Personal Finance

Which money wave are you riding?

When my gross salary was Ksh 350,000, my sister’s salary was Ksh 16,000, we both ate from the 1st to the 30th of the month. We both got sick occasionally and we both stayed under a roof. We both took kids to school and we both got the same level of reprimands from parents as to how we weren’t supporting them as mandated in the holy book.

We occasionally met and discussed how life was hard. How school fee was a mess and how health care had become extraordinarily expensive. At parting time, I would tip her for her transport, sometimes I would give her the only money left on me and I would be forced to “fuliza” the next day to cover for my fuel.

Bottom line, we were both struggling financially.

I listened to friends across. There was one particular Nziza, whose salary rose from Ksh70k to Ksh700k in 3 years, and there was a visible change in her life. There was a car and her children had changed the school from the east side to the west side while her rent jumped up four notches. She still had more month left at the end of her money each month.

Then there was this MCA’s Ms. Clande, a friend of mine. She worked for a multinational bank and she had a steady boyfriend. Occasionally, before Mr. MCA showed up on her door, she would borrow some money from me to cover her pressing emergencies, and I would occasionally do the same when my finances were under the water. Then she got Mr. MCA and she was categorical that if MCA’s job was to park in a secure location between her limbs at night, in return, she also should park her Vitz purchased by the boyfriend in a gated community on Gatanga road. It happened, Mr. MCA complied but her financial circumstances remained the same.

One day in a discussion with Ms. Clande, she conveyed frustration at the way money was treating her. She wondered why there was a time she used to pay her own rent and all other expenses on her own from her salary, yet she now has two other people chipping in to pay her expenses but she still has to borrow and sometimes endure bad hair days.

There must be something wrong with money.

In the banking sector where I used to work, we occasionally heard stories about the behavior of customer accounts.  Customers had a maximum over which their money never exceeded. In fact, at account opening, a customer was asked how much money he/she expects to be deposited in the account and a trigger is set to alert bank officials when that ceiling is exceeded.

On the floor side, a customer’s closing balance at the end of the month would be within a particular range. For most, this range was approximately zero and life ground on!

This ceiling and floor reflect the level of financial awareness for the customer. It is like a radio frequency that is set and you operate within that.

Ever wondered why in interviews, you are asked how much you would like to be paid and how much you were earning before? Your new prospective employer is trying to figure out your money wavelength. He is trying to see whether you are within the company’s wavelength or significantly outside of it.

When you answer those two questions and you are completely out of your former employer’s range, the next question would be why do you want to be paid so much higher than what you used to earn. In this question, they are trying to establish what is this new awareness that is moving you from a lower wavelength to a higher one.

So what is money wavelength?

Think about it in this way. My sister earning Ksh16k is programmed to accept this as her maximum pay. She coins her life within this range. Her children are born and naturalized in this situation. She lives in a shark on the east side and interacts with dust and dirt without much ado. Her stomach is strong, it can digest both roast maize and can handle partially rotting tomatoes in equal measure. She does her shopping in her vicinity, she may have never encountered refined cooking oil, she uses cooking fat.

The things she listens, hears, smells, and does are all a reinforcement of this environment. All her neighbors are doing the same and therefore everything is normal.

On the other side, am living near the west side. I am lower middle class. I have a car and instead of paying bus fare, I fuel my car. Instead of paying rent I service a mortgage. Instead of using cooking fat, I go for refined cooking oil. My neighbors have shunned public schools because they are cheap and crowded and taken their children to a group of schools, I do follow suit. Everything in my immediate environment is reinforcing me to do this.

If my sister is listening to the equivalent of a vernacular TV station in her money management, I am listening to CNN. Although both are TV, what we are hearing and seeing is very different. it means we are tuned into different wavelengths and therefore our behaviors must be different.

We are differently tuned to different money wavelengths. How much we earn and ask for in terms of pay is controlled by these wavelengths that we are broadcasting at.

What should happen to move someone up or down these money wavelengths?

If my sister came to stay with me, she will realize that even tea in my house is taken in Chinese porcelain as opposed to her tea in Kenpoly. But both are teas and we both get our dose of caffeine from it.

She will eavesdrop on conversations with my friends and she will realize that we are talking about people earning Ksh1m a month and she would start to question why she is earning less than 1 percent of that.

If she stays longer, she will start hearing us talk about complex investments and passive incomes that she may have never heard of before.

Last week a friend of mine shocked me when he said he has an acquaintance who was planning to set up a company to provide private military services to governments. Maybe the most sophisticated business my sister has heard of is the supermarket business.

In summary, financial education is the best way to tune up or down these wavelengths.

In my studies, I have realized that there are four wavelengths, struggling, maintaining, comfortable and very comfortable and it does not matter how much money is involved! Read about them here.

There has to be a mental attitude change for one to inch up or slide down these wavelengths.

Take an example of a professional earning Ksh350k a month. He has set his life around it and, in most cases, he ends up with zero or negative balance in his account at the end of the month. For him to move up the money wavelength, he has to acquire new attitudes. If he is paying a mortgage and he is tied down for the next 20 years, how can he move around? He can either improve his skills and get another well-paying job and reduce the number of years by half or he can totally change his money attitudes and decide to find a new bigger source of income by leaving employment and risking into the business world.

If he chooses the jump from employment to business, then he will face immense turbulence in his personal life. Most give up, most try and fail and go back to employment, while a few succeed, those are the entrepreneurs, they are the ones who tune up to a higher money wavelength.

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