Building generational wealth with Mary AYISI-BOADU: Avoid debt to build wealth

Building generational wealth with Mary AYISI-BOADU: Investing for your future

Financial education was never taught in schools, no matter which country you lived in or which school you attended. Most of us grew up not knowing how to manage our own finances. Some people earn a lot of money but end up wasting a lot of it, having nothing left at the end of each month.

We save less or have nothing left at all; and even if we save money, we end up withdrawing from our savings accounts and spending unnecessarily. We buy things we do not need, borrow money from banks and mismanage our funds. We have no vision of having a passive income or managing the resources we already have; so how on earth do we expect to be wealthy?

The first key to becoming wealthy is to understand and hold a belief that you already are wealthy. Re-evaluate your financial situation and find strategies to manage your finances.

As soon as you begin planning for your family, you should take your financial planning seriously; because having children comes with extra expenditure. When your children start nursery, primary school or university, you will need money to support them. When your children want to get married, it would be nice to support them financially too. When your children are buying a house but do not have enough money, it would be great to help them with their deposit money.

When you or your children are sick and you need medical care, how do you pay for the doctor? If your family is hungry and you need to give them food, what does it take to feed them? In retirement, who will look after you?

When you have to dress your children and send them to school to educate them, what does it take? Is it not the same money that will look after you? Money will not make you happy, but lack of money will certainly make you miserable – so it is about time we found out how to manage and save money for our future.

Everybody is born talented, but not all people use their talents to their own benefit. Many people cannot identify their talents, and so they go on in life doing menial jobs with incomes that barely get them through the month.

Even when they can’t afford it, people buy brand-new cars on credit – which lose value as soon as they leave the dealership. Some of you buy a Louis Vuitton bag at £1,000–5,000 when your rent is due and you have no house of your own. Too many people carry too much debt and don’t live within their means.

Instead, they try to impress people who don’t even like them or care what they do. Pampering yourself is good, but do not indulge too much in it. Don’t worry about getting your hair and nails done at the expense of your kids’ education or your investments for old age. Building funds for your pension is key.

People do not budget. They simply spend, living from pay cheque to pay cheque. When you do a written budget, it makes you live within your means. A written budget, when properly laid out, will make you think that you’ve got a pay increase or have been promoted with a better income. When you are faithful with the little, you will be given more to manage; so, write out your budget and stick to it. You will make progress with your finances when you start budgeting. When you have a written budget and stick to it in a disciplined way, you will have excess funds to clear your debt if you have any.

People don’t pay their bills on time simply because of poor organisation or not developing a simple strategy to cater for those bills. The best advice is to not make it complicated. Simply write it down in a notebook and pay it immediately. Or you can put it on direct debit for funds to go out when your account is in credit.

Prioritise your bills and communicate with creditors you’re not able to pay, so that they are aware of your situation. Some companies send monthly reports to credit reference bureaus, and these are the ones you want to quickly honour. The consequences of not paying can damage your credit score and credibility.

A lot of things are purchased with the hope of getting money in the future to settle the bills. No one can predict the future, so never buy things you cannot afford now. Don’t buy things on credit cards either. Failure to honour your payment will destroy your credit ratings with the credit reference agencies. Bad credit will make potential mortgage lenders deny you good home or car loans. Even if they are willing to help, they will offer this assistance with high interest rates. Don’t stay broke by overspending and not saving for future life events, because this could depress you.

When you are responsible with your credit, your children will copy your lifestyle. This will help them in their adult lives to avoid debt and be disciplined. You can make a wise and conscious decision to save money, which will compound and accumulate over years. Save for a rainy day, invest for your future and your generations’. Build wealth not debt.

>>>the writer is a professional investment banker with over 20 years of experience. She has worked and managed professionals and client portfolios at some of the top global investment banks such as Barclays, HSBC, Lloyds Banking Group, Wells Fargo Bank International N.A, Close Property Finance. Mary has over the years specialised in syndicated, bilateral, agency loans, FX and money market, swaps, futures, time deposits and bonds etc.

Mary is an author of four books including the famous From Debt To Wealth, The Student Entrepreneur, Be Positive Be Great, The Global Entrepreneur and the recently released Building Generational Wealth.

She is also a motivational speaker on personal finance, a financial coach and a mentor to everyone, especially the youth and young graduates. Mary is a generational thinker; she coaches people on how to avoid debt, how to return from debt and how to build wealth for financial security for self and generations. She can be reached on [email protected]


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