“I am highly indebted” said one of my friends ”I have a debt with a family member, friends, colleagues at work and I also got into mobile app loans. Even right now, I have a debt with the mobile operators, I prefer for you to initiate and I withdraw from an agent. I am in a total mess, How can I get out of this?”

Photo From Jaspreet Singh Mail

By Arthur Moses Opio 

"This recent surge in global debt (since the pandemic)," says Jaspreet Singh, "is the largest, fastest, and most widespread increase since World War II."

Debt might be inevitable but we can avoid the debt trap.

“I am highly indebted” said one of my friends ”I have a debt with a family member, friends, colleagues at work and I also got into mobile app loans. Even right now, I have a debt with the mobile operators, I prefer for you to initiate and I withdraw from an agent. I am in a total mess, How can I get out of this?”

You are a target and how is this happening. They put it in your face, they message you to tell you need it, they give you offers of increased loan limits. Yes, that is the debt trap we are in. As a man, debt might be inevitable but you need next level discipline on how to manage it. 

I borrowed some money before, it’s easy getting it but it’s never nice paying back but yes a responsible person must pay his debt to ensure he or she is credit worthy with friends, family and different institutions.

Statistics:

We all know that our public debt has risen and it’s not quite good but I might be wrong, at least what I have seen reported in the papers that children not born already owe 1 million Uganda shillings all stem to an issue of debt management. 

On Monday, April 26, 2021 an article came out on Daily Monitor saying, "Each Ugandan now owes Shs1.5m as national debt hits Shs65trn."

On Monday, April 19, 2021, a headline came out in Daily Monitor saying, "MTN clients borrowed Shs435b  in mobile money loans in 2020"  - The writer said, there was, "Increased appetite for short term credit." Another wrote on, Tuesday, April 11, 2023, "MTN lending grows to Shs401b, moving to within some commercial bank levels." 

On March 04, 2024 Another article came out, "MTN targets to lend Shs1 trillion in mobile money users with business loans”The reporter further mentioned, "The target is double the Shs550b, which MTN at the weekend indicated had been advanced to customers in the period ending December 2023.".

Now, enough of the statistics, the question I have is, "Who is being targeted?" Your guess is as good as mine. I get a lot of unsolicited messages from the operators to get a mobile loan, even when I have never, they increased my loan limit. 

You see the more I market something, the more it becomes normal and that’s part of the strategy any influential entity will employ. What we do today stems down to what we heard, what we have seen and the specific incidents we have been in. 

I have seen how due to huge debt, someone’s life savings got wiped

Now, you can do this to get out of debt, they are suggestions, but you might have more tricks:

1. Make a list of all your creditors.
2. Prioritise debt owed to employees or subordinates.
3. Pay off the debt with the highest interest.
4. Take the initiative to pay off your debt or at least to negotiate with your creditors: “Do not wait until they are looking for you, have a plan detailing your circumstances, when and how much you will pay them.” says DSA.

On top of that, ensure you have an emergency fund (at least UGX 1,000,000), try and build it before so that incase of any issues while tackling the debt, you have a fall back position. You can use the debt snowball method or Avalanche.

UGX 1,000,000 Emergency Fund Challenge:

You can join my challenge of building an emergency fund of UGX 1,000,000. You can use the bank, money market fund like @Xeno, UAP, Sanlam, Britam, etc.

• If we are to divide that money by 12 months, we will need UGX 83,333.33 per month (We can easily spend this kind of money on a woman every month.)
• Divide 83,333.33 by 30 days , we will need UGX 2,777.77. When it’s broken down this way, 1m can’t be compared to UGX 2,777.77 - now that’s easy to deal with.
• Now that amount of money is what many of us spend on Kikomando(Chapati & beans), airtime, rolex, gonja and this means, the UGX 1,000,000 Emergency Fund can be hit in the shortest time possible. We normally do lunch of 5k, 10k, 15k - Some even do CJs, or KFS of 45k and 50k weekly, so why not build this financial base today so that we can have cushion capital. Your emergency fund is like your Insurance , look at it that way. 
• We only need a mental shift. Instead of Rolex(Chapati & Eggs), breakfast or lunch of 10k, put that in the emergency fund, remember you only need close to 3k everyday to reach the UGX 1,000,000 challenge . This is possible. Let’s do it. It’s not enough to know, You must start.
• You can start by packing lunch, eating one or two meals a day. Balancing from your shopping can also go into your emergency pot.

