This is part one. Read part two here.
The Young African Woman – How to Build Wealth at Every Stage of Your Life
I recently attended a seminar where one of the key speakers mentioned that there are three main categories that are forecasted to thrive and succeed in this season: Youths, Africans, and Women. It is therefore a good time to be a Young African Woman.
In order to succeed as a Young African Woman and to ‘win’ in all areas of your life, you must be in control of your finances and build wealth. It is therefore important to understand the different stages of life i.e. the financial life cycle and how to build wealth at each stage.
I would start from the girl child, in order to ensure that we also empower our children, sisters, students, mentees etc. This is the most important stage because if you get it right at the stage, you are likely to be wealthy.
There are different theories on the number of stages in a financial life cycle, however, for simplicity they’ve been split into 5 stages.
Stage 1: The African Girl Child
This is typically between ages 0-12. At this stage, we begin to understand the value of money i.e. N200 can buy more sweets than N100. We begin to have conversations like
Kid: “Mum, why can’t we buy a bicycle?”
Mum: “Because we do not have enough money at the moment.”
Kid: “But mum, what about the money in my piggy bank? I have a lot of money in my piggy bank.”
Mum: “Honey, N500 is not enough to buy a bicycle.”
Generally, we believe that money is to be used to buy junk food and also to buy toys. At this stage we receive pocket money.
Financially intelligent parents would begin to teach their children the basics of savings via a piggy bank or a kids’ account. They would also learn the concept of earning money by being paid for household chores as well as through mini businesses such as making and selling lemonade or bracelets etc.
I attended a conference where a speakers stated that when she was younger, her parents paid her whenever she did her household chores and that was how she learnt the value of hard work and earning money.
My daughters started their first business at age 6 and 3. During their Christmas holiday, they made personalized bracelets from beads and with virtues such as love, faith etc, and sold them to their aunties, uncles and friends. Shortly after, they received an order to make personalized bracelets for a birthday party. Within two weeks, they made about N30, 000. I introduced the concept of a piggy bank and also taught them how to give as well.
I also had a very proud moment the other day. My daughter had received some money as a gift from her uncle at Church to buy ice cream. A blind man came to ask for money and she heard me say I didn’t have any cash left. She then said to me “Mummy, he can have this money” and she gave him her ice cream money.
At a very young age, I opened investment accounts for my daughters with a monthly direct debit in place. Warren Buffet began investing also at this stage. He has also created an online club for kids called the Secret Millionaires club where kids learn the basics of entrepreneurship and wealth management. This is a good place to start.
Stage 2: The African Teenage Girl
This is typically between ages 13-19. At this stage, we develop a better understanding of money. Our needs include buying top-up cards for mobile phones, shopping and entertainment etc.
We understand that it is not everything you want that you can get. We also start earning money via jobs like baby-sitting, etc. In developed economies, at this stage, teenagers are sent to work in fast food restaurants or retail clothing stores to earn some money. Some teenagers are also required to work in companies as interns during holidays. Ty Bello, Nigeria’s renowned photographer started her hair styling business at age 15. One of Africa’s youngest billionaires Ashish Thakker started his first business at age 16.
When you get to University, you begin to understand the importance of managing your finances. In University, you are also introduced to the concept of credit cards, over drafts etc. It is important to educate teenagers on the pros and cons of credit cards and overdrafts. A lot of students get it wrong and end up in a lot of debt once they graduate from university, and this affects their ability to build wealth in other stages of their life.
Key things to consider at this stage include:
- Learn the value of hard work and earning money through internships, holiday jobs
- Start a business using your talents and gifts
- Start a savings and investing culture
- Be involved in the process of managing bank accounts and investing.
- Read books on personal finance
How did you fare in these stages as a young person? If you have passed these 2 stages, you can still share them with a young person or a parent who might need it.
In Part II, we discuss – stage 3: The Young African Woman, stage 4: The African Woman, and stage 5: The Older African Woman.