My New Find on Building Wealth

Ayoola Sosan Written by Ayoola Sosan · 2 min read >

Blogging about finance is not something I would have done in the past. I am not big on numbers but I have always been in control of my spending . Thanks to the internet, I know a few things about savings and treasury bills. As a child, I would always save every penny I got from adults. I had a piggy bank and a book where I recorded all the cash given to me. As I grew older, I started to put my money in a few investments and treasury bills. Apart from that, that’s it for me and finance. 

Doing an MBA now and taking a course in corporate financial accounting has sparked an interest in finance for me. I stumbled on a new find, so I decided why not get into deeper waters? Recently, I read an article by a female financial expert in which she shared some advice on personal finance. The objective of the article is to help readers create a personal financial framework. Personal finance framework is the process of planning and managing financial activities. There are five pillars of personal finance that will help make, manage and multiply money. These are:

  1. Income – Make
  2. Spending – Manage
  3. Savings – Manage
  4. Investment – Multiply
  5. Security – Manage


Income is the source of cash that an individual receives especially on a regular basis. It is our greatest wealth-building tool. A tool that typically requires active participation in the form of a full-time job or running a business. The question we need to ask our self is ”how many sources does one have and how can these sources be multiplied?

We can earn income through active effort by salaries, profit from running a business and by monetizing our knowledge. This is called active income. The other form of income is Passive Income. This is the result of using your active income. These may be investments you have made where you earn money or work you have done in the past that continues to pay dividends even in the present. Passive income describes the idea of “making money work for you.” This includes rental income, dividend income, returns from aggrotech businesses, royalties from books, intellectual property etc.


Spending refers to cash spent on goods and services for personal use and enjoyment in an economy. Expenses reduce available cash for savings and investment. It requires a lot of discipline. This is the only area of control to a large extent and lack of control can spell doom. It is important to categorize our expenses into maintenance, productive, adjoining and flamboyant. Good spending habits are critical for good personal finance management. How much we spend matters. Our income should grow at a high speed and our expenses should grow at a slow speed. In spending, respect and value money.


Saving is cash out aside for future investing or spending. If there is a surplus between what a person earns as income and what they spend, the
difference can be directed towards savings or investments. It is highly impacted by spending
habits. To do this, it is advisable to have a budget. To save, keep track of your monthly expenses and put a budget in place. This will help you control spending habits and save money whilst at it. Think about an exact amount of money that you want to have saved up by the end of the year. Divide it by 12, and save that amount every single month.


Investing is the act of allocating resources, usually money, with the expectation of generating an income or profit. Investing carries risk, and not all assets actually end up producing a positive rate of return. This is where we see the relationship between risk and return. There is a need to learn about the types of investment based on your age, risk appetite and goals. Then decide what works. Have short term, medium term and long term goals. Start now. No amount is too small. Examples include Stocks, Fixed Deposits, Bonds, Mutual Funds, Real Estate, Agric Business, Commodities, etc. Investing is the most complicated aspect of personal finance. It is one
of the areas where people get the most professional advice.


Security is protection against unplanned, unfavourable events like death and accidents. There are a wide range of products that can be used to guard against an unforeseen and adverse event. Common protection products include: Pension Fund, Life insurance and Health Insurance. We need to be deliberate in setting your life objectives, monetary and lifestyle and create a plan for accomplishing those objectives.

In summary of what I learnt in that article, building wealth requires effort and patience. If done right, It can benefit an individual and his or her family. It can generate an impact on the economy, jobs, and lives of other people. These pillars are guides on how to responsibly build wealth.

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