MoneySkills with Nelson Letshwene

Money & the psychology of money

Are you riding to your success or your failure?

There is so much pressure in life that most people can’t pay attention to the call of the future. It was Warren Buffet who said “do not invest what is left over after spending, rather spend what is left after investing.” With the pressures that the middle class face, this seems like an impossible advice to implement. What is the real source of this problem?
The real problem is that young people don’t invest, rather they become expert spenders. By the time they “start life” and choose to “settle down”, they are already in the red. They start life with a negative balance. They drive on credit; talk on credit; sleep on credit; eat on credit; and even get married on credit. By the time their first child is born, she is born into an indebted household, sometimes even delivered on credit in a private hospital.
In places like the USA, young professional start their professional lives with college loans on their back. And perhaps this curse becomes a blessing because some realise that all they want to shrug off is the debt, so that they can start living. Once they pay this off some are acutely aware of the need to invest and build a nest egg before they start living. Those who never come to this realisation sink further into debt.
In Botswana, because of the government paying tertiary fees, most students come off the block not knowing what debt is, and they rapidly build it up in the first three to five years of their working lives. By the time they realise that they’re really in debt, they have one or two children, which is literally an eighteen to twenty-five year commitment which they cannot shrug off. Under these circumstances, unless the job market can supply more money than can be consumed, the focus is survival. There’s not a lot of room for prosperity in survival.
The ones who will overcome survival to prosperity are those who will exercise strict financial discipline and follow investment principles. Making a decision to stop digging oneself further into debt is one such decision. Making a decision to increase one’s income by applying multiple streams of income principles is another way out. This is creating additional streams of income beyond what the formal job market can provide.
Discipline and Creativity are key ingredients. Learning how to grow money by following prudent investment principles is the roadmap. Many older people come to realise that “forced” investments like pension are not enough simply because they paid lip service to it and did not take advantage of the power of compound interest while they had time, by putting more money towards their retirement.
Just like most things that nations come to realise, whether it be the failure of national teams to perform on a world stage, or economies to fail to create jobs, is that these things need development while “they’re still young”. Personal financial education is really a life skill that must be acquired at an early age. Otherwise, as adults, we are left to invest only left overs, if any.
It is therefore incumbent upon every parent, whether you know about money or not, to start buying financial education books and encouraging your children to read them. There is no point blaming the school systems for not teaching financial education, because the teachers too, can only teach what they know. This, must begin at home. Make a decision to start populating your home with personal finance books and magazines.


3 comments on “Are you riding to your success or your failure?

  1. Sebele Atar
    March 13, 2015

    Powerful article indeed! I am on my journey to escape financial illiteracy. A decision i made two years back.


  2. puleng
    December 19, 2015

    insightful.sometimes the money is there,the problem is how to use it properly


  3. Ronald Thebe
    June 28, 2016

    Very much enlightening, thanks! You have since stopped writing the articles or what? I have not seen any new write-up by you in 2016 …


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This entry was posted on March 12, 2015 by in Debt Management, Essay, Personal Finance and tagged , , , , .

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