Finally, On Financial Capital

Rule No 1: Never lose money. Rule No 2: Never forget Rule No 1. ­– Warren Buffet

 Ok, I have recently written articles – social capital, intellectual capital, and skill capital – that placed financial capital on a cross destined for its death. If you have followed these articles (and are like me) you will still have it somewhere in your mind the thought that says, “Money is important!” and you would be right. To assume otherwise will be to deceive the one person you shouldn't – you.

There are some principles overseeing financial capital. One of such is a savings culture. We must have the courage to save out a percentage of our earnings consistently. It is better to save percentages rather than fixed amounts. Second is the principle of investments. We must also learn to invest what we have in worthy ventures (not get rich quick schemes) and watch our investments grow.

Having said this, my focus for this article are the factors that makes financial capital elusive to most of us. The first is the basic human emotion of fear. The fear of losing our money cripples us and ensures we do not take the investment steps we should have taken. Therefore we remain on the same spot. 

Closely associated with fear is the strong desire for the oxymoron, “financial security” we all have. We say, or, worse still, act this out by our frantic search for jobs that have “financial security.” In our desire to secure the future we shortchange ourselves today only to realize tomorrow that the “security” we sought was all but a fantasy.

Third is permitting debt to hold us down. Personal debts are bites into future funds. In anticipation for the money yet to come we activate the flight mode from present day needs by asking for soft loans. Debts leave us subject to the person that gave them to us.

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Finally is the waste factor. We activate this in various ways. To some it shows itself as impulsive spending, to others it is an addiction to trendy clothes, or phones, or gadgets. If you would take full advantage of the limited financial capital you have access to you must tend to your wastage.