Last week it was announced that soccer’s David Beckham and family had been advised to cut back on their staff.
According to the report the Beckhams have had to layoff 14 workers at their three of their four residencies.
“David and Victoria are multimillionaires but that doesn’t mean they have to waste money – and they were hemorrhaging,” a friend told reporters.
But wait a minute.
In July Forbes magazine listed Beckham as the best paid footballer in the world racking in at least $43.7m last year in salary and endorsement fees. To put in perspective the nearly sh100b he earned last year is almost the amounted our own Stanbic bank counted as profit after tax last year.
It is almost inconceivable that Beckham can blow all his money and retire to a life of destitution, but as a friend of mine keeps saying, “There is no money that is too much to finish.”
It is useful to note which expenses Beckham’s advisors have urged him to take a knife to – the staff expenses at his various mansions.
Beckham has earned top dollar all through his career but he is only 35, on the verge of retirement and likely to live past his 80th birthday, so his advisors are telling him to invest more while the going is good. The idea being, that when his earning power diminishes, seeing as it is based on his youthful good looks, he can sustain his current standard of living off the proceeds of his investments.
You can tell the potential or lack of thereof, of a person or company’s financial future by looking at their expenses.
An individual headed for a life of financial hardship has his expenses slanted towards consumption or instant gratification, while an individual with a chance of a bright financial future has his expenses biased more towards investment or delayed gratification.
An interesting survey was done of millionaires in the US in the 1980s, the results of which were published in the book “The Millionaire Next Door”, it showed for example that the average millionaire in America owned a car whose value was seven per cent of their net worth. If you think about it if this criteria was adhered to, to the letter in Uganda most of us would be riding bicycles or on foot.
What it means is that when you see a truly rich man own a luxury vehicle it has barely dented his balance sheet as opposed to the rest of us whose cars constitute a significant part of our net worth. To try an emulate the lifestyles of the rich and famous is like trying to grow a tree by planting leaves.
Given our largely Christian backgrounds aspiring to wealth is generally frowned upon, so let us think about it another way – Let us all aspire to financial security in our lifetime.
Where financial security is the ability to live without a salary, only earning income from our investments, without compromising our current standard of living.
How do you do this starting right here, right now? Shift your expenses towards investment and away from consumption. It’s simple. The initial shift away from consumption will be hard – I need my daily beer or I have to have those shoes or what will people say if we do not go on our annual holiday… I said it was simple I did not say it would be easy.
The point is, as many pensioners have discovered to their peril, no one is going to maintain your current lifestyle for you.
And if Beckham who collects his salary twice year ( when you are collecting millions of dollars in salary you don’t get paid per month) is preparing for the future by shifting his expenditure away from consumption who are you and I not to do t he same.