Time for Money or Money with Time

They were seated at the back of the commuter bus, commenting on anything they sighted. Then one of them saw a taxi on Kampala road and told his colleague, “Say how about if we went to Dubai and bought ourselves a taxi to operate?” Without missing a beat the colleague responded “With my high level of education I cannot stoop so low as becoming a taxi operator, I will get a well paying job.” His confident and almost arrogant response set me wondering whether he had ever come across the notion of financial freedom.

The second man was certainly well schooled in the concept of exchanging time for money, the thing we call a job. His colleague on the other was trying to break into a new realm of thinking, a situation where instead of time for money one can have both the time and the money.

The common definition of financial freedom is the state where an individual or household have sufficient assets or investments to meet their financial needs for the rest of their lives, without any person in the household having to work for money.

It is not only job seekers who stumble over the concept of financial freedom. I recently conducted a training for a professional group; focusing on personal and business financial management. I had asserted at the beginning of the training that whatever way participants defined financial success, the definition must include the element of financial freedom. Although I was training two different groups in different locations, it was very intriguing that the first question I was asked at each location was whether it is really possible for a person to attain financial freedom in Uganda?

These professionals were disturbed because what they knew about money up to that point was to work hard in order to get money, they had never thought about not working for money and yet having it or as we put it earlier on, having both the time and the money.

When I was much younger I had a frequently recurring dream in which I would be running away from an animal, an ogre to be specific, and it would always be that I either fell down or just got tired and the animal began to gain on me. Luckily I always woke up before the chasing ogre gobbled me up.

Let us face it; many times we may feel like the little boy in the dream when it comes to handling personal finances. It appears that our income is the boy in the dream who is running but not doing it fast enough. Our expense on the other hand is like the ogre, it always runs faster than the rate of increase of our income. The end result is that we always have more month at the end of the salary and then start finding ways of making ends meet.

Having or not having financial freedom is first and foremost a thing of the mind i.e. what is it that you know and believe regarding financial freedom. What we think, is in most instances, the cause of what we experience. There are thoughts that lead to financial freedom and there are also thoughts that will make financial freedom to be as elusive as a mirage. To become financially free requires the following commitments.

1. Be clear about where you want to land financially in 3, 5, 10 or whatever years ahead. This is important because your future is determined by your current decisions. Think about issues such as how you will finance your retirement or how you will pay secondary school and college fees for dependents or how to acquire assets that require lots of money for instance.

2. Spend less than what you earn. A business can only be profitable if its total sales exceed its total expenses. To make your life financially profitable it is imperative that you spend less than what you earn. Do not shift your expenses upwards with every increase in income you get.

3. Get business and investment education. The average university graduate takes 16 years in school: 7 years in primary school, 6 years in secondary school and 3 years in university. I may ask, how much time have you taken to study how to own and run a business or how to be a successful investor? You have to channel your savings and/or money you borrow into businesses and investments to enhance your chances of becoming financially free.

4. Acquire assets that either appreciate in value or yield a stream of revenue, dividends or interest. Non income generating assets will not take you ahead financially. Your first priority should be to acquire income generating assets and to reinvest the income they produce to generate even more income.

To aspire for and work towards attaining financial freedom is telling yourself that you can out run the ogre. Yes you can.

James Abola is a Business and Money Consultant & Coach. He regularly conducts financial trainings for businesses, employees and groups