Money Moves



Financial independence is not a subject that is widely discussed in this part of the world. For some, it’s simply impossible to attain and for others, financial independence is providently for a select few. What most of us are accustomed with is; secure a well paid job after school so you can retire with a good pension pay. This is good, but there is something better. You don’t have to wait and hope. You don’t have to expend your lifetime energies making somewhere else comfortable in life. Be your own man. You can live life on your own terms. You can be financially independent. I guess you are already thinking of how you can become financially independent. You can find the answer in the response I got from a well to do friend, when I interviewed him on this subject.  

Me: When we say financial independence, what do we mean?….In your opinion, what does financial independence mean?

Him: Financial independence simply means having enough financial resources…

Me: Mm-Hmm

Him: …or having enough assets to generate financial income or revenue to cater for one’s needs for a lifetime without necessarily working.

Me: Okay.

Him: So it could also be that you are working….

Me: Ahuh

Him: But most at times, when we say financial independence, it comes with you not working.

Me: Mm-Hmm

Him: Yes! So if you are not working and if you have enough money in your account or you have a business running which generates you enough revenue, or you have an asset which brings you cash, you are financially independent. It means that you are sufficient; you don’t fall on people to be okay financially…

Me: You can fall on yourself, even if you don’t work for like five months, a year…

Him: Even if you don’t work for the rest of your life and you have money, that’s fine. You are financially independent.

Me: Alright. So at what stage should I be thinking about financial independence?

Him: Immediately you start earning an income.

Me: Whether allowance or monthly salary or something?

Him: Yes! Immediately you start earning an income. Because truth of the matter is, the earlier you become financially independent, the more comfortable you will be in life.

Me: Okay. So I shouldn’t be thinking about it when I’m getting to say, my pension age.

Him: No oo! Why would you do that?! Why would you….hahahahahahahaha….

Me: Eerrrr…because I mean….

Him: No, no, no oo. For instance, when I started university….

Me: ..because I’m young. Let’s say I’m earning GH¢500.00. I mean, I have to…at the end of the day….expenditure…blow it up on one or two stuff.

Him: Nobody will question the age at which you become financially independent. But the goal is be financially independent as early as possible. So start saving early; that’s all.

Me: So at a young age, I need to start thinking about financial independence.

Him: Yeah! You need to even have that mindset; the mindset of “financial independence.” It is not for people who are in their fifties or sixties, no! Ah! I have been having this conversation with a friend. People think when you are a young guy, you need to work to make money to live. But I keep telling him, there is nothing wrong being a young guy and sleeping, and making money and living your life. Nobody will question you, ‘cause you don’t ask anyone for money. At least, you have your business running; you have your assets or you have some money you are living on. You are financially independent. As far as financial independence is concerned, age doesn’t matter. But first of all, you need to have that mindset and work towards it.

Me: In our part of the world, I don’t think most people think of financial independence. They mostly dream of a house full of money whenever the issue financial independence comes to mind.

Him: See, you can have all the money in this world; you will spend everything if you don’t put it work. It’s as simple as that. You are not going to live for three or four years; you are going to live for seventy years, eighty years. So you need to have a financial engine that will work and bring you money.

Me: Okay

Him: If you have money in your account to sort you out for the rest of your life, fine. That’s okay. But ideally, you need to have a business running that will generate income….

Me: Even if you have money in your account, the money has to generate money.

Him: Yeah, anything can happen. And I’ll keep saying the best bank in this world is the economy. Put your money in the economy and then that’s it. You are fine.  

Me: Start something uh?

Him: Yeah

Me: Do a business.

Him: The economy is not one institution that could go down at anytime. And even if the economy goes down, you have your assets. Nobody can take your assets from you. But if an institution goes down, that’s it. Your life has ended.

Me: Alright. So how can I attain this financial independence? Let’s say…..Do you have a method? Do you have a formula? How do I attain this?

