Savings day 11
Yesterday my friend called for financial advise. He will be starting his first job as a recent graduate in January and was confused about something they were told in induction.
Not to mention any names, a particular bank came to visit them and had a presentation on how they were willing to lend them large amount of money to acquire properties now and they can start making small payment to progress with their income level. This is amount of money the bank would not ordinarily lend them as they cannot afford but nonetheless will give to them because of their prospective (future) earning abilities.
He could not really fully understand the whole thing hence why he was asking for advise. The problem here is that, I am not against the fact the bank is willing to lend them money, but I am afraid of the fact that they are borrowing away their future earning capabilities. They are setting themselves in a trap that they would regret later. Imagine committing to a loan of N$700 000 when your only income is N$11 000. How much more will the bank be prepared to lend you when your income triple? do the math.
Just like my friend, this is the story of every young professional. We get trapped in the system of borrowings that takes away freedom from us. Before you can even start savings for retirement, future home, dream car and build your house in the village, you have already hand-capped yourself.
We are too brain washed to believe if you do not own a car, a house and the latest phone then you have not “arrived”. Only when you taste the freedom of being debt free you will understand that you can still arrive by charting your own path at your own pace.
On the savings challenge: Today is another zero spending challenge. I packed breakfast from home and had lunch at my friend’s place.
Current savings balance at day 11: N$ 281.
Inga Kusha ngula