“Human wants are endless but the means to satisfy them are not. So you must learn how to separate your needs from your wants” Chief reached for his glass and took a sip before continuing.
“This is the second rule of wealth; Plug leaks in your bank account”
They were sitting outside on Chief’s rooftop patio, sipping cold drinks. The sun was beginning to set, tinting the sky with warm, orange hues. Faint sounds of Lagos traffic, barely audible, travelled lazily through the humid, evening air.
Today was the fourth lesson and Emeka was beginning to have a change of heart. He had spent the week thinking about what Chief had taught so far and his initial skepticism was fading. Perhaps, ignorance of these simple truths were all that prevented him from being rich.
Chief lifted his glass to the sunlight, peering within its amber depths as if he had seen an undesirable speck before speaking.
“There is a saying that goes thus ‘As income rises, so do expenses rise to meet it.” I learned from my own experience, that if you desire to be wealthy, you need to break this cycle.”
“Chief,” Emeka interjected. “What you are saying is the truth. I am always broke at the end of the month. It has been like this from when I was earning a corper’s salary up till now, even after full time employment plus several pay increments”.
“I am glad you recognize this”. Chief nodded. “Recognition is the first step to changing it”. “The next step is to identify what is draining your account and put a stop to it”
“To be very honest, Chief, I don’t know where all my money goes. It just seems to vanish” Emeka replied helplessly.
“Well, like the proverbial missing, black goat, sought in daylight, if you look, you will find it”. Chief said “Here is what you are going to do. Gather your bank statements, receipts and bills like your DSTV, PHCN, internet, gym memberships etc for the last three months. Luckily, a lot of these payments are online nowadays so you should have most of these records available. In addition, amortise your annual payments such as rent and service charge into monthly amounts.
“Amor…gini? Emeka asked with a puzzled look on his face.
“Amortise. I thought you were a banker” Chief said sarcastically. “Simply put, divide the amount by 12 and set aside a monthly sum so that your annual obligations don’t catch you by surprise”
“After you have done that, Chief continued “look through your bank statements and try to calculate how much you spent on discretionary expenses like food, clothes, going out with the guys etc. in the last three months. Nowadays, I hear that there are apps that will help you neatly categorise this information. Be sure to include the money you send to your parents and other relatives. This is Nigeria.”
Chief stopped to take a sip from his drink and continued to speak.
“Once you have done that, you will have a clear idea, perhaps for the first time in your life of where your money is going. Subtract these expenses from your income of the last three months and you will see why you are in debt. I suspect that number is currently negative but you are going to work on changing it.”
Chief sat back in his chair and gave Emeka a piercing look. “Here is how you will change it. Listen very carefully”.
Emeka leaned forward in rapt attention as Chief proceeded.
“You have to bring down your expenditures to 60% of your income. Here are some suggestions; downgrade your DSTV and internet package, eliminate your gym membership and jog on this our road instead. Cut down on weekend hangouts, you can still meet up with the guys but consider going less frequently and spending less”.
““Which kind life?” Emeka wailed. “I thought you said that 20% was the recommended portion for saving, that leaves me with 80% to spend not 60%!”
“You are a Christian, aren’t you? Chief asked. “You have to pay your 10% tithe. Your creditors are already formidable enough. Don’t add God to the list. The other 10% you are setting aside is to pay Mama Iyabo and all the others you are owing. These deductions i.e your 20% savings, 10% tithe and 10% debt repayments sum up to 40%. Once your debts are paid off, you could increase your spending to include the 10% from debt repayment but my recommendation would be to channel it to your savings since you would already be used to living on 60%. 20% savings is the minimum, nothing says you cannot make it 30%”
Emeka sank back in his chair, dejected as Chief continued. “Young man, it is not as hard as you think its going to be, believe me. There will be an initial period of adjustment but the satisfaction, confidence and peace of mind that you gain will be worth it. Stop trying to impress your friends, work on impressing your account officer instead”.
Chief leaned forward.
“Now, in order for this plan to work, there are some measures you need to put in place. Remember GEJ’s story of the goat and the yam, abi? Emeka nodded.
“Good” Chief said, nodding his head “We need to separate the goat, which in this case is you, from the yam”. Chief paused for emphasis. “Immediately your salary lands, don’t allow the money sit in your account. Set up direct debits to automatically pay your tithe, pay your debts and move your savings into a different account, preferably one without an ATM card”.
Chief turning to Emeka, with a big smile on his face, said.
“There are many more things I wish to say to you but you cannot bear them right now…”
Emeka recognising the quote, laughed half heartedly. This wasn’t what he thought it was going to be, but if this was the way to wealth, he was willing to give it a try.
