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In today’s fast-paced world, individual achievement often takes precedence and thereby overshadowing the immense impact community engagement and intelligent investing can have on personal wealth as well as the society. Actively contributing to a community enriches not only your life, but that of those around you, and thereby really embracing the principles of what ‘Family Thyme’ stands for.
At the core of enriching yourself and the community, lies the concept of financial literacy, which boils down to understanding and managing your money effectively. Financial literacy empowers communities to make informed financial decisions, creating financially stable societies. Taking a page from Robert Kiyosaki’s “Rich Dad, Poor Dad”, knowing the difference between an asset and a liability, is the first step to understanding financial literacy.
Kiyosaki advocates for acquiring income-generating assets as a pathway to financial freedom. This journey extends beyond financial gains, while rather encompassing a holistic approach to life that focuses on continuous growth and positive societal impact. Importantly, understanding this concept is only one side of the equation, taking action brings it to life. Below are three charts that illustrate the flow of money through an individual’s cash cycle.
The red chart illustrates the habits of individuals not taking action and simply using their salaries to cover expenses, a poor community and just “scraping by”. The second chart is the middle-class community, your salary covers your liabilities and expenses, but in this case individuals do not create wealth and enrich communities. The third and final chart (green), represents a wealthy community. Acquiring assets provide individuals with additional income and more financial stability, therefore allowing them to actively contribute and make a difference to their community.
In the green chart it is clear that one’s wealth is not just a “river” with cash flowing through, but actually building a “reservoir” that you can draw from in future. It therefor makes sense to start investing and building your personal wealth. The process is simple, open an investment account and set up a monthly debit order of N$500.00. After twelve months you would be N$6000.00 wealthier, excluding any dividends, interest income or capital gains. Doing this consistently for five years would make you N$36,738.43 wealthier on a meagre 8.0% compounded return, this includes N$6,738.43 of interest income. Congratulations, you just created a second source of income and joined the wealthy community.
The benefits of building a wealthy community is more significant than most realize, in 1890, Marshall-Arrow-Romer (MAR) developed the “theory of knowledge spillovers”, which eludes to the idea that knowledge, skills, and behaviours can flow from one person to the next. Parents inherently employ this practice when they choose their children’s friends, physical activities and school subjects. Engaging with the right people and communities is a key element in enhancing your own life professionally, emotionally and socially. By operating alongside individuals that create wealth for their community, actually ends up inspiring others to do the same, thereby lifting up the entire community, one individual at time.
Building a community takes time, and when it comes to financial investments, time is one of the most important ingredients to success. The second being discipline, instead of succumbing to the trivial desires of impressing your neighbour, invest consistently and diversify to manage your risk. A straightforward recipe that will allow you to leverage your resources to uplift communities and build future generations. “Family Thyme” underscores the symbiotic relationship between personal success and community advancement, invest in yourself today so you can invest in your community tomorrow.
