YOU AND YOUR MONEY. THE CONNECTION

by Sammy Mwaniki Nexxus Affiliate

There is a distinct connection between you and your money.

WELL BEING

Your well-being is interconnected with your financial stability. It also to a great extent determines your ability to invest and or save wisely.

EMOTIONAL CONTENT

This argument is biased towards a man’s world. Being one myself, I have first-hand experience on the issue. Emotional content and satisfaction do not in this case, mean the same thing. I refer to it in this case as being honest with ones-self in regards to the current situation one is in, accepting it as being a temporary “okay” and be willing to start from there.

Emotional discontent especially in men alters the triggers of their impulse to do things. Feelings take priority. A sad man will spend a considerable amount of money to make others happy or impress. The reverse of it to the extreme tends to have the same effects (extremely happy.) It also on the other hand tends to negate the main drivers of the journey towards financial stability. It brings about lack of taste, drive and motivation. Without these, the importance and the urgency of formulating or taking the required steps towards your goals diminish into a “what for?” attitude. While laying the foundation on which to build your progress, this factor should be given great consideration. Failure to which a solid plan would collapse simply because of having been laid upon a shaky foundation.

The best way to deal with this is to start at the source. Home. For married people this is synonymous with their marriage. By this I do not infer that one should have a rosy relationship before venturing into savings or investment, no. I mean a clear path. An agreed upon way of things. Order. “This how we are, and this is how things will move on.” This eliminates the deadly “if” factor. Suspense, anxiety, hope, fear, doubt. This is the cocktail that should be eliminated before any serious venture. Talking of serious, nearly all serious things involve money.

A man with suspended problems either at home or in his marriage is a self-destructive man. Long term goals lose importance. Lack of commitment which is often intertwined with the reasons for it. To build something for the future one needs a future to look up to.

Health and health issues. Are there any incompatibilities? Health impact on deals, contracts, insurance, risks e.t.c.

Striking a balance between an investment, savings and how you feel about it is equally important. An investment one’s inner self doubts is less likely to give returns. Savings are never a gamble. Investment always is. No matter how well researched and planned for, it always is a gamble. The best one can do is change the odds.

Also, high yield investments generally have a higher risk. Lower yield investments are much more secure

So far, this is the sequence.

· Start from where you are

· Factor in your well being as an integral initial part

· Health and health issues

· Strike a balance between your savings, investment and your “sixth sense”

· Decide on whether to invest in High yield or Low

From here, you can now start formulating your plan.

RESOURCES

There are never going to be surplus resources. This is mostly about making do with what you have and balancing it to acquire your aspirations.

Someone once quoted, “If you continue buying unnecessary things, soon you will be selling necessary things.”

· Prioritize

· Make budget cuts

· Check for unnecessary purchases and spending

· Ingrain a habit of saving

· Find external sources if necessary

As a rule, it is wise to invest in multiple areas so as to spread the risks. “Not putting all your eggs in one basket.”

This turns out to be a safeguard in case one or more of the investments gives an undesired return on capital. Your losses would be cushioned by the margins in the better performing ones.

A second rule is that you should never plough back all your earnings into the same investment that generated them. If, for example, you invest in a venture that gives you 200% return on capital, you should take out the initial capital and only invest the interest which would also be 100%. I learnt this while farming. A good farming investment coupled with a good harvest and market season especially in Sub Saharan Africa would give you 500 to 700% return on capital. The mistake most farmers make is they then re-invest the whole amount into the same venture and if it turns out wrong, it takes back even the prior margins.

Saving should be developed more as a habit than an anticipation for investment as it also cushions one against un-foreseen occurrences.

Investment on the other hand is just as much an internal-self activity as an investment. While planning on how, when and where to do it, do not forget yourself. You and your well-being. You are an integral part of the whole scheme.

Sammy T M

Thank you.

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