for many years. These mistakes have remained the same over the years. These mistakes are avoidable.
Because of the recession, a lot of employees are currently agitating an increase in their salary as the salary they currently earn is no longer enough to take care of their expenses. But as long as they are already making these mistakes, they will still end up BROKE, even if the salary is increased.
If you have been “BROKE” before, you’ll agree with me that it is not a funny place to be. So, I think it will be a good idea for you to take this information seriously, and save yourself the pain of being broke. I have made some of these mistakes myself, and today, I am still facing some of the consequences.
MISTAKE 1: Many well-paid employees do not save enough money when the times are good
There’s nothing wrong with spending your salary to buy the things you want, but if you keep spending your entire salary every month, it simply means that you are working for other people.
When you fail to save enough money from your salary, you put yourself at the mercy of your employer, economic changes such as recession and inflation, and you make it difficult for you to walk away from the job if you are no longer happy with the terms of employment or job requirements.
As an employee, your salary quickly becomes income to other people who have things to sell, and these people fall into 5 major groups - your family members, your friends, your colleagues, your service providers, and strangers.
When you save enough money, you are paying yourself. Pay yourself well.
If you’ve followed the news long enough and if you’ve been in this country long enough, you’d agree with me that job security is dead. As an employee you don’t have control over the job, so it is very important that you maximize every opportunity that you have to save as much money as you can when the times are good.
Who do you think would be wealthier in the next 5 years in terms of the amount of money in savings - the guy who earns N400,000 monthly and saves only N50,000 or the guy who earns N200,000 monthly and saves N130,000?
In 5 years the guy who earns N400,000 would have saved N3,000,000 while the guy who earns N200,000 would have saved N7,800,000.
The question you may want to ask is, “how come the guy who earns more saves a lot less?” The answer to this question is in the second mistake.
MISTAKE 2: Many well-paid employees will be wasteful with their salary when the times are good
“When you are in the frame you cannot see the picture.” – Les Brown
Many well-paid employees will not agree that they are wasteful now, until they find themselves broke. You can be different. You can choose to see the picture when you are still in the frame. The choice is yours.
A guy gets a high-paying job, rents a 3-bedroom flat in an expensive location where he pays N1,500,000 annually even though he is single and doesn’t plan to get married in the next 5 years. But the same guy would have been able to rent a 1-bedroom apartment in the same location and pay as low as N500,000 annually instead. Isn’t this wasteful spending? If he had gone for the 1-bedroom apartment instead of the 3-bedroom apartment, in 5 years he would have had an extra N5,000,000 in his savings.
And this is just one of the areas that many well-paid employees are wasteful. Other areas include entertainment, transportation, clothing, charity, electronics, mobile phones, airtime, feeding, hangouts and credit.
But like I said earlier, most well-paid employees will not agree that they are wasteful until they find themselves broke. Don’t be one of such employees. As much as it is within your control, don’t buy the things you don’t really need and don’t buy too many things on credit so that you don’t end up buying your way into serious debt.
If the money does not come easy, don’t be in a hurry to waste it.
MISTAKE 3: They do not learn to sell any product or render any service when the times are good
If you are not saving enough money, and you’re being wasteful, and you also do not know how to sell, you are definitely going to end up BROKE. Being able to sell a product or render a service gives you the power to generate income from multiple sources while you are still working.
Once you know and decide what to sell, you can now start leveraging on those groups of people that have been leveraging on you. I am talking about your family members, friends, colleagues, service providers and strangers.
It is always less risky to learn how to sell or how to do business when you are still employed. Even if anything happens to your job, you would have already acquired one of the most valuable skills in the marketplace which is the ability to sell, and with this skill, you can easily get another job.
Learn to sell, supply or produce something of value that solves a problem for someone and that people are willing to pay for. If you can do this, you can only be broke by choice.
MISTAKE 4: They do not invest in Personal Development early in their career or when the times are good
Personal development is a process of acquiring knowledge, skills and expertise to cover up the gap between where you are right now and where you want to be, and also to prepare yourself in advance for challenges of life.
Many well-paid employees won’t see the need to invest in personal development because their salary is still being paid. They ask questions like, “Why should I waste my time reading or attending training programmes?”
If you do not invest in knowledge, even if you succeed in saving enough money, you can lose all that money by making bad investment, business, career, family, relationship and even health choices. Personal development empowers you with the knowledge and skills needed to minimize your expenses, invest wisely, and sell strategically and profitably.
You can acquire more skills and grow in knowledge by reading the right kind of books, attending the right kind of training programmes, obtaining relevant certification, and joining an apprenticeship program.
Now that you know the mistakes many well-paid employees make that will make them end up broke, you can choose to avoid making these same mistakes or you can choose to repeat them.
The choice is yours!
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