Financial Tips for the African Living Abroad

How can I create wealth?

Let your money work for you; invest in assets that will increase in value as opposed to ones whose value start decreasing immediately after purchase. For instance, a house will almost always increase in value as opposed to a car- the common saying is that a car depreciates 30% from the moment it is driven out of the dealership. In essence, buy assets that produce income. If you can raise the capital to invest in rental properties, do so rather than spend huge sums on brand new, and very expensive vehicles and articles of clothing whose values will diminish only after a short while.

Review your investment portfolio periodically. If you are lacking in portfolio/asset management skills, then you can do well to visit a Financial Planner or Financial Advisor in any of the major banks where you can get their services for free.

On that note, your financial IQ should not remain at sub zero levels if you want to create and grow wealth in this economy. Learning basic financial planning and investment terminologies such as Financial health check, Net worth, budgeting, debt load, assets and liabilities etc. is your first step towards success.

What are good and bad debts?

Always put your income or earning capacity into consideration before you acquire any form of asset . Otherwise, all your great plans for financial independence will soon go south. Generally speaking, it is quite easy to classify debts into good and bad categories. For instance, on a $50,000 income, a mortgage of $150,000 is good debt while a car loan of $40,000 is bad debt. A very bad debt is one from credit cards! Avoid racking up large balances on your credit cards. In case you do not know, some credit card interest rates can be as high as 21% depending on how you use them.

Be smart about money! Do not fall into the trap of quick, easy gains. Study the financial terrain, seek advice from experts, read as many professional journals and investment magazines you can lay your hands on and watch the right content on TV.


If you have unwittingly accumulated an unhealthy balance on your credit card and you have a line of credit (PLC), you could pay off the balance on the credit card with funds from your PLC; usually, the interest rates of the PLCs sit much lower than that of the credit card.

Where you have balances on a loan, PLC and credit card, you may want to visit a bank for a loan consolidation. That way, you can reduce your payment to one and for the most part, improve cash flow.

Draw up a budget

  • Identify sources of funds (income)
  • Note the usage of funds (expenses)

Know your debt load

Debt payments versus gross family income: You must start making serious adjustments once you find the weight tipping in favour of your debt.

Adapted from "Testing Your Financial IQ" by Kay Oladele.


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