By Livingstone Mukasa
I consider my life work to be about helping people make economic progress. However, not many people understand what this economic progress journey looks like. So I have taken on the liberty to define it for you and create clarity on how it’s supposed to be. Once you are able to identify where you are on this journey, you can know what your next point of call will be and worse, where you might fall back to.
1. Economic Destitution
Everything is a war, a struggle to find where to sleep, what to eat, clothing and you basically live on the fringes of capitalism. You are more likely to be a charity case and living at the mercy of those with a good heart. If you are a child, there no point to be concerned but you are pretty exposed if, unfortunately, anything happens to your benefactors that make them unable to continue supporting you.
2. Food War
At this stage you have some form of income but it’s hardly enough. You essentially live hand to mouth. Planting seeds and waiting for them to germinate is hard. So you decide to fight to get enough food and rent or a small house. You begin to see a difference/ need to save and invest.
3. Economic Vulnerability
Here the basics are covered but you realize you are one pay cheque away from trouble. One missed sell or invoice payment takes you back to the food war or even worse. The thing to watch out at this stage is trying to help beyond what you can afford. Your family may be worse off but you are better off (and for them) splinting forward. You will help them at stage number 5.
4. Economic Stability
You begin to buy space between you and the poverty wolf. You own a home, a car and the basics are taken of and for months or even years. You continue to save and invest and acquire solid assets that might outlive you. You may be still smarting from those years in the economic wilderness. By now you could be classified as Middle-Class. Society begins to notice that you are well on your way to economic development and begin to call you flattering names like Boss, Hajji etc. These names are also a call to help others in the dire straits of capitalism. At this moment, you can help but you have to take a measured approach otherwise you could jeopardize your own journey. This is also the hardest place to fall from as people will call you all sorts of names for daring to do better than them. However, by now you should clearly know you still have miles to go. The good news is that you have the mental resources, social capital and experience to take the economics fight further than you ever thought possible.
5. Financial Independence
The goal at this stage shifts to passive income. You want to use money to make money and not more of your time. You begin to value freedom to do things your way. You are now tested metal and issues of retiring well and with assets concern you and you begin to plan accordingly. The goal at this point is to have assets exceeding 150 months of monthly living expenses to make you solid financially that even if you lose your primary source of income, there is hardly any risk that you slip back. By the time most people get to this stage, they are in their late 40s or 50s. Most people can stop here and still do well.
6. Getting Rich (Shooting for the 1% of the 1% percent)
Making money becomes a sport rather than a means of survival. You no longer need to show off to convince anyone that you have made it. Your influence and social capital is solid and you might be involved/serving on a couple of boards and leading on some social causes. Surprisingly, these interactions expand your ability to make money. Usually, this is a great place to influence government policy and politics.
7. Creating wealth for generations
You are the cream de la crème, a champion, economic player and with medals to your name. It’s hard to “hide” your net worth as everyone seems to have an opinion of your net worth. You begin to earn money in days what takes others years to do the same. At this stage, your legacy matters more. This could translate in setting up a foundation or giving to social causes or other areas that matter to you. At this stage, your business activities could pose a systemic risk to entire sectors of the economy. So influencing government policy through your direct involvement or lobbying makes lots of sense. You are keenly aware that more money soon buys power and more power can result in more money.
There you go, mark yourself and see at what stage you are. Knowing where you are will help you know where you are heading. Do not assume that you are at a stage that you are not. I know mine, what’s yours?
Livingstone Mukasa is an Author of two books #investingforthefuture and #thegreatfinancialrebuild. He is the “People’s Professor of Streetnomics” and CEO of Four One Financial Services Limited and recently took on a new role as Chief Development Officer for Bitbricks Limited . Call/ WhatsApp +256772459167 Email: livinbusiness@gmail.com
