3 Things I have learnt from The Concept of Paying Yourself

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COVID 19 has taken a big toll on many people's finances. For those who have been prudent with their money, having emergency funds or even investments, somehow are navigating this COVID storm. The wise people who paid themselves are clearly seeing the benefit and as Lockdowns are being eased world over, getting this piece of financial education and living by the principles could help many of us. I once read somewhere that a wise man sees danger and takes precaution, so I can firmly say that another crisis will befall us but we need to take the lessons in this period and have them at heart.

Whenever we walk into a mall, grocery shop, we are paying the owners of the business. When we pay utility bills or rent, we pay the utility companies and the landlords. Yes, money moves faster than it came in and the only missing link on the payment schedule is you and I. How can we pay ourselves? to avoid living from one income to another, to break the cycle of being broke at the end of the month or day, some people have more months at the end than money.

“When you don’t pay yourself, you are trapped working for others” – Dr. Sunday Adelaja

John a young man in his mid-30’s earns 1000 Usd a month. However, whenever the month ends, he is always saying, he can’t wait for his end of month payment and this is because his account is bleeding and if the payment doesn’t come in the shortest time possible, he will have to borrow to enable him to survive as he awaits his payment. John shouldn’t be experiencing financial difficulty with the amount of the money he earns but his situation isn’t different from many people who live from paycheck to paycheck. With that amount of money, you would expect John to be more financially secure but a Janitor or waiter who earns 80 to 100 Usd and has been paying his or herself could be doing so much better than John.

While reading an article from Medium.com by Nicolas Cole about “5 serious things you should know about money before you turn 30”, at the age of 23, he sought out a family friend who was a trader and money expert to be taught about money, from one of his points, he mentioned that the fastest way to start saving and investing money is to “Tax” yourself. I hadn’t had of the concept of taxing oneself but I read through and said this is a good concept or analogy.

"We normally pay taxes to the government but never to ourselves" he said. He reiterated by saying that, “When trying to build wealth for yourself, habits are more important than “quick, high-yield investments”. I totally agree with that concept because the Get-rich-quick mentality has burned many hands, spoilt many relationships, and destroyed many people’s financial futures. To analogize the “Tax” concept, he quoted O’Leary who wrote the book, “Truth On Men, Women, and Money: 50 Common Money Mistakes and How To Fix Them”- O’Leary says people really struggle to save or invest money because they live in a constant state of thinking they don’t have enough money, to begin with. He said that O’Leary said that if one-day Government decided everyone was going to be taxed $100 per month, then people would somehow figure out how to get an extra $100 per month. Nicolas says someone would pick a side hustle, choose to eat out a few times or make sacrifices that reduce expenses so that the $100 can be realized. So Nicolas’ question is why not self-impose that same tax and pay yourself?

From the Book, “How To Secure Your Financial Future” by Dr. Sunday Adelaja, here are a list of 3 key points I learn about the concept of paying yourself, this can be applied by anyone who earns a monthly, daily or quarterly income, it can also apply to those who have no money at all.

1 Having a salary or an income is not equal to paying yourself

Dr. Sunday Adelaja says that the first thing that happens when your income is allocated to you is that the Government pays itself, through taxes. Depending on your country or workplace, there could be other deductions like loan payments, insurance, social security, union or association fees, etc. He reiterated and said that even pensions that are removed from your income aren’t enough when you retire.

2 To pay yourself does not mean to “REWARD” yourself by buying yourself liabilities that stroke your ego

Because people work so hard, normally a vacation is a perfect way to reward themselves. Dr. Sunday says that isn’t paying yourself. He says paying yourself means you must acquire assets and reduce liabilities. Dr. Sunday explains this concept based on the character Raj and says that. “If Raj had saved the vacation money and took his family on a more modest holiday, he would have been able to set aside over $10,000 to buy assets. Liabilities are those things that take money from you. When you put aside money for your future you are paying yourself and building a secured financial future. When you set aside money for your children’s future; for school fees and such, you are paying yourself.

 3 Paying yourself is not limited only to those who are employed

Dr. Sunday says small and medium enterprises make up the larger part of the economic growth across Africa and developing countries. He says some people do work as freelance and don’t have a regular income but to be able to secure one’s financial future, they need to know their necessary expenses at a given month and hence save all amounts above one’s necessary expenses. He says when income is low in low seasons, it necessitates why someone has to build passive income from investments so that relying on one income isn’t the norm. He encourages people to pay themselves by putting aside 30% towards future savings and investment.

