Small Wins

Are you fully up to date on your professional reading? Our members do not have time to read dozens of accounting, tax and business publications for few items that affect them. So we do it for them. We go through the business and professional media, find the items bookkeepers need to know and give them to members in our monthly newsletter, The General Ledger. Here’s a professional reading we gave members from The CPA Journal, the prestigious publication of the New York State Society of CPAs .

Password protection for sensitive personal and other data is only as good as the password itself. Easily accessed “cracker,” “breaker,” or “recovery” software runs millions of passwords per second through a log-on box. A password of even 6 characters combining numbers, symbols and upper- and lower-case letters can be broken in 5 hours; only numbers, symbols or letters, in minutes.

Your password should: · contain a minimum of 8 characters; · not use any word found in a dictionary (dictionaries in any language can be downloaded to be used in cracking software); · combine numbers, symbols and upper- and lower-case letters; · not include personal information—it’s too easy to obtain a user’s name, address, birthday, and names of relatives. · lock users out of the system after a few tries at the correct password fail (prevents hacking software from trying 1,000s of passwords per second). Lastly, compartmentalize electronic files and allow access only to those authorized to use each file.

Cutting back is the theme of the hour. We save water, heating costs and power. It’s no longer so easy to indulge yourself. Or is it?

 

I still believe that this is the best time to do some good savings! When costs are high for most products and services and disposable incomes are at their lowest. An interesting trend has occurred over the past few weeks with banks reducing their rates from between 21% and 19% to between 19% and 18%.

 

However, the lending rates are still at their highest with some banks maintaining between

28% - 25% therefore confirmation my previous pronouncement that Ugandan lending rates are still the highest considering the regions averages.

 

It is not all gloomy, even with this gloomy picture painted by economists, scholars and the press we can still make the best out of it. The reality is that this situation will get worse before it gets better but it will get better. Authorities in personal finance have proposed that “it’s more fun spending savings than saving spending”.

 

The real question is which side you would rather be caught at considering that every crisis is eventually overcome. For the speculators this might not be the best time to consider foreign exchange products as they at their highest. And for those worried prospects there is a lesson to learn some where.

 

For most of the second half of 2008 and some part of the first quarter of 2009 we experienced foreign rates at their lowest coming close to 1600UGX for 1USD but over the past few weeks we have witnessed a more than 45% increase to about UGX2, 165 per 1USD. These means for those who speculated this trend and actually invested in foreign exchange products about the period mentioned, the gains were tremendous and they laughed all the way to the bank!

 

It is upon this background that we need to consider putting aside some funds in form of savings. There are many products in the market that can give you a favourable return on your investment. Most banks have introduced bonus savings accounts which give between 8% - 12% interest on savings and the interesting thing is that the costs on managing these funds are minimal.

 

One bank for example has an investment account which offers 12% return on investment. Other products include the super savings account which gives a monthly return on investment of 3% with charges only when you withdraw. A financially prudent person is informed about the existing products and all it takes is a little bit more research by contacting your bankers and reading various literatures available at most bank outlets.

 

The best way to increase your savings is automatic transfers which can be done by instructing the bankers to create standing orders to the investment accounts. There is never a small amount to start with when it comes to savings. I remember one individual telling me that he started with UGX50, 000 the equivalent of USD40.00 for twelve months; his bank balance was bigger at the end of the period by UGX600, 000! Indeed small wins and discipline lead to big wins!

 

When you start out like this there are a lot of lessons to be learnt. First you are developing a culture that never existed at all “the culture of savings!” and two you are growing your wealth!

 

 

And finally, I can still indulge myself irrespective of the economic crisis. All I have to do is look for ways to cut down on major spending whereas maintaining a favourable and sustainable lifestyle.

 

Good morning daddy,

Good morning Bella,

 

How was your sleep?

My sleep was fine!

 

What did you dream about?

Mummy and Daddy

 

Did you talk to Jesus?

Yes, and he said he would buy you a good house and a good car!

 

We have been having this interaction since she started talking. And at 31/2 years now she knows dads dreams. Although she can’t quite comprehend them she “understands” his frustration sometimes.

Isn’t this what most of us undergo most of the time? Thinking when will I complete the unfinished structure or when will I start at all? The pressure that comes with the growing children and the peers! There is no time like now to start on the road to financial freedom through improved savings and reduced domestic spending.

Every crisis is a blessing in disguise as spending reduces a new discipline is learned with continuous spells of low incomes. Alternatives need to be sought to finance those unfinished projects without necessary increasing debt. The corporate world pronounces that better policies and lower costs can almost guarantee you a healthy and successful entity.

