For young African women: How to build wealth at every stage of your life
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.
10 excuses to give friends when you are too broke to go out
As Motherland Moguls, we know that every kobo, pesewa, and cent counts while chasing your dreams. So while we love our friends, going out often can be a financial burden. If you’re fortunate (or unfortunate – you choose) enough to live in an isolated town where eating out requires an hour commute to the city center, then you must be doing your fair share of saving. If you live in a major city – Lagos, Johannesburg, Nairobi – that new pop up down the road that sells overpriced cereal is tempting. To add to all of this, we all have that friend who always wants to eat out. But there are days when you really know you cannot afford to go out but don’t want them to know you’re skint. Yes, we know that, cause we’ve been there and had to come up excuses like 10 below. 1. “I didn’t do my BVN so my card is not working” This applies if you live in Nigeria, or all your money is deposited in a Nigerian account. If that is the case, you have the new banking policies to thank for this excuse. 2. “Oh, I’ve been eating at *insert restaurant name” too much” This excuse could come back and bite you, as it insinuates you go out to eat often. In the same vein, you could be left with the burden of deciding what restaurant, which leaves you with two options: either suggest somewhere so awful that you know nobody would agree to venturing near, or suggest something completely different and free! 3. “I forgot my card at home” This only works if you are actually out and about with them, or in their house and you have not brought out your card at all. This also means if you are dying for a bottle of water – no can do. 4. “Sorry, I have an appointment/meeting.” Please do not Snapchat anything other than your coffee mug after making this excuse. 5. “Oh my gosh, I wish you had told me earlier, I just ate and I AM STUFFED!” This works better with people who do not know you that well. Why? Because if you love food the way I love food, then your friends know the truth and will know you’re lying. 6. “I’ve been really busy, and need to take time out to rest” I like this one because even if all you’re doing is watching show re-runs with a tub of ice-cream, it makes you sounds somewhat important and occupied with life. This is less of an excuse and more of a genuine reason. Again, stay away from Snapchat. 7. “My parents want me home” This excuse varies in effectiveness based on your age. But if you and your friends are from traditional African homes, I’m sure it would have a decent level of effectiveness. 8. “I’m not feeling too well” – ties in with number 6 I’m slightly wary about this one because it may come to pass. However, if you’re have a little headache, a little exaggeration would not hurt. 9. “Stuck in school/work/at a family event… rain check?” It’s always nice when an excuse has a reason behind it, followed by the possibility of rescheduling. This is probably the most respectful of the bunch. 10. * Phone on flight mode * “Did not get your call/message, my phone just does that.” Not a big fan of this one. I think we can all agree it’s pretty rude. But a friend suggested this and it worked. It also helps to remember all the money you are saving from ignoring those calls and messages… Business Tip: Anytime you cancel on your friends, put that money into your savings accounts. It always pays to pay yourself first, ladies.
Quick Read: Your 1 minute guide to startup financing
You already know that it takes more than a stellar business plan and an ace team for your startup to thrive. You also need financing to get your ideas off the ground. COLD. HARD. CASH. But what type of financing is available for me, you ask? Well, you have 3 options: 1. DEBT FINANCING Your company receives a loan and gives its promise to repay the loan. It includes both secured and unsecured loans, and can be long-term or short-term. Pros: You aren’t giving away any part of your business. Cons: Defaulting on the loan = signing your life away. 2. EQUITY FINANCING Your company obtains finances from potential investors, family and friends, business angels or by issuing an Initial Public Offer (IPO). Pros: You are not obligated to pay a dividend Cons: Equity finance generates capital from external investors in return for a share of the business. 3. MEZZANINE FINANCING This is a combination of both debt and equity financing. It begins as debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. This type of financing allows the owner both debt and equity options. Pros: Allows you to get the money you need without giving up a huge chunk of your company’s ownerships…as long as you pay your debt on time. Cons: Interest rates are much higher than traditional debt financing. Want to learn more about financing and savings options for your business? Visit PAL Pensions to learn more about their unique products for young entrepreneurs.