Sunday 26th February, 2006

 

Long term savings can create cash estate

 
 
 
 
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In the business literature, there is now the construct of adjacencies. This is a strategy to fuel profitable growth, when an organisation pushes outside of its core business, into what is seen to be an adjacent space.

The Nike sneakers that I bought in 1982, were not a “brand” then, when I upgraded from Bata crepsoles, on my first trip to the Big Apple. But Nike developed adjacencies, one at a time, from 1982 running shoes, to the Tiger Woods US$100 million deal, in golf paraphernalia.

The message is: you cannot get different results, by doing things, the same way. You have to reassess, re-articulate a new plan and develop a new strategy. It works in business and it works in private life.

So here’s the adjacent space!

To determine your current position: get a budget sheet from your financial advisor, and complete the exercise carefully.

Scrutinise the figures and see where there are spaces, for conservation, cut backs, or expenditure items that can be deferred or postponed for 24 months.

Next look around the house and get rid of all the things you have not used for one to two years. Include the kitchen wares that have become ornaments. Set a price tag on every item, and get rid of them.

If it is worth your while, e-mail the list to your friends, post it up in the office and advertise a garage sale. If you think the garage sale is not part of the culture, remember you cannot get different results without pushing the boundaries.

If you can’t sell the items, give them away. At least you will clear up clutter and get some feng shui in your space. Next: make a different plan for the tax refund and every bonus for the next 24 mouths, instead of spending it on things that you cannot even recall.

One local company paid out a bonus of some $25,000 to a certain category of ordinary employees, this year.

We can hazard a guess, that most of that bonus money was consumed, and little saved, for the long term. Yet all it takes is one year or two years of conservation.

Do you know that at today’s rates of return on long term savings plans you can create a cash estate to the tune of one million dollars, for your 18-year-old son or daughter?

All you need to put out in this year is $3,000 and just leave it there. When that child is 65 years old that child will receive the inheritance you created.

What use is that to your child when he attains the old age of 65, you may ask?

It is an adjacency, it creates a million dollar estate for your grandchildren! If you cannot leave your own children a million dollar estate when you die, you can leave it to your grand children!

You see, one of the problems of the human condition is lack of vision, and a now-for-now mind set.

The estate of Queen Elizabeth II was not created in a day. And while there is poignant truth in the idea that all of our ancestors worked, blood, sweat and tears to contribute to her wealth, so evidenced in the Crown Jewels of the Tower of London, we cannot rewrite history!

But we are writing our histories now! To leave legacies and transfer mighty estates, you have to push the boundaries.

Very few get it handed on a sliver platter, and some will merely dream, but the rest of us, we will expand into adjacent spaces and leave a brilliant legacy.

©2005-2006 Trinidad Publishing Company Limited

Designed by: Randall Rajkumar-Maharaj · Updated daily by: Sheahan Farrell