THIS week, I would like to walk the talk on the benefit of a saving culture on some people as well as myself. The culture of saving should be a lifestyle inculcated at a tender age in order to create a reasonable portfolio for the future.
Learning from Warren Buffet who started saving at the age of 11 and went on growing his savings even at the age of 16 as a university student.
Today, in the entire world you cannot talk about powerful investors without mentioning the name of investor Warren Buffet. The principle of humble beginning is key when it comes to savings. No matter how small the saving is still a saving anyway.
My personal experience on saving started at the age of 23, when I was first engaged with a non-governmental organisation (NGO) in Lusaka. My start up salary was about K80 back then. Those days NGO’s used to conduct several workshops considering that it was a new concept in the country and they wanted to orient people on the new operating system from the Western world, through the use of computers, the famous IBM Desktop.
For each workshop, we were paid K60 night allowance. During this period, I was saving with one of the commercial banks and for two years, I never withdraw my salary considering that my workshop allowances was strategised for my upkeep.
I recall my bank calling me as they were concerned that I failam not withdrawing my salary, later we slated for a business talk appointment and it was diarised accordingly.
The bank financial consultant advised me that it will be good that my current normal savings account is turned into an investment account called Investor’s Plus Account, which will be accruing interest approximately K25.00 per month then I said it’s a deal.
After two years of my savings at the bank, the savings grew and helped me to expand and renovate my mother’s house at the age of 23.
The following year, I joined the same commercial bank and immediately upon recruitment, I find an indoor staff saving scheme called International Sharesave Scheme, which had an offshore investment for members of staff.
In addition to that, the new employer (commercial bank) had a mandatory pension scheme called Defined Contributory Scheme (DCS) where the employer contributes five percent of one’s basic pay and employee contributes six percent of their basic pay.
The same DCS scheme had a provision of voluntary pension scheme entailing that an employee could voluntarily contribute any amount on top of the normal five percent contribution. I was the first employee, within the bank, to enrol for the voluntarily pension scheme.
During this period, I was nominated to serve on the Banks Pension Board as a trustee. During my employment in the bank, I was not left behind, I was availed a loan facility in terms of mortgage. After serving for 14 years in the bank, my share save scheme, normal pension and voluntarily pension funds contributed heavily to redeem the mortgage on my exit from the bank and only remained with a minimal balance.
The mortgage, which was supposed to be redeemed in 2027, I managed to redeem it in 2011. The point I’m trying to drive home is that; savings can work out modalities to leave a financial stress free life.
Another scenario which really hits me whenever I review the life of a colleague in the bank over his dangerous saving culture is really thrilling. His story may change the perception of many of you in the country in as far as saving culture is concerned.
The gentleman, prior to joining the bank, was working for Galunia Farms from 1988 to 1989. His salary then was K55. In 1999, he joined the same commercial bank where I was working and his new appointment at the bank had a salary of K160.
The difference between the old and new salary was about K105. He opened an account within the same bank and start saving for three years. His strategy was to assume that he was still on the old salary and this takes total discipline and sacrifice towards saving.
Within three years, he used the funds in saving account to build his first house. Mind you, he was a messenger in the bank and was entitled to be availed with a mortgage but he told himself not to borrow in his life. As if this was not enough, after he shifted to his new built house, he opened a rental account where he again assumed that his still remitting rentals even after building his new house.
Every month, he would credit his rental account with rentals. In short, he was renting a house to himself and save the money. Within five years, the money grew and started building flats around his house and the proceeds from the flats went towards growing the rental account.
The time Chalala was officially opened for residential construction, he was in the forefront to construct houses. As at last week interview I had with him just to refresh my mind on his testimony, which I have heard over again and again, I personally learnt a lot from him.
He told me that he now has 15 houses built from the rental account. Mind you this is a messenger in the bank. I may not divulge all the nit grits for confidentiality purposes. His rental account grew significantly to the extent that he started buying Treasury Bills (T/B’s) within the same bank and with time, the T/B’s grew his portfolio to a level where executive management of the Bank were amazed with his vigour of saving.
He later expanded his T/B’s to Central Bank and the Insurance firms, as of last week interview I had with him, he has not less than 5 million investment in T/B’s. This is a mere messenger.
Some years back, his child had a medical challenge, he managed to fly the child and the mother to Johannesburg and foot all the medical bills without getting a loan or salary advance at work.
He recently supplemented sponsoring his first-born son, who graduated from a medical school in London. He is now working as medical doctor in Kenya. It is also amazing that he just retired this year after working for 25 years in the bank and during this period, it was worth noting that he never applied for any salary advance and never applied for any loan.
He says where he stands financially now he can live another 70 years without working. He has, however, chosen to still live like he is working, hence he has put himself on a monthly salary.
He further indicated that he is able to visit all the Seven Wonders of the World, fully funded by himself, financial stress free. This is a Zambian and happening in Zambia entailing that it is possible to leave our dream life through saving culture considering this person was not a senior person or a businessman but a lower rank officer in the bank, a messenger for that matter.
The above scenario is based on a true story and the gentleman will come to speak during the workshop we are organising on saving culture in December. I want to implore you that it is possible to reach his level, the only battle you have is in your mind, avoid those negative thoughts and start saving now.
The gentleman further told me that his secret of success is not the position in life but the proper use of brain. This reminds me what the real estate developer Donald Trump said way back before he became the president of the United States of America; “You should keep on thinking and think and you need to think anyway.”
The author is a human resources practitioner and pension advisor.