If there is any one account that if you open, it will guarantee a future, free of the hassles of making money, what account will it be?
I remembered the euphoria of opening my first bank account. I thought it was the passport to wealth.
But as the years rolled by and account was still empty, I had no choice but to rethink what owning a bank account really means.
These accounts listed below are accounts that will help you in all areas of your financial life.
They are accounts that will help you save, invest, build wealth, protect your wealth, and retire gracefully.
They are accounts that will ensure that in every period of your life, that you are financially secure.
They are a must have financial accounts.
I think a savings account is essential because that is where the quest for financial freedom really starts.
The truth is that the internet has rendered the traditional savings account useless. What is the need to save when you can spend it anytime you want?
In fact, I recommend that banks should change that name and find something else. Maybe, they should consider internet account. And create another product called savings account. Real savings account this time.
You need to find ways to save your money. It must not be the traditional savings account but something or somewhere where you are assured that your money is safe and readily available for you.
At least that of a lot of microfinance banks are not yet corrupted. And there are lots of insurance products that can serve as a good saving account. The most important thing is that you are saving money.
I know you will resist, especially that of microfinance. But the thing is that it serve the purpose, it lets you save and you are also helping your local business to grow which in turn will help your community.
I will leave that preaching for another day.
2. Current Account
Some people might not need this account especially with the way saving accounts are structured in Nigerian banks. But it is here for the simple reason that you must outgrow your savings account and own a current account.
That is, you must one day own your business. A business that conducts hundreds and thousands of transactions a day. This account allows you to do that.
3. Brokerage Account
This is an account that allows you buy and sell securities on the stock market.
When you have been able to save a good amount of money or your business begins to return good profits for you. It is only natural that you begin to seek new investment opportunities.
Here is where the stock market comes in.
The Nigerian Stock Exchange has not really recovered from the credit crunch of 2008. As a result, more people have left the market.
The more they go the more prices of stock decline. This has caused a lot of people to think that the stock market is not the place to be when it comes to making investments. Thank God it is finally rebounding this year.
But I think it is the best place to be. It is the most important account to have when it comes to investments and wealth creation.
If you want to be the next billionaire in our country, there is no way you can be that wealthy without dealing with the stock market. It is either you are going to the market to raise money through the sale of shares (Equity financing) or you are going to borrow long term loan (Bonds).
Either way, your business will one day outgrow the money in your pocket and then that of your family members and then that of your friends so that the only option you will have is to raise more money away from people you know.
I will not start now to tell you the importance of investing in the stock market. But I will tell you one thing, don’t go to the stock market to double or triple your investments within weeks or months but have a mindset that you are going there to own a good business that will continue to make profits for you for years or decades.
Investing in the stock market first and most of all is all about owning a good business. Nothing more, nothing less.
An insurance account is an account that helps you protect yourself, your loved ones and properties from all forms of risks. This you do by transferring those risks (accidents, death, damage etc) to Insurance companies that if anything happens, they will compensate you.
I know what is going on in your mind right now. What is this thing doing on this list?
Let me tell you, it is here because it is very important.
Tell a Nigerian that there might be an accident one day with his car. The person will go in that night and ask God to scatter his enemies, anywhere they might be.
But everyday people have accidents. Every day, people die. Every day, people are left incapacitated and unable to work for the rest of their lives.
Yet, we still curse insurance agents who are trying to help us to protect our loved ones from the unforeseen circumstances of life.
One single mishap can destroy years and years of hard work.
We are talking about financial freedom. When you don’t protect yourself and something happens that causes you to start all over or leaves you in perpetual penury. You see that you are not financially protected.
If you don’t want to do it for yourself, do it for the ones you love. That is what insurance is all about: protecting the ones you love.
Buying insurance is very important. Instead of carrying all the risk yourself, try and share with insurance companies. They will protect you against any possible loss.
5. Pension Account
A pension account is an account where you set aside money every month, to be spent after retirement.
Being financially free also means not lacking even in your old age. You don’t want to earn a good income at the peak of your career, then when you retire, you won’t be able to finance your daily needs. Your fate for the rest of your life will be determined by your children or any other person who cares about you.
Then they will start dragging you all over the place, telling you where to live and where not to and even trying to tell you how to live your own life for you.
Some people don’t really think about it because they are young and believe that old age is still far off.
It is coming, and it is coming so quick you might not know when it finally arrives.
Start now, have a pension account and start preparing for old age.
True financial freedom cuts through all stages of life.