Enhancing Your Family Income Potential
Do you sometimes wonder how some families manage to cope with life, especially where husband and wife are not paid salaries for months? The situation can only be imagined than described. Also, life could be tough for some households in Nigeria where some family members suffer job losses in banks and government establishments owing to the policy of ‘right-sizing’. New jobs are not being created and so paid employments are not readily available no matter your skills or experience.
Despite the challenges of paid employment, Nigeria is still a land of immense opportunities. There is no use grumbling about the economic situation in the country; you only need to think and do something. You need to plan your finances in order to generate additional income that could enhance your living standard.
You need to make more money in order to acquire the good things of life, that is access to comfortable housing, qualitative education, good health care facilities; balanced diet, transportation, security and reasonable leisure. Inflation has made accessibility or affordability of all these material needs, mere dreams for so many families, who are on fixed incomes.
To make money you need to understand the underlying principles of savings and investment. Money management is a skill that you need to learn. It is instructive to note that money is never a permanent friend to anybody, neither does it has a permanent place of abode; it flows in and out and gets retained more by people who appreciate its value and potential.
Anyone who wants to improve his living standard should move away from subsistence to a level of being rich. Those who are operating at the subsistence level are largely the unemployed — retrenched workers and retired people who never planned their finances while they were young. Those who become rich are usually good savers and investors.
The first step to enhancing your income potential is to admit that your present income level is just not sufficient to meet your bills. Put blatantly, admit that yours is a disguised poverty and that you want to become rich. Not only that, believe that there are things you can do to change the situation. There is need to be self-motivated and to take steps that could change your economic circumstance.
There is no use dreaming of becoming a multi-millionaire when you have not taken practical steps to realise your dreams. You need to set goals for yourself after you have analysed the range of investment opportunities in the market. You must learn the art and science of savings and investment. Savings requires sustained discipline and investment needs courage. To invest is to take some calculated risks. Never you throw caution to the winds; do not gamble. A gambler is often motivated by greed. You must seek counsel before taking investment decisions.
Generally, a household’s incomes are made up of the following: (i) basic salaries (ii) transport, housing, medical and other allowances; (iii) overtime pay (iv) dividends (v) life assurance claims (vi) interest income (vii) rent (viii) inheritance and gifts and (ix) profits from trade, micro businesses, profession or vocation.
Salaried people depend on their basic salaries and allowances. This category of people can enhance their income by working overtime or improving their job performance in order to earn promotion. A younger individual should study and enhance his professional and academic qualifications. It pays in the long run to do so, as it can accelerate your career growth, given an outstanding performance on the job.
As a working class, you should save and allocate a proportion of your income to invest in the money or capital market. In the money market, you can invest in treasury bills/certificates, government bonds or development loan stocks, as well as in bankers acceptances and commercial papers. Treasury bills/certificates which are government securities are safer and thus have lower risks. If you are investing in commercial papers or bankers acceptances, you need to ascertain the status of the issuing company as well as the agent bank.
Investment in land and buildings are veritable sources for hedging against inflation. Apart from providing personal accommodation, you should aim at letting part of your landed properties in order to enhance your income.
Life assurance policy is a form of savings as well as an investment. Depending on the type of life assurance policy you subscribe to, it can serve you well when you have job losses, retired or suffered physical disabilities. Life assurance policy could also help your family members to maintain the standard of life they have been used to in the event of your demise.
Investment in stock and shares of companies in the growing sectors of the economy are also good as you will get returns by way of dividends, bonuses and rights issues. Beyond that, investment in stocks could provide a seed capital in future to establish a micro-business.
Finally, it is advisable that every member of the household is encouraged to convert his hobbies into money making ventures. For example writing skills, musical and artistic talents, catering skills; event management and interior decoration skills can be converted to money making machines. You need to utilise your God given talents to make money. Stop complaining; examine yourself and do something positive to enhance your income henceforth.
Olusemore is the chief executive officer, Nesbet Consulting, a financial consultant and trainer, based in Lagos. |