But isn’t also true to our personal finances? Small wins and discipline equals to big wins which is the theme of this blog! Effective management of personal finances begins with understanding debt. 

Anything that provides long-term value or the repayment matches the useful life of the asset.  It is likely that we have debt in the form of salary loans, auto loans or a mortgage. Effective management of finances requires that we know where our money is going and making deliberate decisions about how it should be spent.

When you keep track of your money you minimize the risks associated with the debt problem.  This requires that you use a budget. However, the question that occasionally pops up in peoples minds especially here in
Uganda is whether really to take up a loan. And for what purpose the loan should be for?

With the increased cost of money and the supposedly stringent application procedures many potential applicants have been discouraged away from financial products. The fact is we can’t do without these products especially for the financially literate persons.

 

Completing a home requires large sums of money which are not readily available considering that our incomes are lower compared to the region averages. So the catch here is really what is the purpose of applying for a particular financial product as opposed to other products?

 

Knowing that in most cases assets are financed by liabilities is the beginning for those starting out for their search. An additional consideration should be the long term value provided as a result. So what loan product is the best? That depends on the individual and in which bracket of the “food chain” they belong!

 

My daughter prays for a car and a good house every day and has been doing so for the last 2 years! What is my priority here? You guess is as good as mine!

 

Adapted from the secret scrolls message from Rhonda Byrne Creator of “The Secret”

In the moment that I discovered The Secret I realized that I had been living my entire life backwards. If things were good in my life, I was happy. If things were difficult in my life and everything was going wrong, I was stressed and miserable. In my ignorance, I had been misusing the law of attraction all of my life. But all of that changed when I had the knowledge of The Secret.

To live in accordance with The Secret and the most powerful law in the Universe, we must be in Joy first - and then everything will change. To live our lives by emotionally reacting to what is happening outside of us is misusing the law! As we react with negative emotion to any difficulties, we attract more negativity into our lives. We cannot defy the law of attraction, which operates on the most microscopic levels of vibration, and with absolute exactitude.

You must be in Joy first. And then your life will change into Joy.

Difficult times are the greatest opportunities in disguise. When we face difficult times we have to put in determined work to get ourselves into Joy. But let me tell you, when you can get yourself into Joy despite what is happening around you, your life must change - it’s the law!

In addition, as you become Joy in difficult times you are becoming the master of your emotions, the master of your life, and the master of the law of attraction. Difficult times are your greatest opportunity to practice yourself into Joy.

Of course if your life is going along swimmingly then it is very easy to be in Joy. During those times your Joy is most likely a reaction to the good times. But the magnificence and the power that you really have within you will be seen when you can be in Joy during difficult times. It is then that you will see the true power that you have within you, because as you hold to Joy, you will shift all the energies of the Universe, and your life and your world will change.

The cause of everything is within you, and the effect is what you experience in your life. You have the power within you to change everything by putting yourself in Joy. You can change everything so easily by becoming Joy first! And nothing can change until you get yourself in Joy, because that is the law of attraction. Like attracts like! The energy of Joy attracts energy of Joy!

Do whatever it takes to find your Joy, and then keep yourself in it no matter what. Keep ramping up your level of Joy every day. There is no limit to the levels of Joy you can reach. You will see change to the degree of Joy that you can attain and maintain. The higher the Joy you can create within you, the more spectacular the change, and the higher the Joy, the faster the change. Once you get yourself in Joy it is easy to maintain it, because your emanation of Joy attracts more Joy. The law of attraction will continually send you more feelings of Joy.

You cannot criticize or blame or complain when you are in Joy. You cannot be afraid when you are in Joy. You cannot speak negatively when you are in Joy. You cannot harm another when you are in Joy. Negativity cannot reach you when you are in Joy.

When you are in Joy you are compassionate. When you are in Joy you are considerate and caring. When you are in Joy you love others. When you are in Joy you appreciate everything. When you are in Joy you are in love with the world, and the Universe is in love with you.

Be in Joy. Seek it with all of your heart, and you will find it.

May the Joy be with you,

Rhonda Byrne
The Secret… bringing Joy to billions

 

ADAPTED FROM SUZE ORMAN’S 2009 ACTION PLAN

Suze Orman began this book with the recognition that it is absolutely understandable for you to feel fear, anger, and confusion as you struggle with the repercussions of the global financial crisis. However, she believes that the very severity of the crisis means that we will choose to make lasting changes that will put us on a path to a healthier and more vibrant future. Crises force us to take a clear-eyed view of what went wrong and compel us to make necessary adjustments to avoid the same pain and suffering again.

