Tag Archives: Jamaica

Business Lessons from Ben’ Down Market

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Recently, I travelled west to the parish of Trelawny, to find out more about the income-generating opportunities present in its capital town. A friend had told me of her success in selling some goods in a popular Wednesday sales venue in Falmouth, and I wanted to test the viability of a new product in the famed Ben’ Down Market.

As a resident of Kingston, I am sometimes guilty of thinking that the best economic activities take place in the first city. The reality is that there are many enterprising persons all across Jamaica who are creating wealth in a variety of ways. To learn more about what people were doing to make money in that side of the island, I decided to share market space with my colleague.

My adventure started off very early in the morning, as I was told that to secure a good spot we needed to be at the location by 5:00 am. The sun had not yet made an appearance when we arrived, but already there were dozens of persons working industriously in the bustling environs of the marketplace. Continue reading Business Lessons from Ben’ Down Market →

Money Thoughts Produce Money Results

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“For as he thinketh in his heart, so is he.” Proverbs 23:7

What do you think is your biggest problem with money? Is your income too small to take care of your everyday needs? Are your material desires always in excess of the money in your pocket? Is your bank account continually empty? Do you always have to borrow money to survive? Are you unable to accumulate enough funds to achieve your major financial goals?

Over several years of helping persons to improve their relationships with money, I have come to realise that the root cause of the financial issues they experience has little to do with figures and balances. For most people, the number one problem is not a lack of funds or viable opportunities. Instead, their major obstacle has to do with how they think about money. Continue reading Money Thoughts Produce Money Results →

Money Mission — Decrease Debt Dependency

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Last week, I looked at some of the financial challenges that often develop when persons seek to finance their budgetary needs with loans.

I am still alarmed at the increasing number of borrowers who have reached their credit ceiling, with the majority of their paycheques servicing their debt. Many of them don’t even receive enough take-home pay to buy basic necessities.

One of our Jamaican proverbs declares: “What fall off a head, mus’ drop pon shoulder;” This may be interpreted as – something that was meant for the father is sometimes passed on to his children.

This saying could be applied to our country’s debt problems. In the same way that our Government is highly indebted, so are our citizens suffering from an over-dependence on debt. Continue reading Money Mission — Decrease Debt Dependency →

Jamaicans in Debt Crisis

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Many years ago, I decided to start a little revolving loan scheme for micro entrepreneurs. I had access to some extra funds and thought that it would be a great idea to help a few business owners expand their operations with small disbursements. With my usual enthusiasm, I found a few persons who needed these services and my new venture was underway.

At first, the results were encouraging. A seamstress was able to purchase raw material for a large corporate order; a small wholesale owner was able to obtain another deep freeze for his establishment; a network marketer was able to purchase a large amount of products for sale to her customers. They all paid back their loans on time and I was buoyed by my early success.

However, some of the other loan recipients did not have similar outcomes. Although they had submitted proposals for how the money could help their business growth, it seemed that most of the funds went to either prop up their budget deficits or pay off old loans. Consequently, several persons found it difficult to maintain payments or kept coming back for more loans. Continue reading Jamaicans in Debt Crisis →

Is Borrowing for Education a Good Idea?

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Back-to-school time is here and many consumers are busy sourcing books, supplies, uniforms and other items for their children or for their own schooling. During this period, there is usually an increase in advertisements promoting educational assistance loans.

The reality is that many people have to borrow money to pay for these school expenses. While the ability to access financing for school purposes may seem like a blessing when your budget is tight, is it always a financially smart move? Continue reading Is Borrowing for Education a Good Idea? →

Going For Gold

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Jamaicans all across the world along with numerous friends of our nation are still celebrating the incredible success of our athletes at the recently concluded 2012 London Olympics. The infectious euphoria that was demonstrated by thousands of supporters from Half Way Tree, Jamaica, to Birmingham, England, was heartwarming to observe.

While we bask in the glory of winning 12 Olympic medals, we need to retain more than just a passing sense of pride from the achievements of our sports giants. There’s a lot that we can learn from their journey to the pinnacle of sporting competitions. Let’s look at how we can pattern their progress as we strive to attain our own personal and financial goals. Continue reading Going For Gold →

Business Lessons from Usain Bolt

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When Usain Bolt finished the 100 metres final of the 2012 London Olympics in a new meet record of 9.63 seconds, the eyes of millions of people were keenly watching his performance. With his brilliant accomplishment, the Jamaican sprint star demonstrated to his many fans around the world that he is indeed a legend in his own time.

In addition to his athletic prowess, I am inspired by Bolt for reasons outside of the sporting arena. After the 2009 Berlin World Athletics Championships, I reflected on some of the lessons that the sprinter could teach us about money. Discipline, self-belief and persistence were just some of Bolt’s habits that could also help us to achieve our personal and financial goals.

Bolt’s attitudes, actions and achievements continue to give us examples that are worthy of emulating. After watching him win another gold medal for Jamaica last Sunday, my thoughts turned to areas in his life that could educate and encourage entrepreneurs. Let’s look at some of the business lessons that we can learn from Bolt. Continue reading Business Lessons from Usain Bolt →

Money Mission: Emancipate yourself from financial slavery

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“Emancipate yourself from mental slavery; none but ourselves can free our minds.” – Marcus Garvey

This week and next Jamaica commemorates its 50th anniversary of Independence as well as 174 years of Emancipation from slavery. In the midst of all the celebratory events, some of us might question how independent or free we really are as a nation, with all the economic, social and political challenges that continue to hinder our productivity and prosperity.

