Thread by @mentorshipzim

Thread 2: critical financial perspectives for a young person (particularly living in Zimbabwe)

I would like to start by addressing a common misconception on the value of financial education or personal finance coaching that people like myself offer

In 2018, I signed up to be an exhibitor at a youth-organized fair at Moto Republik. Apart from the exhibition stand, I got a chance to sit down with some youths and talk about money.

After the session, one guy came to me and said, "thanks for the presentation but I felt like you should have talked about the macroeconomic issues. These personal finance issues are kind of irrelevant if the economy is not working well." Fair point, I understood him well.

Surely how can you budget when you are struggling to make a living because the environment is crap? He had a valid point but it was limited in perspective. I asked him a few questions. "Do you know how much money you need for the week or for the month?" He said, "I'm not sure."

"Do you know the difference between a transactional account and a savings account?" I asked.
He said he wasn't sure what I meant. 
"Ok, how about the difference between debit and a credit card?"
He said he didn't know.

I asked these questions to help him see that having knowledge on personal finance matters is just AS IMPORTANT as fixing macroeconomic issues. Why? Because if he was in a functional economy, he would struggle to fully benefit because he didn't know the basics of how money works.

Ideally, Personal Finance coaching should not be removed from the complexity of the environment in which the beneficiary operates. In fact, being in control of your personal finances is crucial if you are to successfully manage the risk of living in a dysfunctional economy.

My role as a financial educator is to provide you with the knowledge, skills, and tools to better manage your money, whether you are in a functional economy like our neighbors or a volatile economy such as ours. Granted this is difficult if you are in a war zone or in Zimbabwe.

However, if you are adequately empowered, you can reduce the impact of the risks of the environment that we live in. You need to understand that money principles are universal. How you apply them will vary due to context but the principles remain the same.

Now that we have settled; as a young person, how can you effectively manage your money in a country like Zim?

1. What is financial success to you? Be clear on this definition. This is what we call your financial philosophy. Your actions & habits will emanate from this philosophy. What you will do (particularly in financial decisions) is an outflow of who you are & what you believe!

2. What does that success look like practically? People often say I want to make it in life. How much money qualifies making it? What sort of quality of life are you pursuing? No this is not destination-like teaching. But it's learning to be specific in thinking about finances.

Eg: I wanted to work from home; to pursue passions & purpose without worrying about monthly bills. So I started investing in passive income sources. In 2019, I took the plunge from full-time work because the passive income source was generating enough to pay me from home.

That's what success in my own life and context looks like. What does yours look like? If you were to give a figure (eg to a prospective employer) that is enough to enable you to live the life you desire, how much would it be? Know it and articulate it well.

3. What habits are you putting in place to make sure you reach that level of financial success? Habits maketh a man. This is what will determine how far you will go in actualizing your success. You can make lots of money. You can even win lots of it overnight.

But the life you create out of that money is determined by your financial habits. There is no secret or shortcut to lasting wealth. It is built by your habits. The past few days, we have heard about the benefits of different financial practices. Budgeting, saving, investing etc.

What's your practical strategy to implement these in your life? You need discipline & patience in applying these habits. This March, I will be releasing a book that details some of the practical tools I used in building financial success. It's out during @GlobalMoneyWeek

So I will leave you with those three-pointers to stew on in the weeks leading up to #GMW2021

End of thread 2.

Thread 3 is coming up this afternoon! We looking at Small Business Finance & How to do financial mgt in Family Businesses.