The 5 Types of Accounts I Started With
For about 5 years ago I had the feeling and the edge of becoming very rich and wealthy. As a matter of fact, looking back from where I come from I have no choice but to be rich. So I started doing some research and reading to become a billionaire.
From all my findings it was very clear that I had to do three main things. Had to make my money work for me (make money even when I am sleeping), had to get income from multiple sources and I have to work for myself at a point in my life. The backbone of all is that I need some seed money to start with. Unfortunately, I had no uncle, brother, or relative to give me this starting capital. So I had to build this seed capital myself. So I set out to see the best way I can do this. Reading several books I concluded that I needed to put money aside, from paying myself, investing, and saving towards pension. I decided to create 5 different accounts to take care of all these. These are the accounts I created Emergency Fund, Family Fund, Home Fund, Retirement Fund/Freedom Fund, and Educational Fund. Now whatever you call them is entirely over to you. Even if you decide to have more than 5 accounts that is totally your choice, the aim is to have a plan for at least all these aspects of your life.
- Emergency Fund. This is where most of us are found fumbling. This account is supposed to be for a rainy day. If you are a Christain like me, we pray and have faith that we don't fall into trouble or nothing bad happens to us. But like we all know we don’t get to choose what happens to us so we just might prepare for anything. And also I don’t like leaving things to chance. Should you hear sudden news of your father being admitted to the hospital, this is the fund from which you pull. Should you lose your job, you pull from this account. Is mostly advised to keep about 3 months of your income if you are a stable salaried worker. But for people like me who are entrepreneurs, it makes sense to keep a 6-month income as a reserve. For example, if you earn GHS 1000 as a teacher then it makes sense to keep at least GHS 3000 in your emergency fund. For more on this do yourself the favor of reading “The Total Money Makeover”. To be honest I have not been true to this account though. But am working hard to improve when it comes to this.
- Family Fund. If you have plans of ever making a family then this is very important else you can ignore this. I created this account purposely to put money aside for my marriage and my future family life. Things like rent for my new home with my wife, housekeeping, etc. Hope you get the idea here, all I wanted is an account from which we can withdraw money during the planning process of our wedding to when we are living together. I am sure my future wife reading this post will be smiling by now. All other family expenses would come from this account.
- Home Fund. This account was created purposely to save money towards getting my house. Depending on how you look at it you might not need this account but just make sure you have plans toward buying your new home if your father or family hasn’t left any inheritance in a form of a house for you like in my case.
- Retirement Fund/Freedom Fund. To me, this is one of the most important accounts. I have always wanted to retire smiling. To be able to travel anywhere in the world. As the name suggests, the aim is to have some money to take care of yourself when you retire from active service. I did not want to be like some parents who will be looking up to their kids to support them when they also have a life to live. I recommend you also have an account of this sort or something similar.
- Educational Fund. I created this account as a source of funds to continue my education. But I have modified it a bit to take care of my kids' education instead. The reason I did this was that I knew I can get a scholarship to take care of my education instead of using my hard earn cash. But if you still want to use this for your own educational purpose go ahead and do it.
To better understand these accounts and which bank you should open these types of accounts, I will recommend some books for a read.
All these accounts don’t have to be created with one particular bank but any bank of your choice. You might not have the same names for them but just make sure you have thought through all the areas that you need to. Make sure you read more and feel free to share your thoughts with me. Give me a clap 👏 if you did enjoy this piece.