Debt holds back a lot of money that can be used to build your wealth. 

"A booming economy means consumers are spending money, businesses are seeing growing revenues, and investors are getting bigger profits." Jaspreet said, "In fact, it benefits the economic system (in the short term) when consumers go deep into debt to spend money." He further mentioned, "Please note, it is not your patriotic duty to be broke to stimulate the economy."

You could be someone who has used debt well to build yourself, I cheer you on. But for many who are stuck, the best thing is to stop being a slave, you can’t owe everyone(family, friends, colleagues, neighbours) and institutions. You could either lose your reputation, life, property or get jailed. Be on top of this money thing.

Remember personal finance is 80% behaviour and 20% head knowledge. 

Don’t try and solve behavioural issues in a mathematical way, start by fixing your behaviour.

Very few Ugandans are confident in their financial situation ~ Finscope Report(2023)

AI generated Picture

By Arthur Moses Opio

I kept asking myself whether I should pen this down or not. Let me start with this question, "Are you confident in your financial situation?” For me, my answer is a straight NO and it’s down to many factors. A majority of the factors are external and being in what Kiyosaki termed the rat race just makes it even worse. 

The Finsope report I have been reading says, 

"Very few Ugandans are confident in their financial situation. Only 11% are satisfied with their financial situation. 60% of adult Ugandans are not confident in their financial plans for old age.”

These are some of the things that breed low confidence in the financial situation many of us are in [Some Excerpts Are From The Book, How To Secure Your Financial Future by Dr. Sunday Adelaja]

1. Lack of financial education(Education system designed to only create employees): We have gone through school and many of us have never had a curriculum about money. In fact we know too few things about money that when the topic is raised, it is a taboo.
2. We are looking for miracles (We even have to sow seeds to twist the arm of God): Don’t get me wrong miracles do happen but more than ever, we need people to know that it’s through diligence and working (exchanging your time or skills for an income) that many of us have to embody. We might argue and say, ah! My family and friends have got my back. How long can that be sustained? Emergencies keep coming.
3. We have financial goals but many of them are not clear, they are vague: e.g I want to earn 10m, how can that happen if it’s not specific. We have no strong reasons to even backup why we need the 10m. 
4. We don’t pay ourselves: When we get paid, we pay everyone else but ourselves. The solution is to put yourself on the payroll.
5. We are not part of a supportive environment: Our environments determine a lot how we interact with this money thing. So many years ago, a colleague pushed me to get a loan but I got denied. No one was pushing me to invest but I was just being told, since you earn a salary you can get a loan but for what.
6. The world system is a trap in itself - Imagine, we try so much to keep up like the Jones, David’s and Michael’s: We have basically bench marked our lives against so and so, it’s even worse if they are on social media and we don’t know them personally. I imagine the village man has less money pressures, he can’t go homeless because he has built his hut but here in the city where we can’t grow food, you pay for almost everything, without money, life sacks,  in the US, people go homeless.
7. Celebrities: We have a dominant culture that celebrate Celebrities. In the previous years, everyone wanted to be like Mike, so we were sold AIR Jordans and to have one was to show that you have arrived. DSA says, "Advertisers and companies parade them and use them to sell products. They know the culture has esteemed these athletes so much, everybody wants to be like them. Advertisers have used campaigns like “BE LIKE MIKE” to sell us shoes and other products because they knew people wanted to be like the legendary American basketball player Michael Jordan. Even entrepreneurs who have made billions within 5 to 10 years are constantly in the news. We are always told how much they are worth and the size of the companies they have built. They have superstar status around the world. They are ranked in world famous magazines such as Forbes in order of their wealth; the one with the highest net worth is ranked first. As a result, many people are living for achievements, to make money so that they too can be celebrated.”
8. Debt Trap: The argument of debt is not one many of us can win. Yours truly was educated through loans and I think the gist of the matter comes down to management. I would argue not to go for it unless you are getting to top up on something you have already started and need a boost but I might be wrong and stand to be corrected. I just know debt can be one huge trap. Banks are aggressive in Marketing debt products. To wed, there are now loans ready to be quickly cashed in. I will share a few stats on debt later on.

We need to do soul searching to help us in this area. If only 11% of Ugandans are confident of their financial situation then how about the 89%. Many of us are in the 89% bracket but the good news is the knowledge is there. Over the weekend while having a chat with a couple, one of them remarked and said, "I have the plans, the only problem has been execution. What I learn from your talk is that I must get out and execute."

