Tag Archives: Money Coach

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 →

Pride Goes Before a Financial Fall

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“Pride goes before destruction, a haughty spirit before a fall.” – Proverbs 16:18 (NIV)

 Act 1: Pride – a high opinion of your own importance

Jonathan, a 34-year-old accountant, makes an average income and lives in an affordable rented one-bedroom midtown flat. He inherited a 2001 Toyota from his father, which performs reliably without needing major repairs. However, despite his reasonably comfortable existence, Jonathan is very dissatisfied with his present position.

Many of Jonathan’s former schoolmates have advanced rapidly up the corporate ladder, and now hold major positions in banking and product distribution companies. As the valedictorian for his graduating year at high school, Jonathan is painfully aware that most of his high-income colleagues were less-than-stellar achievers in school.

Every time they get together, Jonathan compares himself with his friends and thinks that he comes up short in every area. As they discuss the latest high-tech features of their high-end SUVs and share details of their recent jaunts to luxury resorts, he resents the fact that his income does not allow him to live the lifestyle that he thinks he really deserves. Continue reading Pride Goes Before a Financial Fall →

Money Mission: Reduce, Reuse, Repair, Recycle

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In today’s economy, many consumer products are made to be disposable. Gone are the days when you could buy an item that could be used for several years or even passed down through generations.

It seems that some goods are designed to last for a specific time; once they have reached that point, an internal self-destruct feature is activated and they suddenly stop working.

Manufacturers recognise that one of the keys to sustainable profits is to create products that their customers will consume quickly and purchase again. So, even though their offerings are made to the highest standards and are built to last, some marketers will continually release new versions of their ‘must-have’ items to ensure that consumers discard the old for the new. Continue reading Money Mission: Reduce, Reuse, Repair, Recycle →

Turn Criticism Into Cash

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When I encourage persons to look for ways to generate extra income, I often get the response that although they may have some great money-making inspirations, they are afraid of the possible reaction that they will get from friends and colleagues.

One of the biggest deterrents to creativity is our fear of being criticised, and this can cause us to abandon good opportunities to earn. In Simple Steps to Impossible Dreams, author Steven K Scott explains that your “efforts to avoid criticism subvert and suffocate your creative thinking and sabotage your launch before you even attempt to achieve your dreams”.

Words can bring long-term hurt

Why do we avoid criticism like the plague, sacrificing the potential gain that may be our reward for trying something new? The simple answer is that being criticised hurts. Continue reading Turn Criticism Into Cash →

Money Mission: Build a Money Machine

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Wouldn’t it be wonderful if you could design a machine that can generate cash every hour of the day? Whether you were eating, playing or sleeping, this device would ensure that you were consistently supplied with a steady stream of income. Your money problems would be history and the lifestyle of the financially free would be yours forever.

While many of us would love to possess a magic money machine, this apparatus would probably be impossible to build, and it would definitely be illegal. However, the concept of creating an income source that could eventually produce earnings without your personal effort is something that is entirely in your power to achieve.

Do you have to work to earn?

Most of us have grown up with the idea that the only way to earn money was to physically work for it. We were taught in school to study hard, get good grades and look for a nice job with attractive fringe benefits. For the most part, our education system does not foster entrepreneurial thinking which focuses on teaching people how to create income-generating systems. Continue reading Money Mission: Build a Money Machine →

More Money: Eat, Drink, Earn

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It would definitely be an understatement to say that Jamaican people love to eat. It is a treasured part of our culture to celebrate food; we enjoy not just partaking of a good meal, but preparing it as well. There are tremendous opportunities for persons to create profit from satisfying our never-ending demand for food.

The Jamaica Observer newspaper showcases many established and nascent businesses in our local food industry at its Annual Food Awards [last held May 31, 2012]. All of the participants have devoted considerable time, money and effort to create products that bring pleasure to people who love to eat and drink Jamaican fare.

Although it may take a relatively large investment to make it big in the food business, there is plenty of room for ordinary persons to get involved as well. As we continue to look at different ways to make extra money in these challenging economic times, let’s look at some practical possibilities to generate income in your spare time with food. Continue reading More Money: Eat, Drink, Earn →

Achieving Impossible Dreams

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In my continuous search for solutions to various kinds of money problems over the past 10 years, I have read dozens of books about money success and goal accomplishment. I thought that I was aware of all the top gurus in these genres and that I had analysed and assimilated all of their expert advice.

It wasn’t until recently that I discovered that one of the foremost writers on personal and professional achievement had somehow escaped my scrutiny. Upon the recommendation of a good friend who praised the work of best-selling author Steven K. Scott, I decided to take a look at his work, Simple Steps to Impossible Dreams.

Any book that promised to reveal secrets known by the world’s most successful people would definitely arouse my interest, so I eagerly delved in to find out what Scott could teach me about achieving the impossible. From the very first chapter I realised that I had unearthed a treasure map that could outline the route to accomplishing my wildest aspirations. Continue reading Achieving Impossible Dreams →