#Transform #Impact #Empower

Covid19 and Personal Finances

Where is your money going?

When total lockdowns started happening, so many things came to a stop. Movements were restricted except for personnel going to buy home groceries.

People normally spend their money on things like entertainment, concerts, etc. But for now all that has been shut down. People now need to use this time to educate themselves rather than be entertained.

The question I would ask now is, Where is your money going? Are you saving more or there is nothing to save at all since it is basically survival for now?

I read an article from CBC, entitled 'I'm spending way less': The caption says that the lockdown is leading to more savings for some Canadians. I don't know how it is for you wherever you are and in whatever country. Surely back here in Uganda, so many things have slowed down and I could say on a personal note, I have saved on travel since I can only walk or drive somedays to the nearest supermarket. I last fuelled the car with $27.

In their article Max Miller said, she is spending less with the exception of groceries but most of her discretionary expenses are almost zero. Another person, Jo-ann Trunzo said, their account balance was much higher and that they realized they don't go out for dinner or shopping and that it's amazing to realize how much money you spend that you really don't need too. For some people, I also know their account balance could be less or non-existent since they work every day and it's a hand to mouth affair. There are people who don't even have emergency savings at all. This situation has hit hard in so many places world over.

What I have Heard Other Households Say

When the Lockdown was looming, people went into panic buying and I remember telling people to buy but to also know that what they buy would eventually get spent. However, the word SAVE has resonated on the mouths of people, others have said, we won't waste. In Uganda, people have a practice of throwing away food and this is because we know we have plenty of it. But that attitude of wastefulness can hurt in the long run especially in hard times like this. 

Some of the people I know have chosen to plant food in empty plots or in sacks around their homes, some have learned how to bake bread, cakes, etc. so that they don't have to buy it from the grocery store. We only hope that this will become the new normal however, we also know that old habits die hard but it will take serious discipline.

So right now it would be good to ask yourself, where can I put the monies I had previously budgeted for. For me personally, I am thinking of putting my travel money into an investment like myxeno.com so that it can be invested. Travel money has been one of my biggest expenditures. You know we have to move from saving to investing, I am quite certain so many people know how to save, but to grow wealth the game-changer comes in investing. 

Many of us are baby boomers, Millenials and we can't let the consumer mentality continue to rob us. The good thing is the Lockdown doesn't require us to dress our best to show off, doesn't require us to drive to show off, right now is a time for mindset shifts and it would be good 

"Don't let the fear of the time it will take to accomplish something stand in the way of your doing it. The time will pass anyway; we might just as well put that passing time to the best possible use." - Earl Nightingale

Time To Restrategize 

• If you can pay off your debt.
• Convert your time into tangible products, Jim Rohn once said, "Time is more valuable than money, you can get more money but you cannot get more time"
• Determine what your needs are and focus on them, cut off wants for now.
• Grow your own food, if you can, it's high time we started using empty containers to grow food especially here in Uganda.
• Start thinking long term by putting aside money to invest, if you don't know where or what to invest in, save the money in myxeno.com because at least it won't just be saving but it will grow since it will be invested.
• Start envisioning your future post covid19, life won't be the same, there will be a new normal, somethings will change for good but what needs to change with you is your attitude towards money and how you will beat the trap of consumerism. Many people have realized that there are many things they don't need that are stacked up in their house and this is the time to declutter.

Invest In A High-Income Skill

More than ever, you and I need to invest in a high-income skill, we need to learn more about money than ever before. Dan Lok once said we don't have a money problem, we have a skill problem. A high-income skill comes through learning and applying what you have learned. It's not good enough for us to have all the knowledge on money and not use it. It is like theoretically knowing how to drive but never getting into the car to actually drive it.

Helping The Youth Understand Personal Finance

Satisfaction Comes From Helping others

For a whole month now, I have been interacting with the youth in S.6 Vacation at Bugolobi Church. We have had an interesting talk on personal finance, the series ended yesterday and we dealt so much about habits and mindset change. The testimonies that came in yesterday were so amazing. These young guys are determined to do whatever it takes to improve in this area starting now.

