How to learn from other people’s personal finance stories
Have you joined the #52WeekChallenge powered by M-Shwari? To join, set up an M-Shwari Lock Savings Account, start saving and you just might get a cash reward. As I post this, we are kicking off Week 4 of the #52WeekChallenge, use the MoneyBox App (for Android) to calculate how much you are supposed to save on a weekly basis and start today!
The other day, I received a link in my Whatsapp that read, “I grew my net worth by over $100,000 in 2 years – and I started by saving just $5 a day”. The person who sent it to me was right next to me, so I turned to them and said, “I bet the writer is a rich kid”.
As I opened the link, I was not interested in his strategy, as much as I was looking for information to confirm that indeed he was from a rich family, or had an above-average income.
He was a finance analyst, and yes, he did have an above-average income.
Though I kept on reading his blog and getting useful information – very useful information I must say, my attitude reflected the way many of us read personal finance advice. We focus on the amounts the writer is talking about, and not the lessons they are sharing that would be useful to us, at our current income levels. I saw this on Twitter, whenever we had our #52WeekChallenge weekly updates. There are people who were on the KES 500 challenge, to end the year at KES 684,000, and their updates usually attracted most comments, from people who are amazed that they earn enough to save this much, and others marveling at how they would never be able to achieve such a feat.
But this is missing the point guys. Just like I was about to miss the point of that post, because I surely cannot save $5 daily (KES 5,000 per day, and KES 150,000 per month).
Personal finance just like it is called is PERSONAL. We all have different goals, aspirations, income levels, responsibilities etc. But personal finance truths are universal. This is why The Richest Man in Babylon – a book that was written in 1922 – still rings true today, almost 100 years later:
- Small bits of money, whether savings or expenditure add up.
- Money invested prudently grows at
an increasingly higher rates , this is the law of compounding - If you invest in things you do not understand, you will lose money
- Greed and fear are two emotions that either lose
you money, or cost you investment opportunities - Keeping your desires simple, and learning contentment is key if you want to achieve personal
finance independence, especially on a salary
When we read personal finance stories, we are not looking for a template that fits our goals, aspirations, income levels, and responsibilities that we can apply directly into our lives. We are reading to see how somebody else did it to learn from their methods, get a reminder of the personal finance truths, and possibly get inspired to change something about the way we manage money.
The only way to get a template that fits your life is by doing some financial planning with a financial planner. The planner will sit with you, discuss your income, liabilities, goals, and aspirations, then translate those into actionable steps that enable you to meet your goals. You can then apply these lessons, and
Photo Credit: Nicole Honeywill
