gold chains and shalaye
I am writing this at a time where our world is facing one of the most difficult times for all of mankind. My heart goes out to all the families most vulnerable and affected by these times.
This pandemic is setting a precedence for big changes for how a new world would look like, a rethink on the fundamentals of our priorities. In an age where companies who have previously declared million and billions of dollars in revenues and profits are seeking bailout and subsidies less than two months into the crisis but somehow individuals are meant to have enough savings to bankroll them for six months when out of a job. Unfair?
Today, the conversation is about money, the flaccid universal measuring tool. The one thing that might not change after this pandemic. As a black man, I am fundamentally disadvantaged when dealing with such issues as money management, depression, building relationship, and sexual relations because of words like vibes, é go dey alright, and God forbids. If you are still shocked when your salary finishes in the second week of the month and you have to feed on vibes till the next credit alert comes in, here are a few rules for how you should spend money.
- Budget — This cannot be overemphasized, you need to know off the top of your head at every given point in time what you can afford and can’t because your life depends on it. There’s no growth without goals, if there isn’t a defined point, you are just coasting. How much do you spend on feeding a month? How much do you need to save in a month to make rent at year’s end? Examples of things to include in your budget: rent, medical insurance, auto insurance, gas, fuel, electricity, internet, savings, investment, telephone bill, eating out, subscriptions, groceries, personal care, household items.
- Float — If you have a need, let someone else float you even if you have the means to afford it. It’s a form of interest-free loan and allows you to build credibility amongst your network. Also, if you understand how cumulative interests work, you’d realize that it cost you more in the long run when you always have to dip into your savings to meet petty needs. Don’t dip except you absolutely have to.
- Save — You need to save as often as possible, this is a no brainer, the real goal behind savings is building it into a habit, don’t be focused on the amount in the beginning. Commit an amount you can afford and do it consistently for 3–6 months then keep increasing it but be consistent. Your savings is not for meeting the needs in your budget, those things should have been taken care of or had the money set aside once you get paid. Savings are meant for things unplanned but probable emergencies like medications, police fines, and investment/networking opportunities.
- Invest — Remember the shirt that says “my money grows like grass”? This is the only way to achieve it. Invest and diversify your investment, start with things with guaranteed returns like Treasury Bills, Fixed Deposit, and Mutal Funds. As your risk appetite grows over time, research and explore more risky and long term instruments like stocks, bonds. I invest the return of my investment in things like people’s businesses and ideas. Investments are not to meet your immediate needs, it a form of long term savings for things like owning a home, children school fees, a vacperience (vacation + experience) e.g. 3 months in Cuba, just because you are a baby boy and you deserve good things, new phone who this.
- Emergency Funds — Savings alone is not enough, an emergency fund is important to buffer life-threatening situations like an expensive medical bill, bankrolling yourself for a year when you decide to quit your job and pursue a business idea or simply when all the chips are down.
- Retirement Savings — This right here might just be the most important of the bunch. There are different ways to do this, most recommended is through a pension fund manager but I manage my RSA myself cause I’m good like that. This should be different from the pension plan you have with your employer and for good reason, I’d explain why. Retirement savings are for the inactive days of your life, with the retirement age averaging around 60–65 yrs, you’d need a good chunk of money to live viva le vibes for the next 40+ years and that doesn’t include paying rent cause you should own and have fully paid for your mortgage by then with your investment and I’m sorry (African Parents) but your kids aren’t your insurance policy or retirement plan.
These are my unwritten rules about money and how I plan in that order. Hope this helps.
Three common stories I’ve heard recently and had to ask myself the question, is it fair? The first is a friend who’s father gave 35 years to a company as a CFO and was laid off without a severance package. The family has been forced to sell assets to make ends meet. The second is a top executive being laid off after restructuring with a mild severance package and 3 kids in private schools. Lastly was a management staff being denied insurance coverage because her medical bills had become quite an expense to the organization after committing 33 years of service?
While these stories might be unpleasant, the truth remains that no matter where you work or how fortunate your salary situation is, it is your sole responsibility to prioritize and plan for your financial situation. A business is a business and would make the most optimal decisions for the business for shareholders’ benefits. Yes, the conversation around company culture is becoming more pronounced but in the end, all systems die.