Have you ever visited a friend’s house only to find some posh furniture and the Samsung OLED Curved television and wondered if your home will ever look like your pal’s? Perhaps your friend was born with a silver spoon in his mouth or maybe, his well-furnished is just personal effort, a saving culture cultivated at an early age.
When American author Napoleon Hill said saving money or the saving habit is the foundation of all financial success including investing, he may have looked at fellow Americans and known that those enjoying retirement had cultivated the saving culture from an early age and with the money accumulating they were able to invest, hence reaping from their investments. The saving culture entails having the discipline to cut down unnecessary expenses and put aside some money so that you can take advantage of situations such as starting businesses, buying shares from the stock market when the market crashes or even going back to school. Most of the times people start asking questions such as ‘is it too early to start saving? How much should I be saving? When is the right time to invest?
People who earn little have the disease of saying they will start saving when they earn more. This is a myth and the saving culture should be cultivated from the word go, even if you earn a paltry salary.
“Practicing the culture of saving is something that you should cultivate from the start, even when it means saving ten shillings a day,” says Waceke Nduati, the founder of Centonomy Limited, a consultancy company that advises employees on financial matters. “With the little savings you have, there is always somewhere to invest, even with five shillings!”
Flossets vs assets
We all aspire to lead stress-free lives, own a house and drive top-of-the-range cars. However, if you go to a bank to secure a loan to buy a car, according to Waceke, that is wrong decisions and she calls it a flosset, something that you will use to show off but it will depreciate with time.
“Pursuing a loan to buy a car is a regrettable financial mistake that people make in life,” says “I would rather get a loan to buy land, an asset, than buy a car, a flosset, a material used for showing off that depreciates in value over time.”
“An asset keeps your money safe and appreciates in value while a flosset consumes your money while depreciating in value.”
What is wealth?
People think that wealth is valued by the house you live in besides the car you drive. However, this is not the case with Waceke. “Wealth is about how long you can survive without an income and not by the car you drive.”
Financial woes? Carry your cross man!
When someone is broke (s) he looks for scapegoat to blame for the financial woes, and this is a bad mentality. “Do not blame anyone for your financial problems because most of them are things that you can solve easily,” adds Waceke. Image vs wealth creation
Those who want prestige in life without the aim of creating wealth to invest tend to spend more as they earn more to keep their life floating. Their driving force is to work and consume and their spending is driven by other people’s opinion. Wealth creators, as Waceke notes, have other motives.
“Wealth creators invest more as thy earn more and in the process their assets multiply. The assets are the financiers of luxury trips and holidays and they don’t need to dig into their pockets since their trips are already catered for.”
These people deny themselves luxuries for future glory, with their lives starting from modest and then growing as their assets multiply. Their spending is driven by personal values and choices and they avoid bad debts like securing a loan to buy a car.
To all those willing to start saving, it’s not too late. You need to work out how your budget and see how much you can afford to save. Set and start gearing your efforts towards achieving your savings goal. Don’t keep your money in the bank. Don’t save or invest after spending.
No matter how small you savings account is now with disciplined cost cutting and wise stewardship, you can be incredibly wealthy someday.
