Money & the psychology of money
If you start employment at the age of 25 with the intention of retiring at the age of 65, you only have 40 years of active work. During these forty years, a lot has to happen. You start this period being broke, if you are lucky. If you are not that lucky, you start these years in debt. If you are starting your active employment with education loans or some other loans, you are already behind at the start. Happiest are those who will start this period not only without loans, but with some savings or investments.
There is a phenomenon among Africans, that in South Africa has been dubbed, “black tax”. This phenomenon is the idea that for a black professional starting to work, they will have to spend the first few years of their employment “righting the wrongs” of poverty from whence they came.
They are of course not compelled by statute, so in reality this cannot and should not be called “tax”. Tax is a burdensome responsibility of the citizenry. “Black tax” is a social responsibility. If you grew up in less than pristine conditions, and conditions of poverty, when you start to work, it is automatic that you would want to “right this wrong”. This may include such projects as building your parents a decent home; picking up where your parents left off in paying for your siblings’ education; supporting an extended family; etc. These are by no means small projects.
No one starts off with enough resources to take care of these, so, naturally, they are financed by debt. Added to all these is the social pressure for the professional to look the part of a professional. This may include exorbitant rentals in the “right” neighborhood for the professional, as well as the right lifestyle including “the right” vehicle, furniture, clothing, and the like.
For a professional who doesn’t plan for this “black tax”, they may pay it for the majority of their working years. What should a professional do?
The first thing is to be aware of this responsibility. Be aware that you only have a finite time of up to 40 years of active employment in which you need to prepare for your own retirement time. Deliberately dedicate only a portion of this period to paying your ‘black tax’. Do not try to solve all the problems of your past; they took generations to create, and cannot be wiped out in one generation. Don’t bite more than you can chew. A huge portion of these 40 years has to be dedicated to your own life.
In these forty years, you will have to build your own home for your own “nuclear” family. You will have to educate your own children. You will have to invest for your own future. If you ignore to build this portion of yourself, the “generational curse” will continue, and your children will have to carry the responsibility of “righting their past”, meaning you.