There is a leadership principle by John Maxwell called the Law of the Lid.

This principle talks about your capacity to lead people.

If your capacity to lead is low, the lower your lid, the few or no person you can lead.

If your capacity to lead is high, the higher your lid, the more people you can lead.

So here is an example:

If your capacity [lid] is to lead 10 people and you are given 100 to lead, 90 people will leave you.

However, if your capacity [lid] is to lead 100 people, and you are given 10 people to lead, 90 people will join you, because you have the capacity to grow from 10 to 100.

I think the same principle applies to your finances.

You financial lid determines the amount of money you can manage.

If your financial capacity [lid] is R10,000 and you are given R1 million. You will squander R990,000 before you even start thinking about budgeting.

If you financial capacity [lid] is R1 million and you are given R10,000, you will grow it to R1 million because you have the capacity a million.

This is why those who win the Lotto, or get financial windfall, always lose their fortunes over time because they do not have the financial capacity of millions but of thousands.

This is why some sports stars, entertainers, politicians who get paid millions lose them once they retire, because they have low financial lids.

To those who have low financial lids, too much money gives them itchy hands.

They are uncomfortable with too much money in their accounts because they are not used to it, it makes them excited and the natural thing that first comes to mind is to spend it.

Those with high financial lids, money is not an emotion, instead it is a tool they use to get to the next level.

The good news is that you can increase your lid, through training, mentorship, reading books, attending financial seminars, developing the habits that will increase your financial lid.

The idea is not to win big on schemes, the idea is to increase your capacity with the little you have to grow it to be big.

Financial independence does not start with having lots of money, it starts with having lots of capacity to manage money. It is a skill thing.

If you have a high financial lid, you will attract more money, if you have a low lid, you will lose excess beyond your lid.

You want to be financially independent? Grow your financial capacity [lid].

If you struggle to manage small amounts, it is going to be difficult to manage large sums.

If you are given R100, are you able to grow it?

Are you a multiplier, not a subtractor?

Be someone who grows things, not who spends things. Be a net producer, not consumer.

What is your financial lid?



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