About being conservative……………….

I have always come across the word ‘conservative’, but I never really gave it much importance or realized how relative it is to us as humans, until I started working in the Finance Sector. Loan Officer training goes; when working on the data towards calculating the income of a Client, it is best to consider minimal sales as against a little bloated expense. By so doing, a realistic re-payment capacity is gotten for the client.

This is being conservative.

Whatever that means to those who do not understand, it literarily means that it is better to assume that a Client spends more on paper than he naturally does, against an intentionally downturned declared sales for a more realistic re-payment capacity at the end of the day. In a nutshell, the idea is to loan an amount that Clients are able to pay back very comfortably.

Being conservative in other terms is also not embracing changes, especially one that is sudden. Sudden changes could make or mar one’s finances, so staying skeptical is also good though. Whoever stays guided at the onset of wealth after they must have created it for instance and not lavish is being conservative. Which also means not frivolous, neither likes fashionable and modern clothes nor lifestyles.

The law of conservativeness also says that employees are to live within their net monthly income, reducing borrowing to the barest minimum. It is scarier to be in debt than to be in lack of something. Business owners would only remain afloat of their successes when they mind how they spend into their profit. Be conservative.

Taking a cue from the man that has refused to relinquish for too long the position of the richest man in Africa, Aliko Dangote. In his recent interview with Mo Ibrahim, he narrated the major mistakes of upcoming entrepreneurs, from wanting to live larger than life at the peak of their success in business, to making unwise business decisions. He claims not to have carved any lifestyle for him that he cannot maintain in the event of a major downturn, which he though prepares for, has never really happened. He reiterated that up until this day and despite his affluence, he does not have a single vacation home outside Nigeria, yet he is aware of a couple of his staffs on the Dangote Conglomerate’s pay-roll that does. If there’s anything I admired in Aliko, it is his subsequent conservativeness and modesty. His mien depicts that of a man that is not easily carried away by his wealth, yet he kept improving on his brand despite widespread criticisms. From being a Manufacturer of Cement, to Sugar, Pasta and now Oil and Agriculture.

So be like Aliko Dangote.

Being conservative stems from when your standard of living properly aligns with the income you generate.

A funny twist to that is; why should an unemployed youth own the latest Iphone or any other luxurious gadget that has a cheaper and more economical alternative? Even if it was a gift, financial wisdom screams;

“Sell it off and either start a business, or make any other reasonable good use of it”

Finally, a wise step towards being conservative is to;

Sit; consider how much you have been spending monthly/daily/weekly, this is dependent on the frequency of your wage which must be relative to your monthly/daily/weekly rent, fees, fuelling, feeding, clothing, utility and other bills. A summation of all should not be equal to your total inflow, let alone exceeding it. This is because at the end of the day, you should always have something to save no matter how little.

It is best to be conservative.

Picture source: Getty image