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

How To Come Out of Debt Trap

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Tom, a young lad in his early 30’s has a good job with a good take-home Salary. Before Tom, could start enjoying his hard-earned money, he was already in a cycle of debt. A few times he borrowed to enjoy certain pleasures of life like going out to the beach or to upcountry resorts to have fun with his buddies but that cycle continued. Tom banked on some money from his employers to sort out a few of his debts and before the money could come, he still had to borrow to manage his life, pay rent, transport, and eat.

Tom’s getting into debt wasn’t necessarily intentional but one of them was circumstantial. However, a big gaping hole has been left in his life as he sorts out his debt problems. I encouraged him by telling him that one good thing is, he still has a good job and that he should work with what he has while cutting out big expenses that could dent his financial purse.

One of the biggest traps in this world isn’t just going to jail, one of the biggest traps is debt itself. Financial enterprises like banks, microfinance keep selling their debt products, many of them are consumer debt. The debt is often marketed as a big-time solution to a lifestyle that people want now, and impulsive buyers surely fall into this trap with their eyes wide open. The marketing done by these companies is so well thought out that an attractive image of a beautiful woman with her sleek car or a couple smiling with their state of the art bungalow or apartments in the background is used. Surely who wouldn’t want that kind of lifestyle, the message settles in your mind and you start thinking maybe the easiest way to get that house, car, land, etc, is a loan.

From his book “How to Secure a Financial Future”, Dr. Sunday Adelaja in regards to Ad companies associated with banks or credit services says, “They use the power of subliminal messaging to associate the credit card with those things. A lot of people do not think there is anything wrong with credit cards or consumer loans; it affords them the lifestyle they want. But if you have to borrow to afford your lifestyle, isn’t that a trap? It’s just a matter of time before the house of card crumbles.

Before yours truly, had started work, the talk around money that came from every person I talked too was, “You need to get a loan”. That is the type of financial education I was getting introduced too. However, they wouldn’t say get a loan to develop, it would be man, we earn so little, so just get a loan. Loans can only be good when invested, but you surely do need a clear plan or goal for that money and you need to know that getting it is the easy part but paying back is the real deal. There is a need for proper financial education, people need to learn about saving, investing, debt, taxes, business, entrepreneurship, etc. All this is missed throughout our years of education yet learning them would make strides in grooming people who understand money and how it works from infancy.

Anyways while talking to this friend of mine, I told him that it is good that he is open about his situation and that that is the first step to coming out of a debt cycle. I told him that he needs to: -

1.       Have a debt payment plan and be as open to the people or institutions he owes.

2.       Increase his income by using his extra time (meet a need by providing a service, product, exchange time for value, etc) to make money that can be used to pay off his debt, For the small loans they can be kicked off one by one as a big chunk of the money goes to clearing the bigger debt.

3.       He needs to stick to basic spending and that will include rent, food, and transport. He will need to sacrifice events that take out a lot of money, such money can be channeled to clearing the debt.

4.       For any increment in his pay, the increment can be channeled to investment because we all know salary can do as much and that he needs to grow his money to have financial peace going forward.

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

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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

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.

Keep Those Promises, They Are Building Blocks To Succeeding In Your Venture

Keep those little promises

Successful people understand that every time you break the promises you make to yourself, you feed your identity as an impostor and weaken your self-confidence as a person of action. - Julian Hayes

I love sharing experiences about different things but I am drawn quite a number of times to this thing called money. Money is so crazy a thing that people will lie or work hard and smart to get it, it can be used to empower communities or to manipulate them. It continues to be one of the most talked about things, people are grinding everyday in tough economies, they go to bed thinking about how they can make more or how they can just survive or even how they use it to build generational wealth.

I am a lover of planning, lover of making budgets but I do fall short just like anyone else and many times I know that because I did those right things, they set me up to succeed in one thing or the other. The problem comes when you start breeding familiarity, when you start saying I already know what to do or when you start saying I will do the plan in my head. 

Experience teaches us that it is always good to document because it becomes easy to follow up with what has been clearly written down in a defined and understandable manner. We have had this truth said before, write down your vision, so that those who see it will run with it. People who plan are people who prepare and those who don't are worse than animals who at least know what to do.

Julian Hayes makes some resounding statements in his quote, he says that successful people understand that every time you break promises you make to yourself, you feed your identity as an impostor, this got me thinking, how many times do I say I will save this amount of money, I will invest in this or that and end up not doing a thing at all. 

Our desire to not follow through with some of these habits we know have worked well over time has cost us a lot, we become complacent and keep postponing what we know will definitely build bridges that we and the generations to come will cross on. 

When it comes to money, I do encourage us to get back to the basics, seek to read, seek to understand, seek to make plans that you will act on, if we do that we can win and be successful. Remind yourself that you are the difference between success and failure because you are the one who will call the shots.

#Transform #Impact #Empower

Why Being Goal Oriented Is Still Important – part 2

On the 5^th of February 2016, I posted an article titled “Why Being Goal Oriented Is Still Important”.

It’s one thing to set a goal and another to work it. Goal setting is like making a marriage proposal and committing yourself to walk through the journey of love in both the good and bad times, choosing to love no matter what, adjusting and changing yourself to accommodate the other person in your life. It takes work, time and commitment to realize what you put your heart into.

“Setting goals is the first step in turning the invisible into the visible” – Anthony Robbins

As I had written in that article, my wife and I had the goal to build our home however we knew that for us to have a home, we needed a plot of land. We were able to get the land in our first year of marriage. It really took us making some deep sacrifices, we chose to live a modest lifestyle, nothing flashy but still happy within our means.

