Analysis: MAXWELL PHIRI
I HAVE realised in life that everyone has been given an opportunity to handle money, be it in the formal or in the informal sector. Sometimes people will complain that lots of money passes through their hands but wonder why they lose the grip to hold the money.
I have an answer for such people. The wastage of money is a challenge that this country must deal with to avoid people retiring destitute.
Every time you come across money, there are three things you can do with it:
1. Waste the money
2. Spend the money
3. Invest the money.
Further, I have noticed that the poor waste money, the average people spend their money and the wise invest theirs. My question to you is, which group do you belong to?
If you belong to the first two categories, then you are my good client today because that is the niche I would like to use my tools on. My task is very simple today. I want you to retire smiling by ensuring that you live above wastage of expenditure.
One of the few reasons as to why you are appearing under the two categories could be that you are not sensitive to the following financial traits of the money markets:
1. Impulse buying: you are a type of person who always has no plan or budget but have the money, hence you walk into any shop and start buying stuff using impulse purchasing because goods in the shop are appealing to your eyes.
For example, you buy an appealing handbag in the shop and once you get home you notice that the handbag you have bought cannot match with the clothes you have in your wardrobe. Therefore, you will abandon the new handbag till such a time that you get an appropriate dress to match it. Meanwhile you have locked up part of your retirement contribution in the handbag and it may appear small, but if you were to count how many such careless decisions you have made on impulse procurement in a year, you will be amazed. Some people buy 54-inch television sets and yet they are renting a small house where the TV cannot even fit. Under worst case scenarios, the landlord regularly switches off power after 21:00 hours and the only option now is to keep the TV under lock and key for a rainy day and look forward to a time when you will buy or build your own house. Again, part of your pension money is tied up in the 54-inch TV.
2. What will people say? You worry about what people will say if you cannot afford materials that others have. People are not even concerned about what you are wearing or what you have. Instead, they mind their own troubles. It is now a busy and fast world. No one has the time to sniff what you have or what you don’t have. People are busy with their lives, only you are a problem.
We tend to get worried about what everyone will say if we cannot afford this or that? I have always advised people that you are not ‘everybody’. You are somebody, so treat yourself as such. If you worry about what people will think about you, you will end up ‘stinking’, and if you are not careful you will start sinking.
3. Furthermore, avoid engaging in a business which has already been established by other people. Following business paths blindly is highly risky and following the bandwagon just because everyone is doing it will only take you to a destination called nowhere.
4. Buying wants instead of needs: most people prefer to buy wants instead of needs. Wants are categorised into three basic human needs: water, shelter and food. To create wealth for your retirement, always consider the three basic needs prior to making a concrete plan on how you will spend your money.
5. Maintenance cost: if you wish to grow your retirement pool, avoid buying items that will cost you a fortune when it comes to maintenance.
I have seen people buying vehicles that have no spare parts in Zambia, even if they have the money to buy the parts, but stock cannot easily be found locally. Why stress yourself in trying to order parts from outside the country? Those will take a minimum of two weeks to be shipped to Zambia and during that period the vehicle is just parked. Then you have the challenge of taking your kids to school. You are forced to book taxis to take them to school and you should also book a cab to go to work, hence incurring extra costs.
6. Buying the brand name: In this generation the brand of a product is the in-thing. People spend huge sums of money – locking their retirement – buying brand names, not products that will offer them the value for their cash, for instance water dispensers, football jerseys, sport kit, etc. Some people spend huge amounts on particular brand names, yet the items serve the same purpose as any other gadget.
Rise above wastage and lock your money in your retirement account.
The author is director – human resources and administration at the Rural Electrification Authority.
Analysis: MAXWELL PHIRI