FOOD FOR THOUGHT BY Phillip Bonera BEING SMART….FINANCIALLY SMART. It’s time I let you all know that I play basketball. Very fast in my dribbling, good at ‘AND 1’ and definitely not a dunker given that am vertically disadvantaged. That beside the point, let’s get right into business. Literally. In every sector there are the captains of industry. Bill Gates in Technology, J P Morgan in Finance, Donald Trump in real estate. In the basketball world, the culprits will be the usual; Michael Jordan and Magic Johnson. Let’s shed light on another great retired player by the name Shaquille ‘Shaq’ O’neal. Shaq’s career is one filled with many championships, awards, deals and a lot of money. He first got drafted into the National Basketball Association (N.B.A), at the age of twenty. One of the most interesting things about Shaq is that when he got his first pay cheque as player, he spent the first million dollars in about 30 minutes. He later received a call from his banker warning him that if the trend continued, he would be yet another statistic of athletes who ended up bankrupt. Shaquille quickly realized that he wasn’t as smart as he thought he was. He then went back to school, pursued his degree, later his MBA and ultimately his doctorate in education (ED.D). That’s right. He is now Dr. Shaquille O’neal. We’ve heard numerous stories of entrepreneurs and employees in well-paying jobs, who have ended up broke because they spent their wealth foolishly. Being smart is one thing; it’s what will enable you to acquire wealth. Being financially smart is another, and it’s what will enable you to keepyour wealth. From Dr. Shaquille O’neal’s story a number of basic concepts can be learnt on how to be financially smart. 1. Education is key in acquiring and protecting wealth: For Shaq, it wasn’t too late to go back to school to learn how to protect what he’d acquired. Financial advisors will often and rightfully so, advise on saving for future investments and retirement. A proper education will teach one to invest in the correct industries, learn the risks involved and how to mitigate the risks. The importance of constructing and sticking to abudgetcannot be over-looked as it helps avoid compulsive buying.It would help to remember the simple concept in managing finances is; what comes out of your account should not be more than what goes in. 2. Diversify your investments: DO NOT put all your eggs in one basket. There are investors who lost most their wealth since they invested in only one area; say real estate. What happens if that particular sector crashes? Diversifying your investment portfolio is important, since it helps reduce risk by spreading it thin across different industries. Currently, Shaq is the joint owner of forty 24-hour fitness centers, 155 ‘five guys burger restaurants, 150 car washes, a shopping center, a theater among others. 3. Secondary source of income: This is in regard to one’s in-born talents, hobbies and interests. Shaq also has a comedy segment known as “All Star Comedy Jam”. In addition to your job, you could earn extra income through secondary sources like photography, theatre arts, running a blog, painting etc. So when that fat cheque or bonus comes in, remember that it takes another form of ‘smart’ to manage it. In the words of Dr. Shaquille O’neal, “It’s not about how much money you make. The question is are you educated enough to keep it?” So let’s keep educating ourselves, people!
Posted on: Wed, 13 Aug 2014 09:00:01 +0000
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