For the last two years, we have lived through a pandemic that literally halted and shifted our ways of life and threatened to change the course of humanity, Russia invaded Ukraine and exacerbated the challenges that Covid-19 seemly had laid the foundation for, ultimately driving up inflation to some of the highest levels seen in history.
Whilst we are still holding our breath there is already talk of a recession given the aggressive interest rate increases to stave off the high inflation. In the case of Botswana, we have seen inflation rise from 3%, pre-covid period to 14.3% today. This trend has been consistent across most economies.
All these factors have impacted not only our health, but also will most likely leave a mark on our wealth. If there is one thing that we all can agree on, is that while these tough times do not last, they do leave a lasting impression on all of us and most importantly instill valuable lessons. And one of the critical lessons to learn is that there has never been a better time to rethink our finances with the main objective of not only growing it, but also protecting it and sustaining it.
The aggressive nature of the interest rate increases over the last 9 months implies a direct dent to our income as we must honour our ever-increasing debt obligations. Therefore, there is need for us to review and reassess our approach to our finances through:
- Managing our expenditure by establishing and operating within a household budget living within our means. Eliminating all unnecessary spending.
- Managing debt wisely so it works for us. Choosing to make debt your faithful servant as opposed to it being a ruthless master.
- Saving more towards retirement and choosing those investments where real returns can be achieved.
- Striving to build passive income. One of the ways of achieving this is building a business that can work without you.
- Diversifying our sources of income and applying the skillsets the period we have emerged from has helped develop.
In closing, the impact of the recent two years has left a mark on us, however it has also presented an opportunity for further wealth growth through applying the valuable lessons this period has provided. We can survive these turbulent times not only through a positive mindset, but also taking real action to continue being able to grow and protect our wealth.
Wilfred Mpai, ActionCOACH Business Coach
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