Everything else is taught in school except financial literacy. I never had the opportunity of being taught about money, the only thing I would hear from my dad is that, "Money isn't picked from trees".

When we use the Jewish model of teaching the young people, we are preparing them for now and the future.

In his book, SMART MONEY, SMART KIDS, Dave Ramsey talks about a middle aged lady who walked up to him after he had just finished a seminar talk on Financial Peace. In this book he writes, 

" I’m sure as that first person—a middle-aged woman—walked up to the book table, she saw a young speaker relieved that his big speech was finished. I will never forget her comment. Holding my little book, she looked at me and said, “Dave, that was great information. Why don’t parents teach their children about money? Why don’t we teach basic money skills like this in schools? Our kids need to know this information.” "

Indeed Children, Youth, Young Adults are being taught everything else and this is one part that is almost forgotten. I believe that if we raise young people who are disciplined, corrupt tendencies will be dealt with, laziness will be dealt with etc

"From age five on, I operated on one general rule about making money: Work, get paid; don’t work, don’t get paid. That’s a basic principle that a lot of parents miss with their little kids. If a child can understand that money comes from work at age four, then she’ll be ready to hit the “real world” running at age twenty-four" -Rachel Cruze "

Nanjira Daphine, Awana Aitaa Carl Laban, Fortunate Ashabire, Joel Kadaya, Mich Mitchell are some of the young people I have had some good time with. They are already budgeting, planning, putting aside the little change, gaining skills like making bungles, T-shirts, etc

In the Picture, they were watching a short video by Myles Munroe 

Check out the video they were watching 

#Impact #Empower #Transform

Money Shouldn't Be Your Master.

The love for money over the ages has strongly taken root in the lives of both the young and old people.

Young children are growing in a culture where they believe everything comes with the press of a button, to make it worse parents are not doing much to tame their appetite for things, the schools they go to are also fueling the lifestyle of spending like crazy on different activities that appear on the school curricular.

People have chosen to serve money rather than money serve them, we know how important money is but we know that it's grip upon our lives has caused a lot of damage. This love for money has led to a self-centered life, people want to accumulate everything for themselves, it is good to have things but if you are possessed by them then the reality is that they are a god in your life.

Even the poor person who lacks money is doing whatever it takes to come out of that slump, however, the purpose for coming out of poverty is driven by the demands of showing off in society, being a somebody, people have engaged in drug trafficking, gambling (betting), illicit money deals like prostitution which sometimes isn't their choice but because it could help someone come out of poverty. People are doing money laundering. All kinds of bribery and corrupt deals are making those who already have to want even more so that they can be in control.

Some people believe that having a lot of money gives them status, the pride of life just takes a grip on them. They know that with money, they can be somebody, if the money is to show and not be used to transform your society then it's really a waste of time. Some of the people with the most money can even be in neighborhoods suffering and they need to be lifted up, they want to be begged to support any venture instead of coming out with what God has blessed them with to be a blessing. We should never hoard money, it should be used for the right purpose.

It has been said before that money is a bad master but a good servant. We all need to know that if we don't control this thing called money, it ends up controlling us. Some of the things that can tell you that money is controlling you, is:-

1. When you don't want to let go of it, it has a strong grip over
2. When you overthink about money and can do whatever it takes through corruption, bribery and many treacherous things to get it.
3. When you find yourself buying out of impulse, you left your home and went out to buy something on your budget however you came back with much more than you had planned for.
4. When you find your desire for the good life, achievements, possessions is ruling you, this has been fueled by the media and TV shows we watch, you end up watching this Reality Shows and you wonder when they will ever show when these guys are at work, the presumption then is that we can sit back and everything is OK, forgetting that we have to have work projects, engage in productivity etc. 
5. When you get a loan (Debt) to fuel a certain lifestyle even when your cash flows aren't the best, some end up borrowing from one place to another to settle different debt obligations, debt is one the biggest traps anyone can ever be in.

This is just to mention but a few.

When need to strongly know that if we put our trust in money, we have lost it all, the owner of all the money and other resources on this earth is God, so we must use money as a tool to achieve our purpose on this earth. You can't serve two masters, mammon and God. 

We are reminded by Solomon that we should only put our trust in God, there are many things we can do to put money under our authority.

Proverbs 11:28
Trust in your money and down you go!
But the godly flourish like leaves in spring.

