Someone once told me “Wealth can only be created in the context of TIME!” If we cannot manage our TIME, we simply cannot create wealth. As many people talk about how they find it hard to manage money or how dire their financial situation is, most times they are wasting time and consequently in the process wasting money. I did this simple exercise with one of my clients. Try it for yourself and see if it makes a difference.
Mary** had cut as much as much of her expenses as possible. For the past two months she had tracked everywhere her money went and she found that she just could not find any more room. The income she was getting from her salary was just making ends meet. However there were other things she wanted to achieve. She wanted one day to own a house, there were various investments she wanted to undertake, she wanted to be able to travel and ensure she put aside enough to put her children through decent schools. Mary worked full time as a personal assistant so she just did not understand how this was going to happen. Maybe you can relate. You have a full time job and don’t understand how you could possibly earn extra income with this time constraint. Like many people, Mary was wondering whether the only solution would be to find a job that would pay her more despite the fact that she really did like her job and the environment in the organisation she worked for. Experience has taught me that this is never the solution. The main reason I did not encourage her on looking for a new job is that it would keep her believing that it is something external i.e. it is in someone else’s power or control to improve her situation. She would then forever spend her life looking to something else to sort whatever financial difficulty or challenge she came across. I wanted Mary to start learning how to improve this situation for herself.
It was clear that she needed to find a way of creating income. I asked Mary to take a log of how she spent her time for the next two weeks. She did not at first understand how this would be relevant in solving her financial dilemma but she went along with it. In this seemingly unimportant exercise we discovered that between Monday and Thursday she would spend about three hours per night watching TV. On Friday she would spend about 6 hours. On Saturday there were about 8 hours where she would engage in activities that were not that vital and on Sunday another 6 hours. Now this was not time spent on quality time with her family or constructive TV content. This was simply idle time. In a week this would average about 32 hours in a week. In a year if she continued with this trend this could possibly total to 1,664 hours a year. When we converted this to days it equated to 70 days. 70 (24 hour) days are what she was spending in front of the couch (and other similar activities). If this is converted to working days (on an 8 hour cycle) this could be about 210 working or productive days. I then asked her if she was given 210 days of paid leave, what she would accomplish. After thinking about it for a week she realised she could learn a lot about investments despite not having money to do them but more importantly she could take a cooking class. She has always liked cooking but never thought of improving it and turning it into an activity that could generate income, which is what she really needed at the present time. She had been caught up in thinking of investments as buying a plot of land, without realising all along she was wasting this resource called time, and just not developed her “hobby”.
To cut a long story short Mary talked someone who owns a bakery into giving her some classes. Instead of using her Saturday morning to sleep in and watch non-value adding TV, she started going for baking classes. She would also use at least one of her evenings every week and bake something to take to the office where she started getting people to sample her cakes and give her feedback as she was learning. Through this Mary has now started getting orders to bake for her colleagues when they are having events at home. This word of mouth has now spread and last month Mary, by just utilizing a portion of her time better, made an extra Kes 25,000. The best thing about this experience is that Mary is no longer expecting her employer to fix her financial dilemmas. She has realised that she is in control of her future and no one else. She told me that when she got the first client who paid her Kes 1,000 she was tempted to think it was too little. But it was only in learning to make the Kes 1,000 that she was able to make the next Kes 5,000 (Learn THE POWER OF KES 5,000), the next Kes 10,000 and so on.
So do not sit around complaining and hence wasting time about how others need to fix your problems for you. Do something about it. Chances are while you are waiting for money to mysteriously appear from somewhere, you have a hobby or a skill you could be polishing up so that it generates extra income for you. I am not saying never relax or never watch TV but we really have to challenge ourselves on whether it has to be for 210 productive days. You could be learning about how to invest and therefore start getting ideas on how this investment would happen. You could be using your time to learn from the correct people. Many times you will find that your use of time, reflects your financial situation. Change how you use your time and you will alter your financial destiny.
Waceke runs a program on personal financial management. Find her at firstname.lastname@example.org|
I read your column on what one could do with Kes 5,000. I am considering investing in stocks, which you mentioned is an option for this kind of money. Someone also suggested an Equity fund to me. What is the difference as I thought they were the same thing?
An equity fund is a type of unit trust. It is a structured vehicle to pool money together from different investors and have it managed by a professional investment manager who makes the everyday decisions of what companies to buy and sell in the stock market. If you invest through an equity fund you will not make the decision of what share to buy or sell directly as you would if you invested directly yourself.
Send your questions and comments to Waceke at email@example.com