Malawians tipped on financial freedom

Malawian business and financial market’s entity, Alliance Capital Limited, has gone out of it way to offer the public lessons in personal economic management to gain financial freedom.

The company is involved in pension fund asset management, portfolio investment management, money market brokerage, share Investment services and corporate finance advisory.

The tips on personal finance management is coming from Alliance Capital Limited at a time when many Malawians are finding it hard top make ends means with the economy still in a recovery mode.

In his weekly ‘At the market’ column Alliance Capital Deputy chief executive officer Christian Majavina said financial freedom can be achieved by anyone although it takes time and strict discipline to attain.

Malawi Alliance Capital boss

Majavina: Alliance Capital Boss

“Financial freedom is a great thing, it really is. But to get there it takes work as one needs to know himself/herself in terms of goals and vision most are of improvement plus limitations. The more you understand yourself, the more solid your foundation for success,” said Majavina.

He said one must know where their debt is, how much is being spent on it, and where else their money is leaking away to so that control of expenditure is instituted and managed.

“Take two steps to do this. First, reduce your spending. Do whatever it takes: cut up your store cards and most of your credit cards, set yourself a weekly cash budget ,don’t carry checks and cards around with you and when you run out of your weekly allowance that’s it, no more; identify those things you can cut out. Second, put all your debts, where possible, into one place,” Majavina said.

He put an emphasis on taking on putting in place firm foundations for financial controls with some good planning by setting up a spending budget that covers all outgoings and stick to it.

“Second, if you have any debts to pay off, set up an automatic payment to come out of your pay check the day it goes into your account – that way you won’t miss it. Third, set up a savings plan. That’s right, even though things are tough and you’re still in debt, set up a savings plan. Find the highest interest account available and start paying in and again set up an automatic payment,” he said.

Majavina said the point of saving something is not – at this stage – to build wealth but pay off your debts and feel positive about it since managing top save money on a weekly basis is a positive thing one can do “as a way of telling yourself that you are not a slave to your debts, that you are actually in control of your finances and you can stay in control of them”.

He said the sure way to go after paying all debt to more saving to gain financial prosperity.

“Now we’re moving on to building wealth. A major part of your strategy has to be cash. Cash is the only true financial wealth, so you need some. You need a lot. Now you have cleared your debts and you have your spending under limits, you have some spare cash to save.

“Find the highest interest account you can and start depositing regular amounts. Each month put as much into your account as possible. Set up an automatic payment to go from your salary account,” he said.

The company stresses that after hitting savings target one needs to start getting creative with money by finding another highest interest possible account and transfer about a bit of the funds into it.

They say high interest bank accounts are fine and they’re a fairly safe place to build wealth – slowly. But alternatively there are other investment opportunities which involve taking some risks. There are three ways; one is to start a business; two is to invest in property; three is to invest in stocks and bonds.

Alliance Capital concludes by saying, “Set goals and put plans in place. And make sure you plan to enjoy your financial freedom – whatever it means to you – because if you turn the achievement of your dreams into a form of unremitting slavery you will end up sabotaging yourself”.

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