I once learnt that, "The only way to permanently change the temperature in the room," said T. Harv Eker, "is to reset the thermostat. In the same way, the only way to change your level of financial success ‘permanently’ is to reset your financial thermostat.”

I got a message from a follower on X and this is what he said,

"I am grateful for your guidance into @XenoUganda. I have experienced growth personally and with my family on the values of savings and investment. Not only me, but My friends and relatives are Learning with me as well"

How we respond to external factors is also key in developing confidence. The stoic Marcus Aurelius says, "You have power over your mind, not outside events. Realise this, and you will find strength." - It is also written in the scripture, "As a man thinks so is he." So yes, we can only control our mind. Like my friend who decided to ask about Xeno, learn and start investing, his testimony is clear that he has experienced growth.

So let us build our financial confidence by reseting, by dealing with the root not the fruit. Let God guide you and I as we do our self reflection.

70% Ugandans survive on borrowing - FSD Uganda Study

Photo by Towfiqu barbhuiya on Unsplash

By Arthur Moses Opio

We all read that statement that was screaming on the Daily Monitor news paper on 15 April, 2024. The report is based on a study by FSD Uganda and it said, "Seven out of every 10 Ugandans were operating a personal budget deficit(needing more money to than they are earning to cover their personal budget" Now, 70% is huge. What are the 30% doing that the 70% aren’t doing? The report continued to say, "More Ugandans are relying on their family and friends, personal savings, and borrowing to manage their budget deficits than was the case in 2018."

What’s notable in this, is that Ugandan’s have personal savings and compared to 2018, 60% of Ugandans are now saving which is a good thing. In their 2017 SDG report, Afro Barometer said, "Ugandan’s saving rate was at 12% compared to Kenya(23%), Rwanda (18%) and Tanzania (13%)" Generally we have been doing badly. I need to find out what our stand is currently but an improvement of 60% should be applauded. 

But saving is not enough, it is the first step. Even if savings is up. Finscope report says, "Most Ugandans are not managing their budgets well." and failure to manage picks into things like extensive borrowing to meet a budgeting deficit as stated above. If you are lucky to have personal savings that is good, then the only worry is that you are probably eating into your wealth building tool. Savings should be categorised, emergency savings and investment savings. 

You can make and save money, but if you are having more months than money, the problem is not the income. It's your money management. We have to develop high income skills levels to enable us manage this money resource well. 

Paul Busharizi once wrote an article titled, "Perpetuating the poverty among the elite" and said, "There is the Urban legend of the manager who cannot make his salary stretch to the end of the month, while his driver who earns a fraction of his salary, not only gets to the end of the month, but has enough left over to invest in his growing empire of mizigo rentals." He further said, "The difference between the two men is that the boss is focused on consumption lifestyle while the driver is focused on investing. And that is the crux of the matter. There are only two ways to spend your money, you either “eat” it or invest it."

There is no doubt economic times are hard but we have to be smarter. Money management is a skill that we all must harness. Even if we are doing fairly well, we must keep learning to avoid slipping back. So manage whatever little  money you have well. It's a much needed skill. We are all victims of poor financial management but we can be better.

So these are some of the things the 30% are doing:

1. They have financial goals.
2. They have a financial plan.
3. They have a budget.
4. They track their expenses
5. They live below and within their means
6. They are investing in appreciating assets like Bonds, Treasury Bills, Fixed Deposits, Unit Trusts that offer at least 10%. They know there is a limit to how much they can cut their expenses, so they focus on increasing their means.
7. They are involved in producing goods and services. If they aren’t directly producing, they own shares of companies that are producing goods and services.

So once again, I remind us, let us build that emergency fund. UGX 1,000,000 is a good target to begin with. In case of a challenge, you will have that as your first rescue point. It is your fire extinguisher, you need it badly, I badly need it. 

Don’t ignore the power of putting 10,000 UGX aside, if you do it for 7 days, that’s already 70,000 in your emergency pot. XENO CIS allows you to save as low as 10,000 UGX, you can dial *165*5*7# my referral code is XENO84105. 

For more information about XENO click this link.