#Impact #Empower #Transform

A Few Reflections When Faced With A Financial Crisis

I hope you are all doing well and enjoying the different resources that are being shared on this platform. You know it's not how much knowledge we have but how we use the knowledge - it's application is what brings transformation.

At the beginning of this year, I happened to be a witness to some truths about life. Where I do work, we hadn't been paid for some time and some allowances had also delayed for a long time and mind you, people had got loans best on the allowances that were to be paid and also the institution was closed indefinitely.

Despite people having salary loans, they also had loans from loan sharks and from colleagues within. The debt level increases because of multiple borrowing and also borrowing to service another debt.

When we were paid eventually some people were still indebted because of multiple borrowing since whoever was owed wanted to be paid there and then.

There a few lessons I learnt from this period in time.

1. Financial literacy is important

I have been reading up on articles from the likes of James Abola, First of all his book MAKE SENSE OF YOUR MONEY is one we must all have, you can get it from bookstores around or contact him by visiting this site for more. I have learnt about saving, budgeting, investing etc. Empowerment comes from what has been revealed, it's like searching for truth and you find it, it releases you there and then. 

I read his articles from prosper magazine, that's in the daily monitor. In that period, instead of waiting for salary or allowances, I resolved to do something instead of just sitting home doing nothing. I did some transport business and also continued (trading) selling yellow york eggs - you know this is passive income and it comes in handy. Some people sit back saying i have no work or nothing to do which basically means they have suspended their brains. We all have brains that need to be put to work.

2. Have an Emergency Fund 

I learnt the value of having an emergency fund. Of-course my wife and I already had one and it reminded me of what I have always heard, that it should be able to take you from 3-6 months of expenditure. It is good to be visionary, people who talk and write about these principles have so many reasons why, experience is the best teacher. Cutting out many luxurious things and having a mind of an entrepreneur is very important. Dave Ramsey teaches and says that you should build an emergency fund of $1000 which amounts to about 3 million Uganda Shillings plus depending on the dollar rate. By the way if you put your mind to it, its possible and it can bail you out in many tough moments.

3.Multiple Sources of Income

I learnt the importance of having multiple sources of income, because depending on one stream is total DISASTER as an individual, I explored SHARES even more. I bought my first shares many years ago in stanbic and recently i was called to see if i was getting my dividends, this encouraged me. I decided to buy in Umeme as well and this is in a way to widen my net. I am still thinking of more avenues, they are so many, I just need to understand what I am to invest in.

4. Work your way out of RENT

I also realized that many of the colleagues at the institution were renting just like me and the "CRYS" of the Land Lord knocking on their doors was the cry of the day, this taught me to start thinking of working on our goal of housing with my wife, we now have two young boys and things like shelter are a necessity, whatever it takes you have to provide it. 

Because of  many good practices, the Land Lord did not disturb us because my wife and I work together on our finances and this really is a STRENGTH because when one is down, the other lifts you up, and when we are all UP, it gives us the opportunity to do more. In the long run, we would love to become Land Lords and be on the receiving side. As I write this, we have made great strides on our shelter, and with time I will be sharing more about this.

5. One reading, One Seminar isn't enough, we need constant learning

I also got to realize that financial literacy is something people to need to hear more and more so that it can improve their lives, some people turn a deaf ear but you know its a choice at the end of the day if you want to see things change. My wife Martha and I are a big testimony of the things we learnt and put to practice and let me say this, these principles work, you just have to tell yourself, am going to do this, it will discipline you but you will learn and help others as well.

6. keep the right company

Always keep the right company, you will get good advise, wisdom to conquer many problems, if you are around negative energy, you end up complaining and doing nothing.

#Impact #Empower #Transform

The Long View Matters

The Long View Matters

One of the worst things in life is to be short sighted. When you are short sighted this means you can only see what is near and not what is far. When we plan our lives only thinking of today, we end up living for today but when we plan thinking of the future, whatever we do is on purpose and it has a long term tag to it. 

Some of the things that always are hard for people to put into practice is the habit of saving, I have often encouraged people to have a saving lifestyle and some will tell you such a thing isn't possible in the 21st century, people will still tell you, "I earn too little" or "My lifestyle can't be contained in a box, I have to live and enjoy life now because I can pass away anytime". Such narrow mindedness has made people do crazy things and spend their heads off, to make it worse, they live long enough to regret their mistakes when it is now too late.

