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The Financial Journey of Life


Date Posted: 11/20/2012 10:28:44 PM

Posted By: dsimiyu1  Membership Level: Bronze  Total Points: 45

At age 25, I graduated from University. Luckily for me, I got married a year later, though not ‘luckily’ financially. As you all know, after graduation, if you don’t have an ‘uncle’ or ‘big brother’ in a higher office who will ensure you land your dream job in the first year after college, then you will have to hassle for a few more years before you get lucky.

Back to my story, I am married, this is the second year and I haven’t come by my dream job yet. At age 30, am planning to start having “young bloods,” in my house (note the singularity, my wife and I are one, so when I say am, I mean we). When I turn 36, the youngsters would require to be taken to school, require clothing, feeding and have a better roof over their heads-I mean over our heads.
That’s a picture of my financial journey which at the moment require proper planning to be realistic-I didn’t mention that I need to drive my wife when we will be expectant. That’s me, how about you?

As I have discovered, in the financial journey, individuals will go through stages of; wealth creation, wealth preservation and finally wealth distribution. But remember, during the financial journey there are problems of inadequate resources, inflation, being unprepared for some uncertain needs, lack of liquidity among many others.
It therefore requires that one has a sound financial plan that will shield them from the consequences of poor management of personal finances. Some of the consequences are; a lot of unnecessary debts (I trust you to keep this between us-I am a case study, I didn’t have a financial plan after graduating and as a result, I had lots of debts-but now am free from them, except the mortgage loan for

the rentals), and inability to meet basic obligations.
We all face some or most of these consequences because we went to school and college to learn how to make money but we have never been taught about money.

Financial success is not an education thing; it is not a race or tribe thing (a classic illustration is myself again, with my degree, working in a financial institution in our beloved country and here comes a fisherman who only understands his mother tongue-I bet he had only been to two or three classrooms. The man banks 70,000 ksh in a day while I, poor graduate I makes about 800 ksh in a day dressed in a suit). For the record, I did quit.

Financial problems can be troublesome monkeys on your back. You have to pay bills, which seem to grow bigger by the month. Your relatives need financial assistance, you want to buy a car, pay school fees for your kids, pay rent and a thousand other commitments. Loans do not seem to help; in fact your debts are already worrying. What is the way out? What you need is effective personal financial planning.

Personal financial planning is planning and management of personal finances in a manner that enables you achieve realistic and deliberately set personal goals in the easiest way with the resources available. It is a comprehensive and coordinated program of action that enables you to take charge of your finances. A road map that you can follow to take you from where you are today to where you want to be in the future. Like all maps, it must be in writing. A map guides a pilot on his or her flights; architectural drawings guide a contractor when building a house. How can you hope to build a strong financial future without a written plan? A plan that is not recorded is just a mere dream. With a written plan, you can judge whether it is realistic or not, you can also track your progress towards your goals better.

It helps to imagine your finances as a house supported by six pillars, which are; knowledge of current financial position, smart financial goals, effective income management, goal oriented investing, risk management, and finally implementation and review. All the six pillars must be in place and up to standard if your house is to be strong. Next time we might look at the six pillars in detail.

For now, all the best putting your house together.

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