Peril of Poor Money Management: I Was Careless and Foolish

Photo by John Moeses Bauan on Unsplash

"Wealthy people manage money well while poor people mismanage money well." ~ T. Harv Ever

Not managing money well can make life as hard as a rock. Joshua not real name always took a lazyfe approach towards the things he did in life including money management. He often received money, used it without planning or accounting for it. He never tracked his money to know what he spent on. He got a good paying job and he was their accountant. The job of an accountant comes with a lot of responsibility. To cut the long story short, his bad habits of poor money management at an individual level got the best of him. At some point he couldn't account for company funds, this made him lose his job. The job loss was one of the hardest things that happened to him. It was a wake up call and he had to go through rewiring and reprogramming his financial habits and mindset.

Isaac a friend to a friend always says, “I am never with money even when salary comes in, it goes quickly without any major developments.” All this points to his financial management. Is it an upbringing issue or stubbornness?

When T. Harv Eker says, "Wealthy people manage money well while poor people mismanage money well," he is speaking of a high level financial skill and money mindset that we all need to have. 

Our mindsets and habits have been wired by what we have heard, seen or specific incidents that have happened to us from childhood. We need awareness, understanding, reprogramming and reconditioning to make great changes. Money management cannot change unless we change.

Two Stories: Callie and William

From his book Poverty Mindset vs Abundance Mindset, Dr. Sunday Adelaja shares a story of Callie Rogers. She was Britain’s youngest-ever lottery winner who wasted away her money on drugs, booze and cosmetic surgery. It is said, she became so depressed, she even (allegedly) attempted suicide three times. Adelaja writes, "Rogers was introduced to cocaine by a boyfriend and spent over $400,000 on the drug in six years before getting clean. She also got breast implants, fancy cars and more. Rogers was so broke, she could not even afford to have favorite gift for just 99 cents! Now that Rogers is broke, she’s back home living with her parents and works as a maid." 

Adelaja shares another story about William “Bud” Post: He writes, "You would think winning the lottery for $16.2 million would be a dream come true. But like almost every other case, it soon turned into hell on earth. William “Bud” Post had just $2.46 in his bank account. He just finished serving 28 days prison term. To afford lottery ticket, Post sold a ring for $40 and purchased 40 lotto tickets. Two weeks after winning, Post went on a spending spree... spending more than $300,000 on buying a restaurant, a used-car lot and an airplane. William “Bud” Post died 18 years after his big win. He admitted he was both careless and foolish, trying to please his family. He eventually declared bankruptcy and died with over a million dollars indebtedness. He allegedly remarked that “I was much happier when I was broke.”

With those two stories with sad endings, money management must be over emphasised and one must understand what money is, know their financial blueprint to avoid having such endings.

Have a System

For people who manage money well. One of the key things they have is a system. James Clear shares from his book Atomic Habits and says,  "We don't rise to the level of our goals but we fall to the level of our systems."

A system is very important in ensuring we have the blueprint or the foundation to enable us build the house or houses that will last for years to come.

In his book System Building: The key to resolving every problem and attaining every goal Dr. Sunday Adelaja says, "The lack of understanding of a systematic approach to resolving different problems makes a majority of us attempt to use our strengths to solve every problem that comes our way but always fail. As a result, we stupidly waste our energy, we get tired frequently, disillusioned, and depressed by our low results and general inefficiency in life."Often, this kind of life leads to nervous stress and negative effects on our health.

Relating this to money management. The ANTS have a system and in their system they know there is summer where they do the harvest and winter where there is no activity. It is written they have no ruler, governor but they work together to ensure they gather and store. What do you do in your earning years/time? When Joseph knew there would be 7 years of famine, he was made governor and asked for a fifth of the produce(20%). It is prudent for you to set your financial system in order in this year 2024. Could it be the 50/30/20 rule? Whatever it is, have a system.

It is important to know how you are going to earn, save, invest, budget, track expenditures and give to the people who will need it. 

Some people only have a system/blueprint of spending. Whatever money they earn, they are thinking about the next hangout, party, clothes, shoes, car, etc. Paul Busharizi says, "If your spending was biased towards consumption and away from investment, you are barely making ends meet, regardless of your salary. If on the other hand your spending was biased towards investment and away from spending, you probably are better off than the average person around you."

This reminds me of Proverbs 21:20 - "The wise have wealth and luxury but fools spend whatever they get." As part of your money management, your desire should be to have wealth and how do we get wealth, it comes through investing. 