I encourage someone out there to be wise in their actions. Dave Ramsey says, "Personal finance is 80% behavior and 20% head knowledge", Check out this link on make sense of saving here

Learn to sacrifice, learn to put some money aside for a rainy day and for a long term goal, of-course don't hoard money, don't serve but master it so that you can control what it should be used for instead of it telling you what to do. 

The story I am posting below is from Dave Ramsey's blog, be inspired by the story of these people, there are some points I listed below as a matter of what I see from their story line.

Points to note:

1. Think Long term - People without a vision perish or cast away restraint. Be goal oriented
2. Work on a budget - Be diligent in your spending plan and commit to it even when the desire to spend on luxuries is shooting through the roof (remember ask yourself if you really need that thing).
3. Grow slowly - Don't be in a rush to gain stuff, you could end up being corrupt in the name of getting rich. Dishonest wealth/riches dwindles away. Take it little by little.
4. Have Patience - It's one of the most important virtues
5. Don't grow wings, Don't be Proud - let your story inspire others and be a blessing to others, our life doesn't consist in our possessions

Check out this story and be inspired, Click here.

Decide Today, Make Those Sacrifices or Be Comfortable – There Is A Result

It’s is ironic how we are inclined to comfort, we normally want things the easy way and technology has done a great deal to bring comfort to people. While listening to a gentleman talk at a recent event, he mentioned something that gripped my heart and has stuck, he called it the rule of life and I thought I could share a few personal insights from this quote.

“Do the easy and comfortable and life will be difficult, do the difficult and uncomfortable and life will be easier”

When it comes to matters of personal finance, sometimes we will be excused for being young and naive because in most instances we either weren’t taught or we just put good advice away by saying "I will do this when I am earning this much" or "I will do this when I grow" etc. When we are young (age, physically, emotionally), we are bound to make a lot of mistakes like buying out of impulse, desiring to have the latest trends of things which in simple terms just enslave us. However, I want to bring hope and light to those who are reading this piece to encourage them that they can start all over to avoid making mistakes that many have made.

Life is About Sacrifices

Life is about sacrifices. I am encouraged by my mother who sacrificed a lot of things to make sure we had a good education. There are times she would say, “I am not having new clothes all the time, just because I want you to study.” These words touched me so deeply and there is a life lesson I learned and that is, the day you get children, you stop living and working for yourself but so much you do is for and about them. God bless my mother.

Working and Earning

When I started working and earning, there was pressure by my peers or just the corporate class to go chill out, hang out and just spend spend spend spend… and spend but I was already a grounded guy and knew what to do with money, however, this doesn’t mean I haven’t had my fair share of mistakes, and to me, they are learning points, Still, I have seen this evil under my eyes where a young corporate lady or guy will tell you that, I can’t save because I earn little, however, they are the same people hanging out every Friday or over the weekend and to make it worse they even borrow to sustain such a lifestyle, they do nothing to increase their money but do everything to spend it – how foolish. It is sad and we still see such things happen.

From my savings, the first mistake I made was to buy a car. I had two options in my mind and the other was to buy land. I did not buy the land and as much as I was happy with the car, I look back and regret that decision. I chose comfort at the expense of investing, who knows what that land would have done for me or my family, I was short-sighted and I encourage any out there to look beyond your comfort while making decisions, look at the bigger picture.

When we choose to do the difficult and uncomfortable things now, for example, saving for a rainy day, saving to invest or start a business and delaying gratification, or avoid to spend to impress someone who doesn’t have an ounce of care towards us or just trying to keep up with the status quo, it puts us in a place where we have control of certain things in our lives.

There so many difficult decisions in life that have to be taken, and such decisions aren’t based on how strong or how weak we are, they are based on the fact that we can see the end result or see the end from the beginning – that’s being visionary. Life is quite predictable and on a personal note, I think it stems down to the decisions we make in life keeping all other factors constant.

Decide Today

Decide today to live purposefully, to plan, have a vision, have a goal, decide to save and decide to invest; when you make such tough decisions now.

• You will be required to do away with certain things that you have been so hooked to.
• You will have to put some friends away and get those who are willing to make you grow.
• You will have to take the high road even if you are alone, along the way, you will find those who believe in your dream.
•  You will have to start living on purpose and not out of pressure to appease a few.

#Transform #Impact #Empower