Seven Habits to Building Fortunes for the Future

Photo by Filip Urban on Unsplash

Financial independence is “the ability to live from the income of your resources.” – Jim Rohn.

One of my favourite meals as a kid was a loaf of bread and avocado. And about three decades later, my fondness for that recipe has not waned. The sight of avocados still fills me with childlike excitement. The only thing new is that I now know mashed avocado is called guacamole. I would never pass up the chance to buy avos on a diner’s menu, vegetable stall or grocery store shelf.

But my 18 years old daughter shouted the childish grin on my face during our last visit to the supermarket. I was shocked, amazed and happy all at once. My wife asked me to take the kids to get some bread, milk and beverages from the supermarket close to our home. I was to be the Uber driver because my daughter knew what to buy. I decided to stroll around the aisles at the store while they picked up the needed items. Then, as I walked past the spreads section, there it was! – a bowl of spicy guacamole. With a bowl in hand and a grin on my face, I walked up to put my choice spread in the shopping basket my daughter was carrying. The following brief conversation left me with some food for thought.

Sophia: “Dad! What are you doing with that?” She inquired as if I had just dropped contraband in the basket.

Me: Don’t you know guacamole, girl? It is my favourite spread.

Sophia: Dad, please take it back; that’s a waste of money. I will DIY some for you from the avos at home.

Me: It is not the same thing, Sophia. This brand is spicy.

Sophia: Well, mum has chillies at home too.

Me: Grrr! Okay.

I smiled for a different reason during the long walk back to the spread section. I was shocked that my daughter would deny me my pleasure, although I was the one paying. I had to make sure no one was close to me before imagining how such a conversation would have ended between my dad and me. After that thought, I had to check that my right cheek was still intact. I was amazed and happy that my girl was becoming money savvy. That was the second of such exchanges we have had. The first time, she refused to buy a sweater for herself because she “could get it cheaper at the China mart and she could print her design on it at mummy’s print shop.”

If she has that awareness, discipline and frugal mindset at age 18, she is on her way to personal financial success.

Enjoying our sumptuous homemade guacamole, I talked Sophia through the following seven steps to financial independence, which I gleaned from a book by Mary Hunt and from learning from Jim Rohn. And I trust these steps will also help you build fortunes for your future.

Financial independence is “the ability to live from the income of your resources.” – Jim Rohn.

Spend less than you earn. Best to consistently live below your means. And if you must borrow, let it be part of a strategy and not out of habit. “If your outgo exceeds your income, your upkeep becomes your downfall.” – Jim Rohn

Have a formula for saving, giving and spending. Some people recommend allocating your income into 10% for giving, 20% for saving and 70% for spending. The habit of doing all three is more important than the numbers. 

Anticipate the unexpected and plan accordingly. Prepare for irregular and unplanned expenses, such as repairs, medical bills, etc. This habit will minimise the shock and surprise that come from such costs.

Prepare a personal budget. Preparing a budget helps you to be proactive instead of reactive. You will identify your source(s) of income and plan where you will spend it.

Manage your creditworthiness. While you should not borrow involuntarily or habitually, you must maintain creditworthiness that will ensure you can access finance when you must borrow.

Borrow only what you can repay. In the same way, you should not spend more than you earn; you should not borrow beyond the amount you will be able to repay. Also, borrow for long-term strategic reasons like business loans and not short-term luxury items.

Practice personal financial planning. Assess your current financial situation – how much you own and owe. Define your financial goals – saving for retirement or starting a business. Then create a plan and act on it. And always review progress against your objectives and target, reevaluate your goals and be flexible enough to revise your plans if need be. 

If you consistently inculcate the above habits, you have the disciple to suppress the urge to spend, which will help you to avoid unmanageable debt and ensure your finances are always under your control.

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