Financial Literacy: Savings Part I

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Photo Cred: Siphumeze Khundayi

Why are people unable to save money and eventually create wealth for themselves and their heirs?
Attitude. The attitude that one needs a lot of money to create wealth. All you need is what is in your hands, plus a strategy.

Just imagine, you are in a steady job for 25 to 30 years, how many salaries is that? Even if the salary stayed the same, how much is that? All the plans you have to spend, invest or otherwise will be from this source. Even if you do not borrow from a bank, there are many ways to leverage on this steady flow of money every month.

Expenditure is under your control. You decide what gets spent, where and when. You have the power to apportion how much and on what activities. Given this scenario, the power is in your hands. Why then do people not break through?

Having spent more than 25 years in the business of money I notice that the attitude of people is the same. Spend now and when an opportunity presents itself for investment there is no cash. Is it not time we had a conversation about this phenomenon?

Why are people unable to save money and eventually create wealth for themselves and their heirs?
Attitude. The attitude that one needs a lot of money to create wealth. All you need is what is in your hands, plus a strategy, a good one A good strategy will be informed by one’s financial literacy levels. Worldwide financial literacy surveys have shown that on average only 1 in 3 people on the African continent are financially literate.

Just imagine, you are in a steady job for 25 to 30 years, how many salaries is that? Even if the salary stayed the same, how much is that? All the plans you have to spend, invest or otherwise will be from this source. Even if you do not borrow from a bank, there are many ways to leverage on this steady flow of money every month.

Expenditure is under your control. You decide what gets spent, where and when. You have the power to apportion how much and on what activities. Given this scenario, the power is in your hands. Why then do people not break through?

Having spent more than 25 years in the business of money I notice that the attitude of people is the same. Spend now and when an opportunity presents itself for investment there is no cash. Is it not time we had a conversation about this phenomenon? How do we get people to be financially literate? To get people to a place where they are able to use their current resources to build financial stability and wealth creation?

The matter of ‘savings’ is at the forefront of my thoughts because it is the foundation of direct and indirect prosperity. There is no magic to prosperity. The basic elements are the accumulation of meagre resources, deferment of consumption and time. Does this look like the equation to find I, Y, or T? There is nothing new under the sun. Resources are never too small to be saved away and there is no substitute for time.

In our poverty-laden existence, we have learnt to squander time and resources, eventually failing to accumulate anything. At the end of the day, we make excuses. However, savings is the magic that has birthed prosperous communities in generations past. Savings give you options, the freedom to explore, discover, conquer and adventure. It makes you creative and promotes innovation. Can you imagine an environment where these elements are absent? In the same vein, these attributes do not happen overnight or by accident. It is the painstaking effort, over time, to accumulate resources that ultimately lead to a worthwhile prize.

This mind-set can, and should be cultivated at individual, community and national levels. It is this endeavour that will facilitate the proliferation of successful individuals, despite the abysmal standards of societal poverty. It is unequivocal that you cannot have a prosperous nation without prosperous individuals.
If, therefore, the two parties are mutually inclusive, then we must focus on the individual to ensure their prosperity and ultimately the prosperity of nations.
What needs to happen to achieve this fantastic yet simple expectation of prosperity from savings?

Increasing resources is not the answer (resources will always be available in various amounts), neither will it help to try and regain lost youth. A changed mind-set is the answer. A redefined mind-set will redefine resources, set new goals and focus more ably. Redefined resources are critical because this will deal with bottlenecks brought about by bonded rationality and a lack of lateral vision. What does this mean? Currency will be expanded to enable prosperity to be redefined.

BN

Make sure to read part II of this post.

1 Comments
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