In your system, investing must be part of it just like we are taught in the parable of the talents. If you want to be the fool who mismanages money well, it's written that as the money comes in it gets out fast, its spent in every way possible. 

Don't be a fool. William "Bud" Post said, "I was careless and foolish." Be wise. Your wisdom will reward you.

Paul Busharizi says, "Eating our money provides instant gratification and also has the added bonus of making us “look” rich. While investing our money, not only will the benefits come sometime down the road but also chances are people will not know about it and therefore will not know that we are rich."

In his book the Psychology of money, Morgan Housel says that, "Wealth is hidden, it is not seen." There are so many people who are flamboyantly buying this and that to try and show off and they following every one who posts things on social media, you are keeping up with the Joneses but your pocket is not keeping up with them, You are broke! and you will continue to be broke and it will show even in your latter years. Paul says, "While investing our money, not only will the benefits come sometime down the road but also chances are people will not know about it and therefore will not know that we are rich."

You have to ensure that instant gratification is dealt with, not trying to show off because who cares, just care about yourself and do the right things to cater for your future. 

In his book Things Fall Apart, Chinua Achebe says,  

"He always said that whenever he saw a dead man's mouth, he saw the folly of not eating what one had in one's life time. Unoka was, of course, a debtor and owed every neighbour some money, from a few cowries to quite substantial amounts."

Don't be like UNOKA, he was;

• Lazy
• Poor and couldn't provide for his family
• Heavily indebted.

"In his day he was lazy and improvident and was quite incapable of thinking about tomorrow. If any money came his way, It seldom did, he immediately bought gourds of palm-wine."

Manage your money well. The end is predictable. The wise have wealth and luxury while fools have nothing(they spend whatever they get.) 

What Decisions Are You Going To Make With Your Money Post Covid.

Photo by Sharon McCutcheon on Unsplash

Proverbs 21:20 NLT "The wise have wealth and luxury but fools spend whatever they get" 
Prov 21:20 TLB version. "The wise man saves for the future,[d] but the foolish man spends whatever he gets."

I don't want to continue being a FOOL. This is my post COVID decision.

Are you the type who earns very good monthly, daily, quarterly, and still finds themselves broke. You live from paycheck to paycheck. Yeah, you aren't alone, so many of us are in this bracket, we aren't poor but in the long run, our money decisions will lead us to poverty.

One of the surest ways to poverty that is well known is to try and please people, who don't care and even know how you hustle to get that dime.

Poverty isn't necessarily a lack of money, it involves many things like lack of skill, not having the mind to see opportunities, always waiting to be shown the way instead of using the knowledge out there and within us to craft the way. There people who are so poor all they have is money, however, most times the money is consumer debt that they keep paying to rescue themselves.

During this Covid19 period, many people who have very good jobs or businesses have been caught on the wrong side of their financial decisions. 

You will find 90% have been operating without emergency funds, it's probably because we think hard times won't come, yet history teaches us to rather be prepared other than just being there waiting for someone else to prepare us, you know even for the return of Jesus, we have to prepare lest we are caught on the side like the five virgins who had no oil left in their lamps. 

In this time many of us have looked back and said, hey, "I wasted so much money on luxuries, I wasted so much money on trying to live the good life, now I am here and the vendor on the street who from her little earnings has made some savings or investment is doing so much better than me".

Don't be shocked when we get back to the new normal, and we see many of us indulge in getting quick loans to fix temporary problems. This COVID period should teach many of us, to manage finances well and be good stewards of it. We also won't be shocked to see people selling off land to fix a temporary problem, many times our problems are consumption in nature and not investment. This is an uphill battle that can be fixed but it will require a lot of learning and unlearning.

It would be good to sit and reflect on how you and I are going to get better. The first thing to do is to start getting financial education. You know education that starts with you desiring to solve a problem you have is the most liberating.

Elinor Sauerwein was a teacher and a cook. Her story is one of uniqueness, she did not have a high-income paying job, but at the time of her death, she had almost 2 million USD. A big chunk of her money was given by her estate to the SALVATION ARMY. One of the key things I have learned from her story is that she was taught never to waste anything, her levels of being frugal were quite extreme to a point where her neighbors thought she and her husband were poor but their sole goal was to be a blessing to the salvation army. 

Many of us know what salvation army does if you don't look it up on the internet. So while we won't waste going forward, have a clear goal for your finances just like this lady I have written about. God bless.

#Transform #Impact #Empower