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What is your mission statement

I bet you can recite your company’s mission statement without making reference to the employee brochure.

So what is your personal mission statement? You probably have one but it is all in your head. Get out your notebook and write it down. The usual ones I have come across include:

  • Retire at 50/60/70/100 years old
  • Save my first million
  • Go on holiday to the North Pole or Hawaii depending on your temperature tolerance
  • Buy a home
  • Save 6 months of my salary for emergency
  • Buy medical insurance
  • Raise a rainy day fund
  • Pay off all my debt by Christmas
  • Resign from employment and start my own business in 5 years

Now we are getting somewhere. With your mission or goals, you can work backwards and figure out how much you need to raise to enable you achieve your ambition. Ken Boyd says “When setting financial goals, be realistic, consider your values and consider your time frame.” from his Course of setting your financial goals on LinkedIn.

Most personal financial advice starts with “Pay yourself first”. I love this. So I made sure I put aside a certain amount to splurge every month. That was until I read the book Richest Man in Babylon by George S. Clason. According to him, the amount you pay yourself is not the amount you pay to the baker, tailor, shoemaker or grocer. It is the amount that you save or invest to improve your state in life or to cater for your needs when you are no longer able to earn a living.

Next, always have plans for the money you are saving. If you do not, your friends, relatives and tradesmen all have plans for your ‘gold’ says George S. Clason (clearly this is my reference book for personal financial management). Have you noticed how there are always emergencies just when you receive some money? I do not advocate for you to be a miser or not to help when needed. However, some emergencies need to be put through the 7 day test (or 48 hour test). The shoes you see on the street on your way home that are not in your budget, will they seem urgent in 48 hours or 7 days? Most likely not.

Ask. Always ask. Ask for discounts, ask how you can get cheaper service or goods. Never accept anything at face value. When I started using online banking, I was so excited by the convenience, that it did not occur to me to ask or check about the online banking charges. Turns out my bank would charge me Kshs.500 for every bank transfer I made.

Whenever I needed to change currency, I would use the automatic rate in the system. Each time the system would ask whether I had negotiated a rate with an agent of the bank and I would click no and proceed with my transaction. One day, I decided to call the bank and negotiate a rate. The negotiated rate was way better. I will not forget the difference between the negotiated and the system rate gave me Kshs.6,000 extra! I have never looked back.

Whenever you go to the bank, take the time to chat with the customer service or retail bankers. Ask them about various saving and investing products they have. Negotiate an increase on the interest rate on your savings account, find out what investment services they have that could be convenient for you. Do not take anything at face value.

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