“If you don't have any goals in life, it is high time you start thinking of some and start living by them, you will live a life of purpose and bring fulfillment not only to yourself but also to those around you” – Arthur Kmo

Moved into our home

On the 8^th of April 2018, My wife, children and I moved into our home. The home is not done up to standard however the basics of power, water, plastered, undercoat painting, windows, doors, and roof are all there. We thank God for enabling us to get to where we are. His word says you shall build homes and live in them. We took that in the literal sense believed, worked hard, putting money aside so that we could be able to do what he promised in his word.

As we live in our home now. We know very well that the home needs maintenance, bills still need to be paid for but we also know that we aren’t under any pressure to pay rent. One of the things that pushed us to leave was the fact that rent had gone up and we told ourselves that we would rather use the rent money to keep doing finishing bit by bit.

You can not develop without a loan

I grew up knowing that for development like building a home to happen. It was impossible to do this without a debt. Almost everyone who said that, after doing some research, many of them have never really had a saving culture. What I heard is that you can only get a loan to invest in an income-generating asset or build a home. However I read up on some who have done that impossibility and I realized how frugal they were, how they patiently multiplied their income by creating other streams. I chose to follow the advice of the latter. I even read in the bible, that the borrower is a slave to the lender, I told myself that the only way I won't be a slave is to avoid debt at all costs.

Life is indeed about lifestyle choices. I strongly believe what Dave Ramsey teaches about personal finance. He says that it is 80% behavior and 20% head knowledge. We did and continue to do a lot of reading it has helped a lot. We surely live in an economy where the urge to borrow is so strong. Debt is sold to us at the highest level possible. While driving your car, you will hear all sorts of adverts pulling you to go get a bank loan. We get so happy while getting the loan but are so gloomy while paying it back. I agree that loans have helped very many people develop, but my story is different, my wife and I made some hard sacrifices to make sure that our home was 98% debt-free. We got some money here and there to push us, but we are grateful for what we have, the state it’s in, we shall only get better. This experience has taught us the value of working together, saving together and putting these ideas into reality. It is possible to develop at your pace without debt if you can avoid it please do if you can't seek as much advice as possible so that you can get good rates and understand what kind of agreement you are getting into with the bank. So many people who have used their loans well and put it to good use, they are there to tell you what it takes just seek them out.

To find out some of the things my wife and I did, you will possibly need to read these articles and many more. Enjoy!

1. Invest in your mind
2. Attitude 
3. Attitude towards money and the value of work
4. Make sense of saving
5. Don't stop planning
6. Decide today
7. Pay yourself since no one is paying you
8. Deal with consumerism
9. Deal with debt

#Impact #Empower #Transform

How To Brace Yourself For Worse Economic Conditions

Image by Gerd Altmann from Pixabay 

I have been reading a lot lately and also hearing so much about our economy in the news. We all know that the Parliament of Uganda has passed the Tax on Social Media, Mobile Money Tax, and many others.

We have come from a recent economic meltdown where a bag of cement was going for almost 40,000 UGX or $10.6, the cheapest you would get was probably 35,000 UGX or $9.28, it has reduced but it's affecting the development of infrastructure, I know of people who have put the construction on hold just because of these high costs, imagine if you wanted to move to your place, what would you do? some just go in however bad the situation is, others wait.

They say our taxation hasn't hit a high ceiling but even when you are buying a loaf of bread or fueling your car, you will realize that the normal fuel of 20,000 UGX or $5.30 can no-longer do you good like it used to, now you need 10,000 UGX or $2.65 more on top of the $5.30. We also know that there are groups that are fighting this tax tooth and nail.

We have seen political actors try to increase or double their pay, remember they don't even pay taxes but this is when we see some of them rise up like never before, this what Robert Kiyosaki said, 

"History reminds us that dictators and despots arise during times of severe economic crisis". 

Imagine the pressures in a home because certain needs can't be met, couples are failing to support one another because it's the other person's duty, my encouragement in this area is finding a way of working, for us Our Motto is "My money is her money, and her money is my money, so it is our money" this enables us to plan together. This combined force has enabled us to sail through hard times.

These economic times are going to demand a seriousness on your side like never before. If you haven't been a good planner, it might teach you to become one, if you haven't thought of passive income, that could also be an awakening, if you haven't thought of investments, it could be the time to reevaluate and cut back on consumerism. I read this statement and it made it a lot of sense 

"Man is born free, and everywhere he is in debt" - Paul Mills

The debt our country has is bad but the debt individuals have is bad too.

With all this conundrum happening in our country today, I sit back and ask myself, "Will things get any easier?" and my answer is, "I don't think so". The people managing this economy probably have forgotten where they came from. Almost every corner around Kampala or in areas that we live in has someone running a mobile money stall, some of you on this platform are affected too. Can you imagine how many will be kicked out of business especially in a time when unemployment is so high? 

While listening to Radio-one talk-back, interesting views came in concerning this issue and I agree that this tax should be scrapped however we are at the mercy of the leaders of this great nation Uganda.

In other words, I am writing to let you know that as much as the economy won't get any easier, this is also when the best entrepreneurs arise, especially when our backs are against the wall. 

Could you be that person beaming with some creative idea, my prayer is that you will stand strong and not waver. It takes hard work to prevail through certain things, don't stop digging those wells even if you are chased from one after the other, you will eventually find one and have peace with it and you draw your own water that you will use to replenish others as well.

Let me end with this quote from John Mcain

"You raise taxes during an economic crisis time, as we did in - back in the time of Herbert Hoover, you send the country into a depression "

Remember this, A FOOL SPENDS WHATEVER HE GETS (Proverbs 21:20), don't be a fool.

This is what James Abola said on 24 June 2016, principles could apply today see video