Financial Management: Its myths and legends
What is Financial Management?
In a simple language, it’s the knowledge and act of directing, managing, organizing and planning finances.
Most times I hear people say they don’t have money to do the things they want to do, but then when you ask them how much they earn and how they plan around it you will be amazed how much they’ve wasted. Without financial intelligence, you will likely not achieve much. This is because no matter how much you earn, if too much goes out, you will be poor. What I find out as the difference between the rich and the poor is that the poor spend more than the rich. The rich PLAN, MANAGE AND ORGANIZE their money; the poor just spend!
Your personal principle on managing finance
I grew up in a home where my mother made us to save every dime. We had this pot made of clay with one small opening. When we had guests and friends and they gave us money, my parents would make us keep whatever we were given. Of course, as children we would have wanted to use the money to buy biscuits and even impress our friends with better biscuits other than cabin biscuit.
As we approached Easter, my mum would ask us what we wished using our savings to buy. You can bet most of what we wanted to buy were liabilities, like clothing and biscuits. So, when we eventually made up our mind on what to buy, mum would then will then ask us to open our savings and count what we had saved.
Three lessons I learnt back then:
1. You can ONLY buy what your savings can afford. She will NEVER add to your money. So, I learnt to buy what I can afford early in life.
2. My mum made us spend our money on what can give us more money, instead of the biscuits and new clothes; as children we grow up very fast, and not too long, before I spent my money on anything, I would ask that second question: “What I want to buy, will it give me more money? What is the ROI (return on investment) on this?”
You see the biscuits are the liabilities that take more money from you instead of generating more money for you. I learned that very early in life and I still apply that principle.
3. She made me buy what we can buy: similar to the first principle but different in that, we don’t have to borrow to get things done. The more you borrow, the more you mortgaged your profit.
As simple as these principles look, I still apply them even now.
· I save more than I spend
· I consider carefully a field before I buy it, even if it is prided as the most essential technology innovation for all people
· I buy only with value chain in mind
Yes, what we will become they say is determined by the books we read and the quality of the people in our life. So, most of what I bought were books. I knew books would open me up to knowledge that would in turn help me give birth to profitable babies.
I started with books, then with time, knowledge from such books helped me get a grip on topics like land, shares, small business opportunities and capital investment. Not too long, I was able to apply this knowledge in managing my finances. You see, the POSTERITY in finance is its wise application so that it can give more money.
Your View on Finances as a Believer with Respect to Giving in Church
Well, you know someone once told me he is a cheerful giver. He thought as a Pastor myself, I would be impressed by this sort of noble declaration. He made me understand he gives so much that even if he didn’t have to give, he would have to borrow to sow. He’s been taught in his church that you must never see a need in the church and not give. So, he thought, ‘borrowing in faith’ to sow was being spiritual. I’m sorry to say it, but that is just foolishness.
I teach ‘giving’, and I know it is good to give, but to borrow to give is unwise. What the Bible teaches is that we should WORK so that we can have to give. Secondly, if you give all you earn, you will be poor. It may sound as though you have faith but it is foolishness to do so. If you give all your salary as seed in January, February, March April as seed, how will you feed? How will you transport yourself to the office? How will you meet your light bill? How will you send to your parents? How will you even give offerings on during service?
No matter what we do, we must have savings. Your savings can be structured into: fixed assets, liquidity or investment
Again, it is unwise to say, “well, they asked us to buy assets;” then, you put all your cash into buying lands or real estate so that you don’t have ANY cash in bank. You need to have cash in bank just as you have WISE investments here and there.
This is true financial management!