The Smart Money Woman

The Smart Money Woman is a 210 paged book which focuses on guiding African women to gain financial freedom and independence. The author, Arese Ugwu uses the art of storytelling to captivate and enlighten the minds of her readers. The book has 12 chapters and each chapter ends with some smart money lessons and some practical exercises to help you practice what you have read and learnt in that chapter.

The main character of the book is Zuri, a Nigerian woman working as a senior manager at a real estate firm in Lagos called Richmond Developments. At the beginning of the book, she is broke although she earns six hundred thousand naira every month after taxes had been deducted. She has a lot of debts to deal with and struggles to pay off the debts and adjust her spending plan so as to be able to live within her budget and save.

At the end of chapter one, the author explains what it really means to be broke and what it really means to be wealthy. She also explains the difference between active income and passive income and further explains that financial freedom is when your passive income exceeds your expenses. That is, when your passive income can be used to take care of your expenses and lifestyle.

In chapter 5 of the book, the author encourages women to build an emergency fund.

One of my favourite chapters is chapter 6 which talks about having money goals. In the smart money lesson at the end of that chapter, the author states that in order to be successful, we need to articulate what we want for our lives. She further asked us to write down our vision statement which is simply what we want our legacy to be. She also asked us some other questions like what our short-term and long-term goals are and what we need to do to achieve them.

Chapter 7 talks about developing a spending plan and a sustainable budget. In order to allocate your resources effectively, she advises that we divide our income into three parts: long-term financial goals, short-term financial goals and living expenses. She further explains how to divide our income into these three parts.

The author ends chapter 7 by asking us to organize our money by creating different accounts for different goals. For example, an account for emergencies, another account for rent, a different account for investment, an account for bills and so on.

Chapter 10 talks about investment, asset classes/types of investment, investment goals and strategy and how to pick an investment firm. In pages 175 and 176, the author highlighted a cardinal rule which is: “Do not invest in things you don’t understand.”

Chapter 11 discusses the topic of earning more. The smart money lesson is that in order to maximise your earning potential, you should focus on finding your purpose. Pursue a career that fits your skill-set and temperament; seek to add value and solve problems with whatever career path you choose.

Another lesson I learnt from chapter 11 is that I should pursue only the ideas that keep me up at night. I should be overly excited about my ideas before thinking about turning those ideas into a business.