IMAGE: Resource or Prison

 I have Shs 500,000 saved up to buy a car.  However, I am self-employed and in the financial industry which is extremely perception driven.  I want to buy a more upmarket car for Shs 1.3 million. The kind of car that will open doors for me in my profession and make people take notice of me.  I am thinking about borrowing the balance to buy this car.  Please advice.  George*

This question came out in an actual conversation I had with George* this past weekend. I could have answered this question in a one liner.  However when I reflected upon it, it actually brings out an underlying dilemma that we face in our society today. I am not going to negate that image to some extent may be important. What I would like us to ponder on today is when that image is being used as a resource or when it has crossed the line and become a prison?  The practically correct response to the question above is that George should buy the car he can afford and should not go into debt for the car. There are very many options for cars with half a million shillings.  Taking the loan will mean he will have to pay back an amount every month for a couple of years.  Being self employed means that sometimes he may not have a consistent source of income yet he will have a monthly obligation that is payable whether or not he has earned any money that month. This is a loan that is in tangible value not going to work for him.  In 5 years he will have paid (including the bank’s interest) Shs 1.7 million for a car that will probably be worth only half of that. We must also remember that this luxury car will come with it’s own costs such as insurance and maintenance that will be higher than the Shs 500, 000 car. So from a purely financial perspective, the answer is that George should not go into debt for the car.

But George is really asking whether he should get into debt to fund this “image” with the anticipation that the perception he creates will enable him to grow his business. Again, I will categorically state, you should never get into debt to fund an image. I have coached many people who have been in the same dilemma as George and most of the time we think that this image will account for a lot more than it actually does. Yes, the person in the BMW may get a better parking spot than George but that’s not what he is after.  George wants to generate new business, which is a factor of many things such as how good he is at his job and how well he can sell it. It will not make a difference to most people if he drives a BMW but can’t do the work. I actually asked George to be realistic as to how many people he thinks will actually see the BMW and how many people he thinks it will matter to.  His answer was not that many. For starters, most people he would be going to meet with are not going to actually escort him to the car. The kind of client that may be that influenced by the car he drives is an exception. When meeting this one off type of client he can always borrow or hire a car for the day rather than taking the risk of paying back a loan for years.  When we discussed further George actually realised that his business would grow because of networks.  He already had existing networks that had never cared about what car he drove that he could leverage on to grow his business. Plugging into business networking clubs would probably do more for his business at the current stage than a BMW.

More importantly than the decision George will make, is what he believes the significance of the car to be. Sometimes saying we will do better at work or in business etc. if we had the right car is simply an excuse to give ourselves a boost of confidence or elevate our status amongst our peers. The image becomes a prison if you think driving the right car is ultimately what makes you believe in yourself.  This means you will continuously need to buy something to keep feeding that sense of value.  When the car and other material possession are not there, you loose your confidence. I told George to make sure that he can walk into a meeting driving a normal car and have the same confidence as if he walked in driving a BMW.  If the car you drive, where you live, what brand you are wearing, the clubs you are in, what phone you use is making you feel inferior or superior to others, or a person of less or more value you have a problem.  More material things will not fix it but will just become the prison you live in. Whether you have these things or not and/or whether you choose to buy these things or not should not affect your own personal sense of value. Having these things if you can genuinely afford them is not in itself bad. What makes them prisons is if we build our sense of value or identity around them because we create a dependency on “things”. When we are not identified with them we are free to make these decisions and if need be, be able at times to use that image as a resource but also knowing you can easily let go of it if you had to.

Waceke runs a program on personal financial management. Find her at waceke@centonomy.com

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