How To Make The Best of 2024 In Your Finances
Seven years ago, I came to a critical juncture in my finances. Before that time, I had been hustling ceaselessly- marketing, training, recruitment, sales, and so on; if it would put some money in my pocket, you would find me there. I was taking two steps forward and four steps backward. Strangely, the more I hustled, the less satisfied and fulfilled I became. It was as though I were working like the proverbial elephant, and eating like an ant. One thing is for sure when you work unendingly: BURNOUT! Suddenly, I hit rock bottom. If you would ask me though, I had it coming. I became depressed, stressed, and completely tired of life. If you have ever experienced such before, you would understand what I am talking about. I came to the critical juncture where I had to make a choice between two vital options: Continue with the status quo or Make a 360-degree change; something simply had to give. It was a very tough call, but I chose to go with the second option. This required a complete overhaul of my life. I shut down my businesses and went to learn. I needed to know how things really worked so that I wouldn’t be struggling unnecessarily. 2023 was quite a year of adjustments for most of us globally. Anywhere you went, be it the United Kingdom, the United States of America, or Australia, just to mention a few; most people had to make adjustments in the face of the rising cost of living, energy crisis, inflation; and most importantly because of the war in Ukraine. In my interactions with most of my clients during the year, I noticed that they were dealing with different shades of financial issues. The critical question you need to ask yourself now is; “how do I make the best of 2024?” First, accept that 2024 is a critical juncture. By way of a simple definition, a critical juncture is a valley of decision, where the steps you take now will determine your success or failure in the coming years. What this means is that you need to be very strategic in your financial decisions this year. Don’t make decisions based on emotions or hearsay; investigate things for yourself, ask questions, and if you are not satisfied; don’t do it. This reminds me of a friend (someone I truly respect and honour); who recently asked me to make an investment in a business deal. I appreciated the gesture, but I still went ahead to ask him vital due diligence questions; he did his best to answer, but I wasn’t really sold. Hence, I politely declined the offer. The events that happened subsequently, confirmed my suspicion. Second, build an emergency fund now; if you don’t already have one. An emergency fund simply put, is a special savings scheme where you build up three (3) to six (6) months of your monthly income. Let’s suppose you earn $1,000 monthly, to build an emergency fund, you will need to save up $3,000 – $6,000. This is imperative in that 2024 will be filled with financial headwinds, and one must be prepared. I recently had a session with a client of mine, and he told me that he has built up a two (2) year worth of emergency fund. This is very commendable. Lastly, keep investing in your earning ability. This is very crucial in such a time as this, especially concerning the opportunities that would be opening up. I know, there are quite several negative forecasts for 2024; but we must not allow ourselves to be blindsided. This New Year has opportunities, and we must continually prepare ourselves for them. Keep building capacity through relevant courses, certifications, knowledge acquisition, and engaging coaches in key areas of your life. In conclusion, you need to understand that 2024 is not a year of hustles; but a year of strategic financial moves. Take the proactive steps highlighted above to make the best of 2023. I love and appreciate you.
Building Wealth In A Very Challenging Economy
A few years ago, I was at a forum where Dr. Gabriel Ogbechie, GMD/CEO, Rainoil Ltd. – one of the foremost downstream oil and gas companies in Nigeria; shared the fascinating story of how tough it was for him to raise $1000 to start the business. Here is what he said: “Back in 1995, I set out to raise $1000 for my business. I didn’t have the money. I wrote several proposals. I went to those who I knew had the money. I was sure it was going to work. Sadly, all I heard from them was come here today, come here tomorrow. Nothing but Stories! It was a very frustrating experience. “I learned my first lesson: People rarely give money to those who don’t have it. My office where I was in paid employment was in Isolo, Ire Akari Estate Road – a suburb in Lagos, Nigeria. And I had a stockbroker who was on Bank Anthony Way in Ikeja – a commercial centre in Lagos, Nigeria. With as little as $7 in my pocket, I would drive from Isolo to Ikeja, meet my stockbroker, and say, buy me 1000 units of First Bank. When I had $5, I would drive again to Ikeja and tell him to buy me 800 units of Nigerian Breweries. This went on for an extended period of time. “By 1996, I was very frustrated. I still couldn’t raise the $1000. But one evening, I brought out my capital market file and I started itemizing all the stocks I had bought one by one: 1000 units of 7UP at 5 cents per share; and 2000 units of First Bank at 12 cents per share. I itemized the stocks. It went into 2 pages. When I summed it up, I was surprised, it came to $1656.67. I was shocked. I gathered the share certificates and took them back to the same stockbroker. He verified the ones he could verify and sold the ones he could. At the end of the day, I had my $1000.” There is something strange about the current global economic climate: it is indeed very challenging. Wherever you turn, people seem to be lamenting about how difficult it is for them to get by. Organizations are not left behind in the stories of woe. Again and again, I have had to counsel my clients on how to thrive in spite of the economic challenges. One of the things I say to them is that this is the best moment to build real wealth. Rather than join the bandwagon to sing songs of lamentation, I would focus on offering solutions to the myriad of problems that are cropping up. Having said that, the critical question that begs for an answer is, “How do you build wealth in this very challenging economy?” First, you need to engage in what I call Asset Allocation. Simply put, asset allocation is the proper appropriation of your hard-earned resources. In other words, you carefully determine what you spend your money on, and where to invest it. This is very important in such an economic terrain that we find ourselves in. You cannot afford to spend money or invest anyhow. The real payoff of asset allocation comes when you figure out the right mix of how much of your money you keep safe and how much you’re willing to risk to get greater rewards and have the potential to grow faster. To get the very best of Asset Allocation, you need to determine the percentage of your assets you are going to put into investment vehicles, and what percentage you are going to keep. Before you make the choice, you have to consider three factors: Second, you need to create a Financial Plan now. Agreed, things are changing faster than we could imagine; we still need to be proactive by having a robust Financial Plan that we regularly update. In the first place, it is the Financial Plan that would enable you to properly allocate your assets and resources. A simple plan is better than none. We need to be very strategic in our quest to build and retain wealth in such a time as this. If you don’t already have a Financial Plan, I would suggest that you get one as fast as possible. I have assisted loads of clients in creating their Financial Plans. In conclusion, bad things happen when you refuse to heed sound advice. This reminds me of an acquaintance of mine who got a windfall of $100,000; after his father had passed on. Rather than create a solid financial plan, and properly allocate the money; he invested everything in stocks. This turned out to be the worst investment decision he ever took. Needless to say, he lost the money. May you not lose money stupidly in this season.