 

The period of reflection we are in right now has forced us to focus on a difficult reworking of our relationship with money. The era of living beyond our means is giving way to an age of living a more meaningful life based on financial honesty. As painful as this transition period is, please know that what awaits us is a very bright future.

 

Our economy is suffering from a credit crisis, not a crisis of talent or drive. From the innovation that will continue to spill out of Silicon Valley to the reinvention now being discussed to transform our energy sources, I remain convinced that this is still a nation of unwavering discovery and achievement.

 

Short term we have to survive the credit crisis and recession; long term we will prevail and we will thrive again. Your job right now is to do the right thing when it comes to your money—to make a plan, to stick to it, to become a saver not a spender, to set a goal to live a debt-free life. I ask that you never forget the painful lessons that 2008 taught us.

 

I ask you to remember these three things:

 

When it comes to money, if it sounds too good to be true, it is .

If you cannot afford it, do not buy it.

Always choose to do what’s right, not what’s easy.

 

My hope is that reading this book has given you an understanding that you are a huge part of the solution to your current problems. Despite the turmoil, despite the adversity, you have to recognize just how much is within your control. A secure financial future is in large part going to be a function of how willing you are to take action today. It won’t appear out of thin air, it won’t be legislated for you by
Washington. It will grow out of the actions you take each and every day for the rest of your life.

 

Are you ready to make change happen in your own life? If you are, I hope this book becomes your guide. Here’s to making your life, this precious time, the best it can be.

 

Suze Orman

November 19, 2008

 

 

ADAPTED FROM SUZE ORMAN’S 2009 ACTION PLAN

 

The New Reality

 

Your job is at risk. Th is has nothing to do with how talented and well-respected you are, or the fact that your past three reviews have been gold star. You are at risk for reasons that have nothing to do with you. The double whammy of the credit crisis and an economic recession increases the likelihood that businesses will be forced to cut back on costs, and that could mean reducing staff .

 

In this environment, just hoping you will be spared is not the right action. You must take active steps today to make sure your family is safe no matter what happens job wise in 2009. That means making sure you have savings to pay the bills instead of running up credit card debt or raiding your retirement accounts. It also means having health insurance no matter what and a game plan for landing your next job.

 

It’s important to understand that even if the credit crisis hadn’t occurred, 2009 was shaping up to be a tough year for the economy. Our economy is cyclical in nature—there are periods of strong growth and periods of slower growth. Slowdowns are always part of the equation. There is no avoiding them altogether; rather, the goal is that when they do hit, it is with a soft punch rather than a knockout.

 

In an economist’s perfect world, what we experience is an orderly winding down from a period of faster growth to slower growth that soon transitions into a new period of even stronger growth. But sometimes real life is less than ideal. If instead the economy slows down with a thud—known, in fact, as a hard landing—we can fi nd ourselves in a recession: a period where the economy doesn’t just shift to slower growth, it actually contracts. When that happens, job losses can be very high as companies cut positions to reduce costs.

 

The continuing problems caused by the credit crisis appear to have ruined our chances of a soft landing in 2009. Unless banks start lending again, companies that were already girding for a slowdown in business are going to be in even bigger trouble. Every business, from the 10-person small company to General Electric, relies on credit.

 

Short-term credit helps businesses pay the bills and keeps supplies fl owing while waiting for clients to pay their bills, as well as enabling firms to finance longer-term expansion projects. Long term credit is another vital way businesses borrow to grow. If you want to build a new plant or expand your business line, you nee d money to pay for your expansion before you can expect to earn any money from that new business. When businesses can’t borrow money it greatly reduces their ability to expand.

 

Without short-term or long term credit, a business is going to find it doubly tough to get through the economic slowdown. I am not saying we are guarantee d to have a deep and hard landing in 2009. But it is definitely a possibility if businesses can’t get credit. And let’s face it: 2009 is not going to be a great year for consumer spending; that’s driven much of our economic growth in past years, but you and I both know that you are focusing on spending less and saving more in 2009.

 

What I do know for sure is that in times like these, my saying “hope for the best, prepare for the worst” could not be more apt. You can’t keep the bad times from happening, but you can keep them from decimating your financial security. There are actions you nee d to take now to make sure that no matter what happens “out there” this year, your family will be protected.

 

SUZE ORMAN’S 2009 ACTION PLAN