Be smart with your money!

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SAV­INGS have, over the years, been a con­tro­ver­sial topic amongst Chris­tians. The say­ing goes,

“The rich don’t be­long in heaven”. And this has led to many, con­fused, peo­ple re­fus­ing to be the best they can be in an at­tempt to avoid be­ing rich and evil.

As a re­sult, in­no­va­tion and pro­duc­tiv­ity have been greatly com­pro­mised as many peo­ple find it bet­ter to be town dere­licts than work hard and be rich.

Ba­si­cally, what is the bib­li­cal mean­ing of rich? Rich is ob­ses­sion with money. Hence, in my life, I have met the rich­est men in life with no cents in their pock­ets. And the poor­est men with all money in the world.

Th­ese poor men are feed­ing and ed­u­cat­ing the real poor men and women. They pay for their med­i­cal bills and put roofs over their heads.

A case in point: Bill Gates is a phi­lan­thropist. He thinks and cares be­yond self. It just dawned on me that God made Solomon rich. Be­cause he sought Him first.

So, I am teach­ing you to be smart with your money. There is ab­so­lutely noth­ing wrong with that. Have a sav­ing plan. And start now to save. Don’t keep post­pon­ing be­cause a de­lay costs you a for­tune.

Each year you de­lay to start a sav­ing plan, you lose out a great deal of money: It is not the in­ter­est on your money in ‘year one’ of your sav­ings plan that you will lose; it’s the cu­mu­la­tive ef­fect of com­pound in­ter­est over many years that you lose.

For in­stance: take some­one at the age of twenty who in­vests M1000 at a com­pound in­ter­est of 20 per­cent over a pe­riod of 45 years. At age 65 it would have grown to no less than M36.5 mil­lion.

If the same per­son waited un­til thirty to make the same in­vest­ment, the money would have grown to only M5. 9mil­lion. A M30mil­lion dif­fer­ence. What a dif­fer­ence!

How should your sav­ings be di­vided? Ex­perts sug­gest that in three ways: short term, medium term and long term. Short-term: This money is to be used for sud­den and un­ex­pected emer­gen­cies like car and fridge break­down.

And, ideally one needs the equiv­a­lent of about three months’ salary. The best place to keep this money is banks be­cause em­pha­sis is on se­cu­rity not growth.

Medium-term: This sav­ing plan is aimed at some­thing that will take some­what longer to achieve, like buy­ing a car or de­posit on a house.

Be­cause the in­vest­ment pe­riod is longer, one can con­sider equity-type of in­vest­ments like unit trusts (that are eas­ily ac­ces­si­ble), shares, or even a 10-year en­dow­ment pol­icy.

Long-term: This con­sti­tutes your re­tire­ment plan­ning and here the bulk of in­vest­ments should be geared to­wards beat­ing the in­fla­tion rate.

Op­tions here in­clude unit trusts, en­dow­ment poli­cies, re­tire­ment an­nu­ities, prop­erty syn­di­cates, pen­sion and prov­i­dent funds.

Truth is there is noth­ing at­trac­tive about poverty. It breeds worry; which is the great­est sin ever be­cause it de­nies one a chance to tap into the great power he/she has. We live to max­i­mize our po­ten­tial.

And if that tends to make us rich, then we were meant to be! My fi­nal words: Don’t fear be­ing rich. Fear not build­ing a re­la­tion­ship with God. So, strike a bal­ance be­tween your life’s com­mit­ments and God.

Bokang Moeko

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