Your life or your money?

The author of ‘Practical Steps to Financial Freedom and Independence,’ Usiere Uko, writes about how the financial choices people make determine whether they  end up rich or poor

 I heard a joke a long time ago about a trader who was ambushed by armed robbers on his way to buy goods for his shop. When the robbers could not find where he hid the money, he was asked to choose between his money and his life. He asked the robbers to take his life.

 It may sound funny, but we are faced with that choice every time we spend. According to Robert Kiyosaki in ‘Rich Dad, Poor Dad,’ with every amount that we spend, we are making a choice to be rich, poor or middle class. A choice is being made, whether we know it or not. We are where we are financially because of past spending decisions. What we do today is shaping our financial future. One experience common to almost everyone is wondering where our money went. You withdraw so much from the bank or through the Automated Teller Machine and days later, the envelope is virtually empty. If you have a roommate, she becomes a prime suspect. If all fails, you begin to suspect home trouble.

Trade by barter

 If you are working for money, it means you are literally exchanging your life for money. You give your time and effort and in exchange, you get a credit alert by month end. Our lives are made up of time. The moment our time is up, we are out of here. We typically put in 160 hours per week on our jobs. Apart from public holidays and vacations, all your week days from when you start working till age 60 belongs to your employer. That is a huge chunk of your life. You get paid for it. That is the money you get at the end of the month. That is what you spend.

 Some employees have had to give up significant events in their lives. Some leave home before their kids wake up and return home after they have gone to bed. Many cannot attend Father’s/Mother’s Day at their children’s school, including open days, prize-giving days, school plays, parents’ forums etc. In addition, they cannot attend to personal issues during the week unless they take permission from work. This includes conventions, seminars, courses, meeting with their stockbrokers, bankers, financial advisers, accountants, agents, lawyers, service providers etc. They do most by proxy or not at all. Most of their hobbies and dreams are put on hold until after retirement.

 It is a heavy price to pay, which is why when the money gets into our hands, it should be handled with utmost care. We traded our lives for it.

 Spending with purpose

 Seeing the heavy price that you paid to get that money, how careful should you be in disbursing it? Does it then make sense to give it all away and have nothing to show for it years down the line?

 I am not saying that it is wrong to be an employee. After getting the money, the wise thing to do is to get your life back, by aiming to live life at your own terms. This means you have a personal vision of how you want to live your life, how you want your life to be. It will not be handed to you in a platter. You have to create it. You have to have a plan. You have to work your plan. You have to spend with an alignment with that plan. Your financial future is your responsibility, not your employers.’

 Whenever you show up for work, you are telling your employer, ‘take my life and give me the money.’ It may not be a choice of death versus your money as the trader was asked to make. It is a choice between a chunk of your life and your wages. When the money comes into your hand, you need to treat it the way you treat your life, with purpose.

It is your life

 Mismanaging our finances is an expression of lack of respect for self. We spend based on priority. When we pay others and fail to pay ourselves, we are saying we are not important enough. Our name does not appear on our payment vouchers. We give everything away. We pay others first and by the time we are done, there is nothing left to save and invest and have money work for us.

 We cannot afford to leave our life to chance. Everything we do, including the way we spend money, is creating a future. We need to become aware of the future we are creating by what we are currently doing, and decide if that is what we truly want. Our ability to enjoy life on a sustainable basis depends on our financial health, all things being equal. If you are perpetually broke, your choices are very limited. When we abuse money, spending our salaries on liabilities and praying for an increase, we are setting ourselves up for heartache down the road.

 I watched a documentary on the American dream a couple of days back where the presenter interviewed five families that got impacted by the financial meltdown. I saw families with six figure incomes drop from grace to grass simply because the breadwinner lost his job. It was heartbreaking to watch. The presenter concluded that the American dream no longer exists. In my mind, I added – the dream has gone to China. While the Americans were busy spending, the Chinese were busy saving. Now they are opening their humungous financial chest (trillions of dollars) to buy up assets around the world while natives are murmuring and complaining.

 Where will you end up?

 You entered the job market young and vibrant and will leave at 60, old and grey haired. Some will stick around to work past 60 as they are unable to retire. The question remains, ‘How do you want your life to be when you retire?” Do you want to be among the crowd with placards protesting unpaid pensions or among those that are free to do what they like because they prepared for it?

 Based on where you want to end up, are your spending choices today supporting that vision or you are banking on hope and prayer, faith without work? Is your current lifestyle funded by wages or profit? What happens when the wages come to an end? Look for the nearest soup kitchen?

 It is your money or your life. You are creating your future by the way you spend today. If you do not use your money to create other income sources and be financially independent, when tomorrow comes and the pension does not show up as hoped, it will dawn on you that the joke is on you.