At the end of last month a video went out showing a convoy of high end 4WDs cars ferrying the final year students of a secondary school to their prom.
The young men, who probably harangued their parents to hire
the cars may be excused, we all know how it was to try and impress the ladies
at that age, but you have to wonder about their parents and school administration
for allowing this to happen.
I will never forget a few years ago seeing one of our
friends shelling out sh300,000 for a pair of Timberland boots for her small
brother to wear at his final year social, and thinking she was absolutely mad
to be paying the equivalent of his school fees for a few hours of flossing.
Inflation has clearly set in, because I can imagine in
addition to multimillion shilling outfit, parents now have to hire 4WDs and
limousines for the boys to wow their female counter parts.
It makes me laugh to think that we used to be ferried in the
school truck for socials. Alighting with all the dignity one could muster from the
back of the truck, must have been a very funny sight. Bless the ladies of those
days, they could see beyond that to the potential of their boyfriends.
"These same kids will grow up to be tone deaf MPs and
thieving officials wherever they work. They have been set up for a life that
they cannot afford to maintain through hard and diligent work...
It is no wonder then that one big shot on social media last
week declared that to be rich in Uganda you need to have a net worth of $1.1m
(sh4.98b), live in a house valued at at least sh500m, own two sh120m cars and
have your kids in schools that charge at least sh5m. What he described was high
living and not necessarily wealth.
And that is the thing, we think wealth is most manifest by
our spending habits. So these young men are unwittingly being sold the idea
that you need to look rich to be rich, which is far from the truth.
It has been shown that wealth depends more on your
discipline with money than how much you earn.
There is the urban legend of the manager who cannot make his
salary stretch to the end of the month, while his driver, who earns a fraction
of his salary, not only gets to the end of the month but has enough left over
to invest in his growing empire of mizigo rentals.
The difference between the two men is that the boss is
focused on a consumption lifestyle while the driver is focused on investing.
And that is the crux of the matter. There are only two ways
to spend your money, you either “eat” it or invest it. In the former case you
look rich even while living hand to mouth, while in the latter case you may not
look rich today, but you will be building wealth, which may very well lead to a
higher standard of living in the future.
A friend of mine has been investing diligently for the last
15 years. He has maintained his expenses as a proportion of his income, to
about 30 percent. So while ten years ago his expenses may not have been much to
write home about, his expenses now have grown to almost sh5million a month. The
remaining 70 percent he reinvests, increasing his income annually in the
process.
His mantra is he would rather be rich than look rich.
"I believe our lack of understanding of how to create wealth
is why our political leaders jump at any opportunity to dip their grubby
fingers in the public till and our company officials do the same....
They think that building wealth comes from grabbing. Being
men and women of above average intelligence they soon realise that in order to
sustain their high consumption living they need to grab more and more. Which
explains their bottomless greed. Hence their need to stay in government. There
are enough former public officials walking around shell shocked, wondering
where all their money went, because they do not have access to the treasury.
The trick with money is that if it is left seating around it
will diminish with time. A function of inflation. And if our brains are wired
towards consumption rather than investment, there is no money that cannot be
finished.
The lessons our children should be learning are, how to earn
money through hard, honest work, to live below their means, saving the surplus
and then how to make that money work for them through investment. The biggest
lesson of this process would then be that it takes time to create wealth.
Coming full circle to the young men and ladies at the aforementioned prom. By enabling this ostentatious display of wealth, our parents and schools are sending the wrong signals to their young wards, that pretending to be rich makes you rich...
In trying to keep up with these artificial standards these
young men and women will not be averse to reaping where they did not sow when
the opportunity presents itself.