In true Jamaican style, most of us will ‘tek kin teet kibba heart bun’ and enjoy the festivities, putting aside our concerns until after the holidays. However, all too soon, the pressing problems will resurface and vie for our urgent attention. When it comes to money, it seems that both the country and many of its citizens are still trapped in economic slavery.

What are some of the ways in which you can be held captive by the shackles of financial bondage? Continue reading Money Mission: Emancipate yourself from financial slavery →

Jamaican Money Resources

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Over the years, I have observed a steady increase in the number of Jamaicans who are trying to develop their money skills and find ways to improve their finances. There is a wealth of financial information available on the internet or in books and CDs; but very often the material has been developed for an overseas audience, so some of the details might not be relevant to our situation.

While basic money principles are the same regardless of the country of origin, there are certain financial issues that are unique to our culture that can only be adequately covered from a local viewpoint. It is therefore encouraging to see that some Jamaican authors have risen to the task of spreading financial literacy by sharing their knowledge and experiences about money.

Let’s look at some of the locally available books that aim to educate persons about personal finance and business matters. Continue reading Jamaican Money Resources →

The Debt vs. Savings Dilemma

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“I took out a home equity loan to consolidate two credit cards that had been maxed out and carry out repairs to my house. I am due to get a gratuity at the end of my contract which will be renewed in a few months. Should I use this money to pay off my debt or should I rebuild my savings?”

Let’s look at three factors that can help you to make the right decisions with your money:

The price of the debt

When borrowing money, many people only think how the loan proceeds will help them to take care of their immediate money needs, but don’t consider how the loan payments will further impact their cash flow. Very often, the loan that was supposed to solve their money woes only ends up adding to their financial distress.

One of the ways to resolve your debt vs savings dilemma is to examine the effect that your debt has on your monthly budget. Download a personal budget from the financial tools section of www.financiallysmart.org and fill out your expense and income details. This will help you to see if your earnings are currently able to fulfil all your spending requirements.

If you realise that your monthly loan payment is taking up a significant portion of your budget, and that it is hindering your ability to deal with other important expenses, then you should pay off your debt. Otherwise, you may be forced to go back to using credit cards to pay your bills, and you’ll end up in a worse financial position than before you consolidated your loans.

Another consideration is the interest rate on your debt. Although loan costs are relatively low at this time, the price of debt will almost always be higher than what you could earn on a secure savings or investment account. For example, if the loan interest rate is 12 per cent per annum, and your investment would net you an eight per cent return, then you would be better off without the debt.

The purpose of the debt

Let’s now take a look at the reasons you got into debt in the first place. Although you have not explained why you had two maxed-out credit cards, I will assume that you used them to deal with expenses that your income could not cover. Like most of us, you probably also made some unwise spending choices over the years, and got carried away with using your credit.

As I have said on many occasions, if you borrow to finance an imbalance in your budget, you will only start a long-term cycle of indebtedness. If your income is insufficient to meet your needs it is impossible to successfully utilise debt to take care of the shortfall. Borrowing will only make your situation worse, as the underlying problem has not been resolved.

As they say in Jamaica, “short cut draw blood”. And quick loan fixes will only sink you into a deep, dark abyss of debt. The only way to deal with an income shortfall is to cut back on expenses wherever possible or try to earn more to plug the holes in your budget. If this is your situation, get rid of your loan and ensure that you reduce spending or increase your earnings.

Unfortunately, you have replaced your credit card debt with a home equity loan. Credit cards are unsecured, as they are not covered by any form of collateral. This is one of the reasons why the interest rate is much higher. Although the home equity loan rate is lower, you will put your property at risk if you run into difficulties paying your loan. Pay off your debt to secure your home.

The pain of the debt

Money psychology plays an important part in how people make financial decisions. In addition to looking at the numbers surrounding your debt — monthly loan repayments, budget balances and interest rates — you need to look at the emotional aspects of your indebtedness. In other words, how does being in debt make you feel?

Fear, shame, powerlessness, worry and stress are just some of the negative emotions that are commonly used to describe how people feel about their debt situations. Very often, persons with a chronic dependence on debt can get into a state of depression that ultimately affects their work, health, and their relationships with family and friends.

Some people get a false sense of security from having money in the bank and expensive trinkets while maintaining large loan balances. However, if your assets value the same amount as your liabilities, in reality your net worth is zero. You should also understand that your interest payments are actually putting your potential wealth into the coffers of your financial institution.

Although you may be able to cover your monthly loan payments right now, your financial situation could take a turn for the worse at any time, thanks to a major health challenge or job loss. Therefore, it might be best for you to start afresh with a clean slate; pay off your debt and use the previous loan repayments to fund a new savings plan.

Copyright © 2012 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, July 19, 2012

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Cherryl is a money coach and business mentor, and founder of Financially S.M.A.R.T. Services. See more of her work at www.entrepreneursinjamaica.com and www.financiallysmart.org. Contact Cherryl

Continue reading The Debt vs. Savings Dilemma →