Instant Money Part 2
Friday, April 13, 2012
It has been a while since I wrote part 1 on this title; distracted by other topics I forgot this unfinished business that Abdoulie Touray of Sahel tasked me with. But of late I have seen some disturbing thoughts about money expressed in the enlightened pages of Sheriff Bojang’s Standard Newspaper. In effect it evoked the “dirty lucre” hypocritical philosophy that we occasionally utter about the one thing almost all of us covet more than any other thing. In response to this broke philosopher’s anti-money sentiments, I wrote the following verse:
Some say you are dirty
But splurge you in party
They call you evil
Yet you are lovable
If you are not everything
Why are you craved by everyone
You attract a rave
Wherever you get waved
Are you not the most saved
That none shall waive
They act like knaves
Then give you the blame...
Yes money deserves a few verses in its honour and I hope money will honour me in return by coming my way in the millions. Say amen to that dear reader, that some of it may come your way too—hahaa!
My mystic friend, the wizard gave me some funny anecdote about money this morning. He told the story of the marabou whose bag of money was stolen to the chagrin of his followers. They asked the marabou to curse the thief so that he may live in misery. The wise old marabou responded that this thief will surely not live in misery as long as that money is in his hands; perhaps after the money gets finished he would start suffering. So much for the power of money! I must herein add the disclaimer that I am not advising any Sarahuleh to try this trick (Am from Badibou) for the scorned of the duped could follow you to the grave.
In part one of this series, we discussed a financial philosophy and the cornerstone of making money, savings. Let us continue by clarifying that savings should not be viewed as an end in itself. And when you think of savings, do not restrict it to putting money aside. You could save your wealth by investing in assets, like real estates, financial assets etc. If you should restrict yourself to keeping wealth in monetary terms alone, you may even end up losing your net worth. For example, in countries where the real interest rate is negative: i.e. the rate of inflation is higher than the interest rate on savings, when you save money you lose because the purchasing power of your money is being eroded as long as your money is kept in the bank.
Not for nothing are we thought in macroeconomic theory that savings equals investment. Money saved is better invested for as billionaire investor Warren Buffet teaches and practices, “Cash loses value overtime while a good company increases in value with time”. Now think about the foregoing quote once more, noting that it comes from “the stock-picking genius, who turned $9,800, most of it saved from paper routes,” into a personal net worth that is today billions of dollars. So let your money work for you! And the only way you can get your money to work for you is when you invest it. This creates more value for you the investor, and given that your investment is effective, it makes the pie bigger. With greater productive capacity in any system disposable income increases, thereby further creating more avenues for fruitful investment; a great recipe for a virtuous cycle. The foregoing premise is rendered even more eloquently by our wise old friend, the Richest Man in Babylon: “gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiplying even as the flocks of the field.”
Before I end this piece, let me emphasize the difference between savings and the hoarding of money or resources. The latter makes everybody worse off financial. Money is potential energy and its effect becomes felt and multiplied only when it is in use. A hundred dalasis below a Sarahuleh man’s mattress is as good as the mattress itself but put in a bank account, it could finance my printing of a book that I could sell and make two hundred dalasis. I could then use this to buy a bowl from a Badibunka at Albert market; the Badibunka man also makes another hundred out of it to buy milk from a Fula man to feed his family and the Fula uses that same money to buy fish from the Sererre woman. All these from a single one hundred dalasis that would have been as good as grass under someone’s mattress. And this example gets even better if the hundred dalasis which may not have been lent to me by the bank (because I may not have collateral) is added to a hundred more dalasis and used as venture capital to fund my book publishing business.
The next key to creating wealth is the quintessential element that catalyses success in every walk of life: Persistence! If you have saved money and started investing to make your money to work for you, you must be able to cultivate the strength to face the potential winds of change that are sure to test your mettle in your quest for riches. In Mandinka, wealth is called “naafulo”, which literarily means “the thing that comes twice”. This because, there is a tendency for wealth to be created and then lost but only to return again with the right kind of attitude; and this right attitude is nothing but persistence.
What better ending of part II of this series than to borrow again from the wisdom of the wizard of Omaha. Speaking about his two rules for creating wealth, Warren Buffet says that his first rule is “do not lose money.” How right he is. Many people are used to letting their dimes slip away when their pockets are full but later come to long for their pennies when broke. Take care of your finances, especially when your cup is full. Money is a resource that must be managed well if you are to enjoy long term financial freedom and success. The second rule from Warren Buffet is “do not forget rule number 1”!