Future dreams: Tighten the belt today, enjoy the fruits tomorrow
By People Reporter, August 23, 2019Waithaka Gatumia
Even before I think about why I should buy something my brain releases a chemical called dopamine. It causes me to imagine the feeling of owning the item. How people will see me and how it will feel to be seen. I like that feeling. It transports me into the future of my dreams and if I have the cash or credit I end up buying before I think.
Advertisers know how to rouse that feeling in us: Drink this and you will look as happy and beautiful as the happy beautiful people in this ad. If I buy this car it will feel like I have made it. Others will see me and think I have made it. Why would I not want that feeling, I mean you only live once, right?
The problem is that the feeling does not last. Sometimes it is gone the moment you buy and realise you now have a loan to pay off. Other times it lasts until a new model comes out and yours now seems old and you no longer stand out in the crowd. We get caught up trying to look wealthy and never create the wealth that will allow us to have that feeling all the time.
At Centonomy we define wealth as the ability to live the lifestyle you want without having to work for it. That means that you work very hard to build assets that will pay you to live the lifestyle you want. Those who have created wealth focus on assets.
Let us say you can afford a loan of Sh500,000 and you would like to buy a car for personal use. This means you will pay Sh11,376 every month for five years at the current rate of 13 per cent. Owning the car means that you will pay even more for insurance, maintenance, fuel, parking and more. The car will never put any money in your pocket. It will make you feel good and get you to places in comfort and convenience, but it will not put any money in your pocket.
If you are thinking about creating wealth you could try this instead. Borrow the Sh500,000 and buy five boda boda motorcycles. Riders will pay you Sh1,500 per day for six days a week. That amounts to Sh9,000 per week and Sh36,000 per month. You will, therefore, be able to pay off the loan premium of Sh11,376 and still have Sh24,624 leftover. You could use this profit to buy the car you want and still have some cash to save and invest.
Will it be easy? No! Is it possible? YES! If it was easy then everyone would do it. Choosing to focus on assets will set you on the right path to creating wealth. You will not get caught up in the vicious cycle of buying things that add no financial value to your life and you will start building for a rich future.