Dorothée Loorbach · Personal Finance · Web Articles

TEN things

In the next few weeks, I plan to post a series of articles dubbed ‘risky‘. The intention is to guide the development of personal financial strategies by examining risks that could cause great harm and distress to our physical, emotional, social, financial and spiritual well-being if not properly managed. Specifically, I will explore 5 risks that touch on strategy, debt, reputation, lifestyle and citizenry. For this bi-week, however, I share a captivating TED talk by Dorothée Loorbach and my reflections from her presentation.

Dorothée speaks of inherited convictions that led her to not managing money properly. Life obligations later taught her that money is important and a useful means to taking care of herself and loved ones. She goes on explain that money equals time and we must consciously spend it. If not, we will end up giving so much for so little yet we could actually make more money and have some good time left over. In her journey, Dorothée also realizes that money equals value and that self-worth is not determined by a high charge-out rate but viewing ourselves as people who are well deserving of a seat at the table.

What people say doesn’t matter is a statement that has never made more sense than it did in this TEDx episode. “It’s nothing really personal.” Dorothée says. “What people think and say about me comes from their view of the world. However, if people is you then what people say matters.” We must be kind to ourselves and know that our responses – not circumstances – define us.

REITs, derivatives, cryptocurrency are terms that sometimes make me shy away from reading business finance articles.  I am sure Dorothée may have at one point shared my sentiments but discerned it important to engage in the world of finance if she was to survive. After putting in the work, Dorothée realized that it’s really simple. That everything she’s learnt could have been learnt from her grandmother. Spend less, Earn more, Invest wisely, Value self. She acknowledges that it is not that easy because Parkinson’s Law which states that our expenses will always rise to match our income always comes into play. Her call is for listeners to do whatever it takes to break this law and my call for you at this point is to do whatever it takes to watch the clip 🙂

Day and night I felt this blind panic. I couldn’t breathe. There was no way out. I was suffocating. So the first thing and the only thing I could do was breathe.Being broke sucks and I absolutely relate to Dorothée’s narration but love more what she says next. “I freed my mind and I made a decision that I was going to be successful in my direction of my purpose. I found my focus. I stopped sabotaging myself and I became successful.” Do you know what that success strategy involves? Staying broke. Dorothée shares a quote by Epictetus where he which puts forward that wealth consists not in having great possessions but in having few wants. For her it is time with her daughter and self. I need more time to think about mine but hope one day I too can say money is not important.

EASY? Listening to the experiences of others definitely makes the burden light, the journey easier and perhaps even enjoyable. Okay enjoyable is a stretch. Staying broke (and other financial disciplines) is not for the fainthearted but Dorothée shows us that it is possible. The truth, however, is that breakthroughs can sometimes take longer than we anticipate. But isn’t it encouraging to know that… God will meet all your needs according to the riches of his glory in Christ Jesus ~ Philippians 4:19

Emergencies · Financial Strategy · Personal Finance

RAINY days

A couple of months ago I attended a personal finance workshop that challenged us to set aside 18 to 24 months in emergency savings. 18 months was too much an ask and my mind settled for the renowned standard of 3 to 6 months. Today’s market realities, however, reveal that desired work and business opportunities do not come as easily as it was during the Industrial Age. It can take longer than 6 months to get re-absorbed into the employment sector or land that big-ticket client after a major customer exit. Rainy days may easily turn to extended periods of heavy storm and unprecedented fog. Building a 24-month fund – in light of this – sounds decent but what about the attractive investment opportunities one would like to take advantage of or the pressing financial obligations requiring attention? Perhaps a longer term personal finance strategy would go a long way in managing financial exigencies.

Let’s consider the example of large corporations who as part of their occupational health and safety policies have documented guidance to prepare for and respond to all emergencies. Their commitment is towards the safety and well-being of it’s people and communities, the timely resolution of emergency situations and the protection of company and personal properties. Underpinning this practice is the Emergency Management Cycle model that allows organizations and individuals alike to anticipate disasters likely to affect them and think of ways of reducing impact or preventing the disasters altogether. A personal finance lens would probably describe the phases in the cycle as follows:Emergency Management Cycle

  1. Mitigation: How can financial emergencies or their damaging effects be prevented? Budgeting is a financial discipline that goes a long way in averting unnecessary financial pressures. Another mitigation strategy would be to annually take out medical, property and / or life insurance for meeting regular and adverse circumstances
  2. Preparedness: How can we prepare to handle financial emergencies? Core to financial preparedness is financial literacy which empowers individuals to make informed and effective spending, earning, saving / investment, protection and borrowing decisions. Individuals with a basic or advanced grasp of financial concepts manage money better
  3. Response: What actions should be undertaken during financial emergencies? Anxiety can make the brain lock either temporarily or for abnormally long periods of time. Defining – in advance – possible emergencies that could occur and their corresponding responses (including reaching out to family or friends for help) can quickly avert further devastation. Another culprit to inaction is wanting to keep up appearances.  Whilst responding to financial distress can be a very humbling experience, the resulting benefits make the process all worth it
  4. Recovery: What actions should I take to return to (a safer) normal? Restoring one’s physical, emotional, economic and social well-being is the goal of this final stage. Severe debt or financial loss can cause depression and even suicide. Part of a successful personal strategy is being open to counselling, psychotherapy and other professionally prescribed assistance. These medical approaches will not only calm the body, mind and spirit but also bring fresh and exciting alternatives to living

EASY? When I begun this blog and up-to the time of conceptualizing this series, I did not foresee any emergencies. All views were from the simple-heart of a personal finance enthusiast. I  am currently dealing with an uneasy situation and relieved to have one or two things in place. Still, I am anxious. Researching for this article has helped me appreciate that disasters exist through time and I need not beat myself up or anyone else for that matter. I choose to respond in faith that God will bring everything to a new and peaceful normal. That said, I can’t think of a better closing for this piece than “By faith Noah, being warned by God concerning events as yet unseen, in reverent fear constructed an ark for the saving of his household…” ~ Hebrews 11:7a

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