Good Morning 😃
How are you doing?
Friday letters are usually dedicated to taking questions from our community. Do you have a question for us? Please feel free to
- send an e-mail to info@themoneyafrica.com; or
- send a DM to any of our social media channels, or
- simply fill out this form. Don’t worry, your responses are kept anonymous.
***
Question
I recently got a side hustle of selling hair in addition to my regular 9-5 job. But I realized I’m spending both the money from the side hustle & my regular salary. How do I separate both of them so I don’t end up squandering everything?
Answer
Establishing clear boundaries and organizing your finances can help you manage your money more effectively. I’m going to share some steps you can take to separate your business income from your regular salary:
- Open a separate bank account: Start by opening a dedicated bank account solely for your side hustle income. Choose a bank or financial institution that suits your needs and offers business accounts. This will help you keep your personal and business finances separate.
- Obtain a separate debit card: Consider getting a separate debit card linked to your business account. This will allow you to make business-related purchases without mixing them with your personal expenses.
- Establish a budget: Create a budget for both your personal and business expenses. Determine how much money you need to cover your personal expenses, and allocate the rest towards growing your side hustle. Stick to this budget to avoid overspending or mixing funds.
- Pay yourself a salary: Treat your side hustle as a separate business entity. Determine a reasonable salary for yourself based on your side hustle’s profitability and pay yourself regularly. This will help you maintain a clear distinction between your personal and business finances.
- Automate savings: Consider setting up automatic transfers from your business account to a savings account or investment account. This way, a portion of your side hustle income can be saved or invested without you having direct access to it for personal expenses.
***
Question
I have been listening to several classes on Investment and I still find it scary to actually invest because I don’t want to lose my hard-earned money but I also understand that investment is one of the best options for me to build my wealth due to my very busy work schedule. What are the medium-risk investments that I can make?
Answer
It’s completely understandable to feel apprehensive about investing, especially when you’re concerned about the risk involved. However, investing can be a valuable tool for building wealth over the long term. To help mitigate risk while still pursuing growth, I’m going to be sharing some medium-risk investment options you should consider:
- Mutual Funds: Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. They are managed by professional fund managers who make investment decisions on behalf of the investors. Mutual funds offer diversification, which helps reduce risk compared to investing in individual stocks. There are many types of mutual funds that you can pick from and the one with the lowest risk is the money market fund. A money market fund is a type of mutual fund that invests in short-term, low-risk debt securities such as Treasury bills, commercial paper, and certificates of deposit. These funds are designed to provide you with a relatively safe place to park your cash and earn a modest return while preserving capital.
- Exchange-Traded Funds (ETFs): ETFs are similar to mutual funds but trade on stock exchanges like individual stocks. Some ETFs are focused on broad indexes and they are investment funds that aim to replicate the performance of a specific stock market index, such as the S&P 500 or the FTSE 100. They provide you with a way to gain exposure to a diversified portfolio of stocks representing a particular market or sector.
Even with medium-risk investments, it’s crucial to conduct thorough research, understand the investment vehicle, and consider your investment goals and time horizon.
Diversification is key to managing risk, so spreading your investments across different asset classes can help mitigate potential losses. If you’re uncertain about which investments are suitable for your specific circumstances, you can book a session with MoneyAfrica and you’d be connected with a financial advisor who can provide personalized guidance based on your goals and risk tolerance.
***
Would you like to know the state of your finances?
Take this test to see how you are doing financially
***
Do you know that we have our own podcast? It’s MONEYTALKS!💚
Here’s a link to listen to all the amazing episodes we have!
***
Thank you for reading Money Africa’s Blog.
Please feel free to share it.
MoneyAfrica premium plan
Are you a mid to high-income earner? Do you find communities a bit too busy? You should sign up for our premium plan.
You can learn more about that here.
***
We often get questions regarding how to plan your finances to align with your relocation plans, especially for students seeking to further their studies. As always, we have heard you, and we have put together an e-book to help you navigate this. Follow this link, to get your FREE copy of the e-book: The Japa Encyclopedia.
***
Get our annual subscription and learn more about investing safely and building a solid portfolio in 2023.
Don’t forget to:
- Join our community, if you want to smash your 2023 financial goals. It takes at least 30 days to build great habits that will last you a lifetime. So why not start now? There is a lot you can achieve.
- If you would like to document your financial journey in 2023, then our journal would be an excellent fit for you. It costs ₦7,500 (excluding delivery).
- Get a budget sheet to track your monthly expenses. Click here
- Get an investment tracker to be on top of all your investments. Click here
MoneyAfrica is a financial literacy platform. Our goal is to make everyone better with their finances.
We do this by engagements via our:
– social media handles
– platforms for paid community members (for adults and students)
– webinar sessions with corporate clients
Would you like to join any of the communities? Please click here
Would you like us to hold a webinar for your company’s staff? Please send an email to info@themoneyafrica.com
