How do you achieve financial resilience?

As you work, you are using your skills and capabilities to earn a living. You are earning because of your productivity and performance.  You get promotions until you reach a peak. This is the maximum point you can go and cannot stretch to work harder. You used to go to bed at 11:00pm and wake up at 5:00am, you can no longer manage to sustain this.

We are all human beings. We grow old and reach the peak. Depreciation comes between the age of 28 and 40 years. However, if you are a CEO earning on capability with no investments, you can’t get beyond that point. As your productivity falls, your wealth earning reduces. This is the poverty trap. Survival depends on productivity. In case of any major illness, you are prone to starving.

This is why one has to prepare for such situations. Your productivity will be based on your age. Your earnings shouldn’t be based on your productivity so much that as you are retiring, you are making the most income. The best wealth is when you earn without physically going to place of work. Financial independence is the ability to sustain your current lifestyle or improve it better even when you lost your job now. The person in position to sustain their lifestyle the longest is most successful. But do you achieve that.

The first rule of financial resilience is the football pitch; ‘Score as many goals, concede as less goals as possible.’ When a team scores many goals but concedes more does not win. It is only when you score four goals and concede three, that you win. You score ten goals, concede ten, you don’t win but stagnate.

The principle of success is, don’t spend more that you earn. Once this is achieved, then learn the art of money. Many people have money on their savings bank accounts. This is empowering the financial institution. It is unless you fix it that you earn some interest. Money is only productive if it is earning value. This calls for investment. It doesn’t matter how much you earn unless it is invested, it loses value over time.

Assuming your monthly salary is Ugx 1.5m net, how would you allocate it? Lack of success doesn’t depend on earning less salary but on lack of prioritization. You earn Ugx 5m, it is all spent and wasted. High salary doesn’t drive financial resilience?

It is the priorities that we make that creates financial resilience. You don’t succeed by constraining yourself. Much as you save, don’t look miserable. You can actually live a luxurious life provided the allocated percentage of earning can afford it. Success is about living within your means with clear choices and priorities. Where are you spending most of your money – future or today?  It is advisable to invest in long term ventures like stocks/ shares.

www.mustaphamugisa.com to download resources to improve your financial resilience

 

 

 

 

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