One of the most commonly used words in Nigeria these days and amongst Nigerians around the world is what you call “Japa”.
Japa is slang derived from the Yoruba language, and it simply means to run swiftly’, terminate, or retreat from a dangerous situation. Nigeria in recent months has witnessed a massive brain drain with the emigration of highly trained or qualified people to other countries, especially in the tech and medical industries.
The state of the economy leaves room for a better life, understandably so. A lot of Nigerians have relocated for greener pastures or to countries with better systems. While some have left because of fear of missing out, others have left in response to the current economic realities. It is, however, important to state that the entire world is undergoing a phase of very harsh economic realities, and none is entirely immune to harsh economic conditions. The Russia-Ukraine war continues to ravage Europe, as France and the United Kingdom continue to battle economic issues as well.
The decision to leave or continue to live in a country, province or geographical location is highly personal, and everyone who intends to do so must weigh their options and goals carefully.
It is one thing to leave a non-functioning system for a better one, but without understanding the concept of financial literacy, people live and work in a more structured economy and still suffer the same financial burdens that plagued them in the past.
In this article, I would like to talk about what I call “C.A.P.A.”; an acronym of four tips to help beat the Japa-demic fever that a lot of people have caught. Allow me to refer to them as the Japa-nomics tips.
It’s an acronym explaining four important things that will help you navigate this season, whether you have recently relocated or have plans to do so. They are also tips that will help you plan for the New Year and generally navigate your financial life.
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1. Cashflow- Master The Game
In the world of personal finance, your ability to thrive with your finances is a function of how much you are able to make and how much you are able to keep.
If you are currently broke, it means there is a broken flow of money in your finances. You are either not making as much money as you should, or you are spending more than you make. One question I get asked all the time is if it is easier to make more money or to reduce expenses, and my answer is usually simple.
To what extent can you cut down on expenses, especially for expenses that are very necessary?
It’s hard to negotiate a lower house rent or reduce the amount of food your family will need to consume. In my opinion, it is easier to make more money because you can monetize your talents and gifts; identify a product people need and start to supply it; start an additional business that will fetch you more money; and sell products for others and earn a commission.
In a season and time like this where inflation continues to ravage global economies, you need to keep a firm grip on your cash flow. The goal is to strengthen your cash flow so it doesn’t only meet your needs but will also provide you with more money to save, invest, and live your desired lifestyle. So whether you have “japa-ed” already, or you are in Nigeria, or whatever part of the world you are in, continue to strive to make ends meet, and ensure that your cash flow game is key. Look out for how you can improve your earning abilities so that you can make more cash flow. Consider the money-value correlation and work on becoming more valuable.
2. Add More- Work Your Savings Muscles
A few years ago, I strived to save about 70% of my income. I just wanted to see if it was possible. It saw me cutting down on a lot of nice-to-have items, but I achieved it. And not like I lived a miserly life whilst doing this, but it just meant that I had to close my eyes to things I didn’t need because I wanted to build my cash flow. I wanted to have more money available in savings and investments for more profitable uses, and I achieved quite a lot.
Times like this will reveal a lot of investment opportunities around the world, especially in real estate and other asset classes. Your cash flow and savings will be the tickets for leveraging such opportunities.
Quite a number of people make additional money all the time, but they spend more than they make and do not prioritize putting money aside from their cash flow.
The admonition here is to add more to your savings, add more to what you are keeping aside, what I will call your cash nest. Saving money is putting money aside, whilst investing is putting money to work.
When your cash flow increases, either by earning a higher salary or by making more profit in your business, you should endeavour to step up your savings goal as well. Move those extra funds out of the funds available for your everyday needs so you are not tempted to spend them when an unnecessary expense shows up.
3. Power of Many- Leverage Your Network, Profitably
Business entails building systems that can generate money by leveraging other people’s time, skills, resources, and money. By working with people, combining effort and energy, and doing stuff together with trustworthy people, you can achieve a lot that your personal finances may not allow you to do. I am a big fan of collaboration, and I have been a member of thrift groups where we have saved up money either for individual or collective projects. There are opportunities around the world, and we have seen an increase in collaborative efforts that have yielded really great results.
I want to encourage you to leverage the power of many. Explore what you can do together in twos and threes, in masterminds and clubs, with like-minded people. Explore what you can do together. These groups will thrive when people are committed to the success and achievement of their combined goals. Examples of the businesses and projects that can be done together may include the purchase of property to flip or for rental purposes whilst profits are apportioned according to the contribution levels.
4. Assets- Build A Formidable Base
If you desire to build wealth, one of your most important goals should be to build a portfolio of assets that can generate inflows for you. In accounting, we call assets things that have the potential to return economic benefits to you.
You have an asset when you have an investment that will yield returns in the near future.
A worthy mid-to long-term financial goal is to build a portfolio of assets.
What you currently earn might not be sufficient to buy assets that can generate much return, but keep putting it aside and, once it’s enough, you can buy an investment. You can buy an asset that has or that will have the potential to return economic value to you. It’s about working the muscles. Start with a mutual fund that you can keep adding funds to, consider dividend-paying stocks that you can hold over a long time, and stay consistent till you can buy a property that can earn you rental income. And higher and higher you will continue to go.
So here is how it works.
Keep building your Cashflow.
Send more of it into savings.
Leverage and work with you trusted network to do bigger projects.
Continue to build a formidable asset base.
Always remember that achieving financial success is a marathon and not a sprint. The more you commit to it, the better you will become at it.
Furthermore, the better you get familiar with your finances, the easier you are likely to achieve your financial goals.
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