Continual Improvement - Kaizen
In
Japanese the word Kaizen means "change for the better" or "improvement".
The English equivalent is "continuous never ending improvement", or "perpetual
improvement". This philosophy is an approach to increase productivity.
Check out the chirp:
“Our real problem is not our strength today. It is rather the vital necessity of action today to ensure our strength tomorrow. “Calvin Coolidge”
The chirp says that our future depends on what we do now – if you learn about money and finances now you will end up with the problem of too much money later in your life rather than too little. What if this is true?
Myths
- Money management is difficult
Not so, really it is quite simple. Some people like to make it seem difficult as their jobs or businesses depend on it. If money management is made out to be really difficult to do then people will need the help of so called experts to manage their money. Obviously these “experts” charge for their services. If you now get good at finances yourself then these experts can be out of work. Basically the dumber you are about finances the more money the experts and the banks will make by managing your money for you. Money management is certainly not difficult.
The table below shows a typical list of income and expenses.
Work through the list. These are typically expenses that your parents must pay every month.
Financial Challenges in South Africa
People of today face challenges in financial planning for their future. Not understanding the way these finance systems work can lead to disaster. It’s like putting a person who has never driven a car before behind the wheel and expecting them to drive – there will certainly be collisions with other cars or objects. The correct way is to get learner’s license, then drive with a qualified driver who can guide you before you do the real test. Now in personal finances there is no learner’s license. The qualified driver of finance is or was most likely one of your parents. Did they get a financial drivers license? Perhaps they did or perhaps not. Make up your own mind as you read through the next
1. Reduced savings:
Saving and “planning for the future” type investments are running at a very low rate in South Africa. This is shown by the big drop in the overall savings rate of our country. Over the last twenty years South Africa’s saving rate dropped from 24% to 16%. (This study was according to an Oxford research study by Janine Aron, and John Muellbauer in 2004 called Revised Estimates of the Personal Sector Wealth.)
2. Increased lending and repayments:
Since the 1980’s there has been an increase in household debt, in other words the.........
R4207.46 after 10 years
R15120.6 after 20 years
R43426.42 after 30 years
R116844.43 after 40 years
R307271.85 after 50 years
R801191.53 after 60 years
R2082291.9after 70 years
Section 4 The Triangle and the Two Gates
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Important note: When a job is advertised the advert normally advertises the gross salary. Don’t get excited thinking that the amount advertised is what you get in your pocket at the end of the month – all these deductions are taken off first. Salaries are often advertised as Cost to Company or Cost of Employment – this is the gross salary you are paid plus any contributions the company makes for your medical aid, pension fund, or other allowances such as travel, or car allowance.
How does time affect money?
If you put R10 000 in the American stock market 50 years ago, it could be worth between 2 and 50 million Rand today.
What if you pay for an item on loan every two weeks instead of every month?
Your saving is R 22,385.25.
Do you get the picture of how debt can eat up your money.
Assets can be divided into two groups, assets that appreciate, or generate income and assets that depreciate, or consume income. Many people do not care to know the difference between the two types of asset and can end up in financial trouble as a result.
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Wealth Contributors |
Wealth Consumers |
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Ways to Increase Income |
Ways to Reduce Expenses |
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Example: Comparing a wealth consumer and a wealth contributor
You have bought a house and there is R80 000 available in the access facility. You have two choices: Firstly you can buy a car and a boat for R60 000. Secondly the house down the road is for sale for R500 000 – the
property market is good and you can pay a deposit on the house.......................
Moving out of home – Can you afford it?
Investing
Definitions:
- Investing is “to put money into business, the stock market etc. with the intention of making more money”.
- Education is also an investment – money, time and effort go into learning new information and skills.
Applying the principle of the triangle and the two gates covered earlier in this course is investing in yourself and your future.
Setting goals is a very important part of your life. It can make the difference between an ordinary life where you are just one of the masses or you can have the FUN exciting life that is possible for every one of us. This goal-setting part is not just history lesson, or a finances lesson etc. Well actually, it may be a history lesson for others one day. How so? If you select world-changing goals you may well run right on and achieve them and your great grandchildren may see your autobiography in the bookshops one day. Enthusiasm and passion cause tend to have that effect.
Check out the chirp:
“The unanalyzed life is a wasted life” Plato
S: There are expensive ways of doing something and cheap ways of doing the exact same thing.
Q: How can I do or buy something the cheaper way, or even get it free, legally?
Three Financial Plans
Most people don’t plan for a secure future. They just
plod along day after day not planning ahead. Or they are “too busy to plan their
finances” they let someone else do it. That someone else often does not care
about your financial future as they should and may be more interested in a
commission they get by selling you some financial product. Now since people
don’t spend much effort doing financial planning you as an employee are forced
to contribute to a pension fund – generally people just don’t plan into the
future. Now let us put together three plans.
- First just a simple one to keep some money in your wallet – the average goals-average plan.
- Second .................
- Third ................
END OF SNIPPETS