We are still living in the era of COVID 19. The natural elements of the universe- rainfall and sunshine- the heat of the day and the cold of the night must not have a direct reflection on us while we the time upon our compound, as we gather at funerals, festivals and birthday parties. Not to mention weddings. We would be quite safe when we sit gently under canopies.
The case is the same as we navigate the world of economics, finance and business. For your individual business to grow, survive or thrive in the pouring rain or under the sun’s scorching heat an extra investment beyond the ordinary like bank or microfinance savings, insurance, income bearing funds or security would do.
Do we remember treasury bills? The default risk is almost zero because being backed by the government as a legal instrument you would always be paid back the interest you deserve on your funds invested into it.
Canopies might come in varied brands and forms. It could come circular, oval, rectangular or as a square in nature. It is expected to give you some cushioning, comfort or luxury. It is said that a portfolio of diverse components or nature would ensure a sure form of financial returns being accrued into your account at the end of the financial deal.
Portfolio concentration which is the art of sitting under one particularly branded canopy for far too long would be so disastrous. You might suffer a financial loss of some sort placing all your eggs in one basket at a point in time. When the basket drops upon the floor all the eggs would crash with it.
Diversification here is direly necessary. It could be in the form of making the rational decision to sit on a plastic chair or upon a wooden bench underneath the sun’s bright shining rays. The rays would even give your business and yourself all the vitamin Ds you need. It could also be the choice to sleep on a cushion mattress under a very big tree. Avoidance of the two could also be what you might choose to practice. That is to stay indoors an hundred percent of the time.
To invest or to do otherwise portrays a living trait- a lifestyle and a culture. Accountants are said to fear taking risks. They are risk averse. They would not like to dare to take risks. But gamblers always gamble. No. More aptly they follow their judgement, intuition and discretion. That gut feeling there. They take their instincts into consideration. At the word, Go, they get on the move whenever convinced to the core, or they are fully led or directed from within. They lose less and win more. For gamblers a temporary financial loss is part of the overall plan to becoming wealthy in the full picture.
There is a key difference between being an accounting expert and that of being an experienced money speculator. Let us call the latter experienced money gamblers.
Accounting involves adhering to many a revised legal framework, guidelines and principles. Like FRS. Financial Reporting Standards. And it includes concepts like historic cost, going concern, First In First Out, Last In First Out.
Finance however encompasses the use of formulas, deducing information from a budget, making the right meaning from financials, speculation and making analysis, and many more.
In every human situation rules, conventions, protocols and guidelines matter. They are not sufficient however. Because it takes extra insight, an in depth understanding and clear enlightenment to make the right choices and decisions in life. Laid down principles, rules and conventions are helpful but they have their own limitations which might be called Garbage In Garbage Out by a computer programmer.
Life itself affords us with diverse circumstances, cases and situations. For instance, a bond from China secured by the United States or by the United Kingdom would definitely have a difference in interest rate upon maturity.
The same bond amount obtained from China by an African country would have a high interest rate upon maturity. Diverse reasons call for this situation.
Accounting conventions cannot give you the right predictions here. It would take economics- the study of the appropriate apportionment of scarce resources- to gamble and guess rightly over this issue. It would take bargaining here and proper bargaining would give you a much more lower interest rate upon pay back time.
There is certainly a time when it is meet to stay indoors for weeks. COVID 19 brought this message to bear. But not without zero cost. There is also a time to take the firm decision to walk in the rain. Without anything to serve as a cover upon your head. A clear example of this situation is when by your personal rational choice you might want to make personal savings to purchase a new pair of shoes.
First of all, a real distinction should be deduced to separate your wants and needs. Between when you deem it good to enjoy additional comfort and luxury. And more importantly when to decide to operate within the compass of the law. And without affecting societal conscience.
Given a particular confronting situation, who the would want to take the lead? Take bold steps and make very good decisions? Leaders become so by birth or inclination. If we do not have very excellent leadership traits or the sterling inborn character of a typical leader, training would do.
Let us train ourselves if need be to cope and adjust ourselves to living well during this COVID 19 epic.
Maybe canopies are not what we rightly need now. Well, whatever the case might be let us take the bull by the horns. Let us face the heat and the rain for some time while we save for our future and for that our children.
By Ebenezer K N Baiden-Amissah
P O Box LG 1254, Legon Accra Ghana