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7 Jan 2015

AND WE ALL INVEST, SAVE AND AFFORD

One sure way to spend your money carelessly is by justifying your extravagance using fancy finance terminology. Think of how often you hear people mentioning investing or investment casually in their conversation. Because investing makes everything so much more sexy intelligent. Everyone of us is now an investor.

The "Save up to 70%" sale... and I spent.
If I got a rand every time a person mentioned their investing habits in 2014, I would have collected enough to buy me coffee every week this year. My friends have invested in a lot of strange ways, from pairs of shoes to fancy functions using their high limit credit cards. Some days I really wish I can just keep quiet and remind myself that it may not look right in my eyes but it seems to make them happy. And for some reason I just cant keep mum for long as if some part of this is my problem. One of the rare moments of me with a zipped mouth was in a group debate episode that tortured me for days on Facebook in 2014.

Before I say anything I have to mention that I have nothing against any sort of beauty styles that people choose to wear. We all have a right to our choices and priorities, right. So the lady in the debate starts by criticising the idea of expensive hair extensions, popularly known as weaves. The weave in question cost something in the region of R10,000. Some of the debate participants mentioned hair pieces costing twice that and above. A lot of those who argued against expensive weaves referred to them as a "waste of money" and those who were in favour of such hair pieces referred to them as an "investment". Just to humour you, I will share a bit of what I can remember from this heated debate:

The debate starter mentions how some people take three months to pay for a weave. Because I am so weave illiterate or ignorant if you prefer, I was just a spectator. Deep within I was screaming about how expensive these kinds of fake hair are; as if I am paying for them or the wearers owe me something. On a serious note, I need to stop acting as if everyone's financial decision warrants a word of wisdom from me. Everyone has their lives to live and deserves to live it in their own terms. As the conversation goes, everyone pro expensive weave continued using the terms "investment" and "affording". A lot of people in this group were confidently pointing out how they are investing in themselves and how they can afford these kinds of luxuries. I have my doubts, but there is a possibility that they are right on affording.

We all know how we tend to throw an "investment" terminology anywhere to feel awesome. Forgetting that an investment should always yield returns that can be re-invested.
noun: investment; plural noun: investments
- the action or process of investing money for profit
As a matter of fact, there are very few people who get returns from wearing any kind of a weave. Models, weave advertisers or even footballer's wives, maybe. But the rest of us are just spending and definitely not investing. Spending on what is important to us is not always a bad idea. But it is not accurate to refer to it as investing. Similarly, we tend to carelessly use of the term "saving".
In my recent visit to Menlyn Mall, I noticed the word "SALE" displayed in red in all store windows. The same stores marked their sale items, "from price X to price Y, SAVE 70%". Saving is great, except in this case one has just spent, and in most cases on something they don't have a use for. They spent 30% that they could have saved in the true sense of the word. I know I am being too serious about this, but using appropriate terminology does help put things into perspective for an individual. An appropriate choice of words would be "spend", "indulge", "luxury", "pamper", "spoil", etc, in these cases.

As a debate reached what felt like a climax, someone else confidently wrote "if we can afford it, why not". I must say, my over-analysing tendencies can go beyond frustrating.  At this point of the debate I was trying to define the word "affordability" to myself and found it too complex. The dictionary came to my rescue: 

afford
verb
- have enough money to pay for...
- be rich enough for...
Having money at ones disposal cannot only mean they can afford stuff. It simply means they can buy it. Affording should be after one has taken care of ALL their current and future financial needs. There are people who can afford a lot of stuff including that expensive weave. I don't know any among the middle class group. I also buy a lot of stuff I can do without or that I cannot really afford to buy. That may result in me encountering a shortage somewhere in the future. Or I am stealing from my kids and their kids. Whilst it is just expenditure in most cases, it does qualify to be referred to as an investment in instances whereby it is a piece of art or furniture piece that appreciates in value.

The point of this post is that, when we want to invest in ourselves we should get empowerment on something that develops us as individuals and not go out shopping for material things. When we invest in ourselves we should be able to list the returns from that investment. Like knowledge from a book, bonding time with family from a holiday, etc.

And when we are about to spend recklessly, we should always ask ourselves WHY? Is this adding value to my life or done to impress the next person? Sometimes it is a purchase just to pamper oneself. And that too is OK.

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