Last Updated on 19/10/2025 by Rasheed Busari
Banks are built to make money and redistribute wealth, not just for themselves, but through systems that work 24/7. What if you could apply the same method to your personal finances?
Financial institutions play a vital role in personal finance and financial literacy. They serve as intermediaries that facilitate the flow of money and resources in an economy. By understanding how financial institutions work, individuals can make informed decisions about saving, investing, borrowing, and managing risk. They act as intermediaries, helping to match those with surplus funds (savers) to those who need funds (borrowers). These institutions are fundamental to the functioning of any economy, both at the national and international levels. Understanding financial institutions and their role in personal finance is essential for achieving financial literacy. Individuals can effectively manage their money, plan for the future, and build wealth by leveraging their services.
Welcome to the idea of being your own bank, where you create systems that generate income, manage risks, and ensure long-term financial freedom. Whether you’re a salary earner, entrepreneur, or student, the principles are simple and life-changing.
Understand How Banks Really Make Money
Before becoming your own bank, learn how banks make money:
- They collect deposits (savings and current accounts).
- They lend out money at higher interest rates.
- They invest in low-risk, high-yield assets like treasury bills, bonds, and government securities.
- They manage risk by diversifying portfolios.
Banks use systems, not emotions. They create sustainable systems that identify opportunities to their advantage. To be your own bank, think systematically and logically about how to identify opportunities in your environment, how money flows in and out of your life, and ensure the inflows always exceed the outflows.
This book is a comprehensive guide written in a simple language and easy to understand, with a call to action on personal finance and financial literacy to give you the knowledge and skills needed for wealth building, financial security, financial freedom, and financial independence in this ever dynamic world.
Build Your Personal Financial System
Banks don’t rely on chance. They have structures, systems, processes, and well-trained staff that handle various operations in the bank. You should too.
Here’s a simple framework for creating your own financial system:
a. Income System
Set up multiple streams of income : salary, side hustle, digital products, or investments. Think of this as your “deposit-taking system.”
b. Expense Control System
Create clear expense categories: essentials, growth, and luxury. Buy things you need and buy in bulk to save money. Automate bill payments and track spending with tools.
c. Saving and Investment System
Don’t save to save, save to invest. Save to make your money work for you and not just lie idle in your hands or bank. Channel savings into low-risk investment instruments like money market funds, treasury bills, or mutual funds in Nigeria.
d. Emergency & Insurance System
Banks have reserves to cushion emergency/panic withdrawal. Banks have insurance to protect depositors’ funds and loans against non-performing loans. You too should have emergency funds for any unforeseen situations. Keep 3–6 months of expenses as emergency savings and secure insurance for health, property, and business risks.
Learn to Lend Like a Bank
Banks make money by lending at a higher interest rate to make higher returns, and so can you, wisely. You don’t need to become a lender; you need to have a mindset of earning returns on your capital or investment.
Here’s how:
- Invest in P2P lending platforms (with caution).
- Buy bonds and fixed-income securities.
- Invest in the capital market by buying shares either for dividends, gains, or capital appreciation.
- Explore cooperative societies or crowdfunding investment clubs (registered ones only) .
When you lend, do so with systems, collateral, and clear return expectations.
Automate and Reinvest Your Profits
Banks don’t spend profits, they reinvest them. You can do the same by:
- Reinvesting dividends and interest income.
- Automating transfers from your earnings to savings/investment accounts.
- Using digital financial tools to track progress.
This is the heart of compound growth, your money working for you even while you sleep.
Think Long-Term, Like a Bank
Banks plan for decades, not months. You should, too. Adopt a financial freedom mindset that focuses on sustainability, not speed and quick gains. Ask yourself regularly:
- Is my money system working automatically?
- Are my assets growing faster than my liabilities?
- Am I investing for value, not vanity?
When you think long-term, financial peace becomes inevitable.
Build for Reality
Living in Nigeria means facing inflation, currency fluctuations, and unstable economic policies.
That’s why your personal financial system must be adaptive and dynamic to the ever-changing situation of the country:
- Diversify your income into hard currency (USD) savings or dollar-denominated investments for currency fluctuations.
- Build multiple streams of income
- Invest in tangible assets like land, property, and business equity.
- Build liquidity buffers in Naira and USD to stay flexible.
Being your own bank in means building a resilient, diversified, and smart system. When you think like a bank and act like one, you stop living paycheck to paycheck. You create systems that generate money, protect wealth, and grow consistently. Financial freedom isn’t about luck; it’s about strategy, structure, and sustainability. So start today. Set up your system. Be your own bank and watch your financial life transform.
If this article inspired you, share it with a friend who needs a financial mindset shift. Follow The Financial Thrive for more practical guides on financial literacy, personal finance, and wealth building.
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