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The Wise Investor

Kate brightened a little, her confidence restored. "I do my
best," she said, "but I'm not an expert on money or
investment. No-one ever taught me how. That's why I'm
asking you for help." Kate looked at him slyly, then
continued, "I don't want to wait another forty years to work
it out."
John realised she was getting back at him, and it was fair
enough, too. He hadn't meant to criticise. His face slightly
reddened, John decided it was better to pass by the
comment and keep talking.
"More income is not the answer," He said confidently.
"Yes, it does help, and increasing your income is important,
but it will all be wasted if you don't manage your money
wisely. Sensible money management is the key to it all. You
must manage your money wisely if you want to increase
your wealth and become more independent.
"Increase my wealth!" Kate exclaimed. "What wealth?"
John smiled. "You'd be surprised, my dear, but that
comes later. For now, I want to talk about managing your
money."
"The first rule of money management," John said, "is to
have control over your money. You must record where it
comes from, and where it goes to. I know this sounds
obvious, but few people actually do it.
You must record all your expenses, so you know what
your money is being spent on. There is an old saying in
business management, which says: 'You can't manage what
you can't measure'. Let me tell you, Katie, that never was a
truer word spoken.
Before you can manage your money and increase your
wealth, you must get control. You must write down the
figures, and know exactly how much is spent on each of
your expenses. Once you have this, you can begin to
improve the whole picture. Most people spend money each
day, and a month later have little idea where it all went."
John was right, Kate thought, that it did sound obvious.
Still, she had to admit that she didn't actually record all her
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