When I was in school, students were considered to be good if they passed exams. The teachers had what they called a marking scheme. Basically you had to have written the answer in pretty much the exact same way otherwise you would get it wrong. Because of this I went through school trying to cram the answers rather than understanding the concepts. I get a lot of people asking me for direct answers to their financial issues. Where do I invest? Which bank should I use? Where should I buy land? Many times in our financial management courses we have been asked in the beginning whether we will provide direct access to investment opportunities with guaranteed returns. To me that always reminds me of how I went through school. Expecting the end result in form of a good grade without the actual learning. Just like the cramming I did before my chemistry final exam has not resulted in me remembering the periodic table, a one off direct answer or dependence on financial product salesmen to the many money questions we have will not result in wealth creation.
What will translate to that is Financial Intelligence which comes about as a result of experience and financial education. Just because you earn a huge salary or have a PhD does not mean you are financially smart and just because you earn what society considers to be a small salary or did not finish primary school does not mean you are not financially smart. Most people focus on working hard to make more money – just as we were told in school to study harder to improve our grades. Financial intelligence is not how much money you make but how much money you keep and how long it works for you. In the same way a lot of people do invest but they are not investors. The act of investing does not make you an investor unless you understand what you invested in, how you will make money, how you will exit the investment and how it plays a part in your overall objective of making money work for you. An investor also recognizes the need to work with others and gain from their experience and resources therefore considerably shortening the time he or she will take in creating wealth. ‘Others’ may refer to like minded investors, lawyers, bankers, accountants, fund managers etc. In school we were told not to copy or discuss during exams as that was cheating. To create wealth we need to look at what has worked for other people, seek opinion and discuss amongst people we trust. This can be from how to manage a household budget, pay down debt faster all the way to taking on a property development project.
The mindset shift needed is to take Financial Education a lot more seriously. The time has come to go beyond short seminars or reading of articles but rather more structured formats like courses that ensure actual learning and changes occur. Money, unlike some of the subjects we learnt in school, will be a part of our lives forever so I think it is in our best interests to take time to learn (not cram) how it works for us.
Waceke Nduati Omanga| waceke@centonomy.com | Twitter @centonomy
ON POINT, THANK YOU