I recently read a report which showed that many working professionals in a major European country, have enough savings to last 18 days, if they ever lost their jobs! The squirrel, a small animal that collects nuts during the summer, for the long winter, would no doubt be quite amused.
A business associate, who ran a construction company, came to me once complaining bitterly that people were stealing from him. He pointed out that he had done huge projects, in the past, and yet he was now totally broke. "How could this be"?!
" The problem, is if I tell you, the truth, I will lose you as a friend." I told him.
"Please, please tell me!" He begged.
Okay:
To start with, always, always remember that, it is harder to hold onto money, than to make money. Teach it to your children, if nothing else.
People who inherit businesses, or money, generally end up losing everything. The first thing you need to know, is when you are making money, and when you are not. A large turnover, or revenue, does not mean you are making money.
Then I said to him, "before you tell me, how much you made on this project, and that, let's talk rather about how much you saved, from what you made on each project."
Then he looked at me, with a bemused almost blank look on his face.
Then after a while, he said, "I made investments".
I looked at him, in the eye, and said, "you know its not true. You bought a nice car, you built a nice house, you..... You did not invest, in your capacity to make more money, and you did not SAVE, for the rainy day."
Then I said, "do you want us to carry on, this discussion; it could become very painful for you?"
He looked down on the ground.
I stopped.
Friends, if you have a job, any job; no matter how little you make: SAVE something.
If you are running a business, no matter, how small: SAVE something.
Financial literacy, is about making sound financial decisions:
Step #1.
hold on to your money!
To be continued...
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