Him: It varies. It depends on your income level. Obviously, someone who is earning GH¢5,000.00 can attain financial independence sooner than someone earning GH¢2,000.00. So your salary or income level or revenue is a determining factor. But personally, what I did was, when I started university, I always said “at age thirty I wasn’t going to work for anyone.” So it’s a mindset.

Me: Okay.

Him: So it means that, I will do “anything” or enter “anywhere” or practically put in the effort to make sure I achieve this goal by thirty. So first and foremost, you need to have that mindset.

Me: That is why you have this status, “millionaire at age thirty”

Him: “Millionaire at thirty” ahhh yes (laughing) that’s why I have that status, “millionaire at thirty.” So you don’t need to be fifty years or sixty years to attain financial independence, no.

Me: Ahuh…

Him: No, not at all. Even if you start working at age twenty four or twenty five and you are able to accumulate some money or start a business and it grows successfully, you have sustainable income and a sustainable company, you are fine. You have financial independence. If you secure a job and you are earning GH¢1,000,000.00, you can’t say you have financial independence.

Me: Mm-hmm

Him: The reason being that, you can be sacked at anytime; the company can collapse at anytime. And if the money you are earning only comes from that company, what happens next? So your independence will just be for a short period. But mostly, financial independence should practically be for the rest of your life.

Me: So does it mean it is impossible for an employee to be financially independent? Perhaps, someone working for another cannot be financially independent.

Him: That is why in the definition, I said “not necessarily working.” You can be working and be financially independent and you can also not be working and be financially independent. It all depends on you.

Me: So what should I do, as a young person who wants to be financially independent? Are there steps? Maybe twenty four steps to financial independence…

Him: No oo, there are no twenty four steps….

Me: Twenty steps…

Him: We are…we are not seeking salvation…

Me: Eighty processes….(laughing)

Him: We are not seeking…….(laughing). See, when we defined financial independence, we talked of a mechanism to generate income or to have enough money to sort you out. So, all these things come about as a result of saving. If you are able to sufficiently save, then you would have enough in your account in good time to relax without necessarily working.

Me: Okay

Him: You can use the monies you’ve saved to start a business or acquire an asset. When I say an asset, I mean you can acquire a tractor, concrete mixer etc and hire them out. So you acquire an asset or start a business that will bring in the money. That’s financial independence. So it boils down to saving.

You need to save….As a young guy, you need to save as much as you can. We have this investment technique. We say if you earn GH¢1,000.00, spend GH¢400.00, save GH¢400.00, and use GH¢200.00 for your T & T (transportation). You don’t have a car, so use GH¢200.00 for your transport in and out, and small small misc…and then save GH¢400.00 and use for GH¢400.00 for other expenses. So with this GH¢400.00 you are saving, if you are able to save for ten months, you have GH¢4,000.00. In twelve months, you have GH¢4,800.00. If you are able to do this for five years, you’ll have enough money to start a business that you want. If you start this business or you acquire this asset that brings you income, you are fine. So with financial independence, you don’t need to be sixty or fifty or forty or……..

Me: And you don’t need to have a rich background to be financially independent.

Him: No, you don’t have to. You don’t necessarily have to. If you have, fine, nobody can blame you for that. But you don’t need to. If only you are hard working and you are willing to put in the effort, you are good to go. ‘Cause truth to be told, it is not easy to be financially independent. It takes a lot of discipline. Some expenses are unnecessary; you need to do away with them

Me: Alright, last words.

Him: Last words?

Me: Maybe you have something else to say about financial independence?

Him: No matter the business you run or the assets you have, remember, assets can depreciate. They can become obsolete; they can break down. So as time goes on, you need to upgrade, you need to develop. So if it’s a business, you need to bring in new ideas, you need to grow it to keep the revenue coming in. If you don’t grow the business, it will collapse. You will be doing your business a disservice if you don’t engage other people. Like they say, “two heads are better than one.” So it’s okay to bring people in to grow the business. And also if you have an asset and you use it for some time, sell it and buy a new one, and you’ll be fine.

Me: Okay, thank you. We are done.   

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