There are two types of people in this world; those who prefer instant pleasure and those who prefer delayed gratification.
The ones who prefer Instant pleasure leave for the moment, you will probably find the YOLO battalion here. Once they make up their mind about doing something now, nothing will come between them and that decision. For those who prefer delayed gratification, they sacrifice something today so as to concentrate on another thing that will lead to something greater tomorrow. And that’s what informed today’s discussion on #ChaseDebate.
Why do some people prefer to live for the moment rather than save for the future?
Living for the moment tends to bring a sense of happiness, happiness that comes with not worrying about what tomorrow holds. Just like Walt Whitman stated, “Happiness, not in another place but this place. Not for another hour, but this hour.”
Others are afraid, afraid of what tomorrow will bring, afraid of taking chances this can be caused by a past experience from the individual or someone close.
To meet microeconomic needs such as the basic needs (food, clothing and shelter-rent).
To maintain a social class that is mostly important to them now than later as a result of peer pressure or trying to keep up with the Joneses.
Lack of insight into the possibilities of delayed gratification.
Most people don’t know what to invest in or lack of information of the best ways to make investments.
What about entrepreneurs? Why do some prefer to spend their returns instantly rather than reinvest it for growth?
Fluctuations in economy in terms of prices, markets, regulations/policies.
The time value of money- a shilling today is not a shilling tomorrow.
Experiences and environments that surround the entrepreneurs. If an entrepreneur has not received returns from reinvesting, it is possible they will not reinvest but rather spend the returns.
Poor planning, lack of a clear goal and poor formulation of strategies on how to sustain their business or the way forward.
They depend on the returns of the business for their day to day upkeep. The returns are their income.
The risk appetite for the entrepreneur and lack of information on ways in which they can invest in to ensure that their returns earn interest or profits.
The future of the business looks bleak and growth impossible. Probably because the core product is in its final stages of the product life cycle.
We are not saying that instant pleasure is bad. Hey, you should #LiveALittle every now and then. Sacrificing some things now for the future however, can help you reap dividends. Instead of being quick to spend that last cent, think about saving it.
How can you develop a saving culture? Here are a few pointers.
Set Saving Goals.
We all have desires of what we want to achieve, whether it’s going for a holiday, buying a car, building a home, starting a business, going back to school. The list of our goals can be endless. As you save, it’s important to know what you’re saving towards because then it motivates you and helps you know how much you need to save and how long it will take for you to reach your goal.
Make Plans.
Plans enable you to focus your thoughts and ideas into a series of steps to achieve your goals. It’s through plans that you’re able to bring your dreams into a reality, to be able see what you need to be where you want to be. Through plans, you’re able to see the bigger picture, so that it make sense why you will sacrifice short term pleasures for long term goals.
Be Informed.
Be informed all the time on upcoming opportunities and threats in the future so that you can maximise on the opportunities and mitigate the risks or avoid the threats. These opportunities create avenues to invest in. Sometimes the investments might not bear fruits immediately, but don’t give up.
Evaluate your financial needs.
It’s important to know what your financial needs are and what you require in order to live comfortably. From your recurring expenses, your daily expenditure, your savings and your investments. This will enable you to be able to live within your means and not to be hard pressed.
Be consistent.
Consistency is a great factor when it comes to managing your money, because that’s how you build a habit, a good habit. It’s important that when you make a commitment to save/invest, you live up to it, because it eventually enables you achieve your goals. One sure way to be consistent is to place a standing order to your savings account.
If you are looking to save for the short term or the long term, here are some options for you;
With the Origin Savings Plan, you’ll be able to put some money aside regularly and see it grow, as you gain interest (12.1% p.a), and have access to loans (up to 90% of your savings). You have the option to pick from a one, two or three year tenure savings plan.
With a minimum balance of KES 2,000, you’re able to earn interests on your savings. The interest is calculated based on daily end of day balance and credited upon maturity of the tenure picked. The savings plan also provides a great platform in which to track your savings milestones.
Fixed deposit
It enhances a savings habit as the money you deposit needs to be in the account for a period of time without you making any withdraw. Fixed deposit account earns you a higher interest rate than depositing your money in a savings account.
With this account you are assured of returns for your investment. The account helps to act as a fall back for your business in the event of a cash flow squeeze or can be used to meet your future cash requirements.
Interest is payable upon maturity; annually or monthly depending on the term you chose or you could use the money to buy assets if you want. You get to choose how long you want to invest your money in a fixed deposit account ranging from 30 days to ten years.
Unit Trusts
A Unit Trust is a professionally managed investment scheme which pools together funds for investors with similar investment objectives. The fund is then put in a diversified portfolio comprising of different asset classes: stocks, bonds, treasury bills, commercial papers, deposits. For instance, Gencap Hela Fund by Genghis Capital.
Gencap Hela Fund is a low risk fund which invests in diversified near cash, interest bearing instruments in the Kenyan market with varying maturity profiles. The Fund serves as a safe parking for cash and provides flexibility equivalent to a call deposit.
Chase Debate: Instant Pleasure Vs Delayed Gratification.
